Question 1

The inventors of a disruptive technology always benefit the most from the technology; and it is rare that fast followers catch up quickly.

Accepted Answer

Many inventors of disruptive technologies do not always capitalize on their inventions to the fullest extent, and fast followers often catch up quickly or even surpass the original inventors by improving upon the technology, executing better business strategies, or leveraging existing market positions.

Question 2

The more people that use Microsoft Office software and related products, the lower its value.

Accepted Answer

The value of Microsoft Office software and related products is determined by various factors such as demand, innovation, and competition. While an increase in usage may lead to a saturation of the market, it can also indicate a growing demand for the product, which in turn can increase its value.

Question 3

The law of diminishing returns does not apply to traditional products.

Accepted Answer

The law of diminishing returns applies to all types of products, including traditional products. As more resources are added, the marginal increase in output will eventually decrease, creating diminishing returns.

Question 4

When the output of some units can be used as inputs to other units, synergies develop, which can lower cost and generate profits.

Accepted Answer

This statement is true. When the output of one unit can be utilized as an input to another unit, it leads to interdependence and allows for the development of synergies, which can result in cost-savings and improved profitability.

Question 5

You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. What competitive strategies would you advise Smalltown Computer to take? Which ones will it have difficulty exercising?

Accepted Answer

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Question 6

You are consulting with the owner of Better Bodies, a national chain of gyms. How could the use of information systems help them exert each of the four generic strategies in achieving competitive advantage?

Accepted Answer

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Question 7

Why are disruptive technologies "tricky"? Provide examples.

Accepted Answer

The answer of Why are disruptive technologies "tricky"? Provide examples....

Question 8

In the value chain model, primary activities are those that are most directly related to the production and distribution of the firm's products and services.

Accepted Answer

Primary activities in the value chain model include inbound logistics, operations, outbound logistics, marketing and sales, and service. These activities are directly related to the production and distribution of a firm's products and services, and are considered essential to the firm's value creation process.

Question 9

The effect of the Internet has been to increase a company's bargaining power vis-à-vis its customers.

Accepted Answer

The internet has actually increased the bargaining power of customers, as they now have access to more information and options. Companies must compete more fiercely to attract and retain customers in the online marketplace.

Question 10

A value web is a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service for a market.

Accepted Answer

This is a definition of a value web, which emphasizes the use of technology to enable collaboration and integration among independent firms in a value chain.

Question 11

Why has the Internet made competitive rivalry more intense?

Accepted Answer

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Question 12

The activities that measure the performance of your business processes against strict standards are called best practices.

Accepted Answer

Best practices refer to the recommended methods or techniques that have been accepted as superior to any alternatives because they produce results that are superior to those achieved by other means. Activities that measure the performance of your business processes against strict standards are typically referred to as benchmarks or benchmarking.

Question 13

Low-cost leadership is one of the four basic competitive strategies.

Accepted Answer

Low-cost leadership is indeed one of the four basic competitive strategies, as identified by Michael Porter in his book "Competitive Strategy: Techniques for Analyzing Industries and Competitors". The other three strategies are differentiation, focused low-cost, and focused differentiation.

Question 14

Research has shown that the more successfully a firm can align its IT with its business goals, the more profitable it will be. What practical steps should a firm use in aligning IT with its goals?

Accepted Answer

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Question 15

Select a popular product or company that you are familiar with, such as Apple's iPad. Apply Porter's competitive forces model to that product and/or company. Which of the four generic strategies is the company using?

Accepted Answer

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Question 16

Strong linkages to customers and suppliers increase switching costs.

Accepted Answer

When a company has strong linkages with its customers and suppliers, it becomes more difficult for them to switch to another company as the relationship between them is stronger and the costs associated with a switch are higher. This can be in the form of investments made in the relationship, dependence on each other's products/services, or simply a higher level of trust and dependency. Therefore, strong linkages increase switching costs.

Question 17

Value chain analysis is useful at the business level to highlight specific activities in a business where information systems are most likely to have a strategic impact. Discuss this model, identify the activities, and describe how the model can be applied to the concept of information technology.

Accepted Answer

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Question 18

How is Internet technology useful from a network economics perspective? Give examples.

Accepted Answer

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Question 19

The Internet has made it more difficult for companies to sustain operational advantages.

Accepted Answer

The Internet has increased competition by making it easier for new companies to enter the market and for existing companies to reach a wider audience. It has also made information more accessible and transparent, allowing consumers to easily compare prices and products, making it difficult for companies to sustain operational advantages.

Question 20

The value chain model classifies all company activities as either primary or support.

Accepted Answer

The value chain model categorizes a company's activities into primary and support activities. Primary activities include those that are involved in the creation and delivery of the product or service, such as inbound logistics, operations, marketing and sales, outbound logistics, and service. Support activities are those that facilitate primary activities, such as procurement, technology development, human resource management, and infrastructure.

Quiz 3: Achieving Competitive Advantage With Information Systems