Chapters 1-9 Gallaugher

Which area of corporate law is connected to technology? a.Privacy b.Patents c.Piracy d.Intellectual Property e.All of the above

All of the above

_____ represents an integrated solution that combines hardware, software, data, procedures, and the people who interact with and are impacted by the system. a.A neural network b.Artificial intelligence c.An information system d.Supercomputing e.Cloud computing

An information system

Tech firms are among the best performing firms in the world. According to the chapter, which firm is the most valuable firm in the United States, and has also posted some of the most profitable quarters of any business in any industry. a.Amazon b.Apple c.Google d.IBM

Apple

The acronym API stands for: a.Access Programming Interface b.Application Processing Inquiry c.Access Processing Interface d.Application Programming Inquiry e.Application Programming Interface

Application Programming Interface

Technology that that super-imposes content, such as images and animation on top of real world images is called: a.Alternative imaging b.Strategic design c.Illustration editing d.Augmented reality e.Product placement

Augmented Reality

Zara store staff gain as much as three hours in prime selling time to assist customers at stores. Which of Zara's practices is instrumental in these time savings? a.Concepts going from ideas to appearances in stores in fifteen days on an average. b.Three hundred member-strong design teams churning out up to thirty thousand items a year. c.Distribution centers ironing clothes in advance and packing them on hangers, with security and price tags affixed. d.Collecting data from customers on what kind of clothes to stock in stores, using PDAs. e.Tweaking shipping models through Air France-KLM Cargo to coordinate outbound shipments with return legs loaded with raw materials.

Distribution centers ironing clothes in advance and packing them on hangers, with security and price tags affixed.

A firm's financial performance that consistently outperforms its industry's peers is known as operational effectiveness. True False

False

A salesperson's ability to effectively bargain with his/her consumers is called viral marketing. True False

False

According to Michael Porter, the reason many firms suffer margin-eroding competition is because they have defined themselves according to strategic positioning rather than operational effectiveness. True False

False

Businesses benefit from economies of scale when the cost of an investment can be used in serving a niche customer base. True False

False

David Karp, founder of the website Tumblr, sold the website to Google for $1.1 Billion True False

False

Firms are increasingly shifting spending from the Web to other media such as print, radio, and television as these are often easier to track and analyze. True False

False

Founders should be wary of crowdfunding sites like Kickstarter, because these efforts require founders to give up large ownership stakes to a large number of contributors before they can raise funds to bring products to market. True False

False

If a firm's goods are highly differentiated, the Internet typically lessens the firm's bargaining power as a supplier. True False

False

Limited production runs ensure customers do not have to visit Zara's stores as often as they visit other stores, allowing the firm to save money through staff reductions when compared to peers. True False

False

Metcalfe's Law is used to explain the concept of switching costs. True False

False

Network externalities exist when a product or service becomes less expensive as more people use it. True False

False

RFID tags allow Zara staff to take in-store inventory less frequently than rivals, saving money on staffing. True False

False

SEO and SEM are key tech industry acronyms that have become vital parts of the accounting professional's operating toolkit. True False

False

Social media and mobile phone use are decreasing expectations for corporate ethics and customer service. True False

False

Technology experts in the area of user-interface design specialize in technology for competitive advantage. True False

False

The United States holds the number one ranking in home broadband access. True False

False

The number of U.S. patent applications waiting approval has significantly declined in the past decade. True False

False

The strengthening of the euro relative to the dollar has insulated Zara against financial vulnerabilities. True False

False

While process redesign, supply chain management, and factory automation are all tech-centric operations, service operations are not. True False

False

Zara's IT expenditure, measured by IT workers as a percentage of total employees, is only slightly higher than the industry average. True False

False

Zara's dominance in the fashion industry is due to its horizontally integrated structure accompanied by a globally dispersed production model. True False

False

Zara's vertically integrated model is easier for rivals to copy compared to Dell's, as computing is more complex than clothing in terms of number of new models offered. True False

False

Netflix can send out any DVD it buys because of a Supreme Court ruling known as the _____. a.clickwrap agreement b.Betamax ruling c.fair use law d.First Sale Doctrine e.Copyright Directive

First Sale Doctrine

Firms like Blockbuster, Sotheby's, and Barnes & Noble were put at risk by operating under the following platitude: a.There is no "I" in team. b.Follow, don't lead. c.What's done is done. d.Better late than never. e.Work smarter, not harder.

Follow, don't lead

Which of the following is a source of bargaining power of buyers? a.Greater choice of products b.High switching costs c.Loyalty programs d.Network effects e.Unique and highly differentiated products

Greater choice of products

Amazon was started by: a.Jeff Bezos. b.Catherine Cook. c.Shawn Fanning. d.Linus Torvalds. e.Kevin Rose.

Jeff Bezos

Yahoo! was started by _____ and _____. a.Sergey Brin; Larry Page b.Jerry Yang; David Filo c.Steve Chen; Chad Hurley d.Kevin Rose; Mark Zuckerberg e.Catherine Cook; Shawn Fanning

Jerry Yang and David Filo

Zara holds a competitive advantage over its rivals in spite of: a.refusing to implement technology in its operational model. b.conducting business only through online storefronts. c.its globally distributed contract manufacturing model. d.operating through fewer stores across the world than its closest rivals. e.Keeping large portions of its production processes in-house.

Keeping large portions of its production processes in-house

_____ Law is said to be at play when the value of a product or service increases as its number of users expands. a.Amdahl's b.Turing's c.Zuckerberg's d.Metcalfe's e.Moore's

Metcalfe's

_____ are critical for capturing sales data, and are usually linked to systems which manager a firm's inventory. a.Point-of-sale systems b.Legacy systems c.CRM systems d.Server farms e.Data aggregators

Point-of-sale systems

How does the Internet typically impact price transparency and information asymmetry? a.Both price transparency and information asymmetry increase b.Both price transparency and information asymmetry decrease c.Price transparency increases while information asymmetry decreases d.Price transparency decreases while information asymmetry increases.

Price transparency increases while information asymmetry decreases

Consumers buying commodities are highly _____ since they have so many similar choices. a.quality-conscious b.price-focused c.brand-driven d.technologically discriminating e.loyal

Price-focused

Crowdsourcing tools and question-and-answer sites like _____ allow firms to reach out for expertise beyond their organizations. a.Quora b.Oculus VR c.Alibaba d.Twitter e.M-PESA

Quora

The _____ is a piece of U.S. legislation that raises executive and board responsibility and ties criminal penalties to certain accounting and financial violations. a.Civil Rights Act b.Fair Labor Standards Act c.Sherman Antitrust Act d.Norris-LaGuardia Act e.Sarbanes-Oxley Act

Sarbanes-Oxley Act

Select the accurate statement(s). 1) The world's most valuable retailer, China's Alibaba, also carries the world's largest product inventory. 2) Uber, the world's largest taxi service, owns no vehicles for hire. 3) Airbnb, the world's largest accommodation provider, owns several major hotel corporations 4) Facebook does not create media content. a.All are accurate b.Statements 2 and 4 are accurate c.Statement 4 is accurate d.Statement 1 is accurate

Statements 2 and 4 are accurate

_____ exist when consumers incur an expense to move from one product or service to another. a.Network effects b.Switching costs c.Economies of scale d.Competitive advantages e.Profit margins

Switching Costs

If a new entrant hopes to attract customers from an established incumbent, the new entrant must ensure that the value they offer exceeds the incumbents' value in addition to any perceived _____. a.switching costs b.market depreciation c.brand benefits d.advertising expenses e.scale advantages

Switching costs

Which of the following statements about technology is true? a.Technology alone is enough to provide sustainable competitive advantage to a firm. b.Technology plays a marginal role in creating strategic differences. c.Technological improvements are not important in strengthening a firm's strategic advantages. d.Technological improvements can often be copied by rivals, leading to a profit-eroding arms race. e.Technology cannot be used by late entrants to gain a share of the industry.

Technological improvements can often be copied by rivals, leading to a profit-eroding arms race.

High-end fashion house Prada's experiment of implementing the latest technology in its flagship store failed because: a.Prada targeted technology investment only at points in its value chain where it would have the most significant impact. b.The execution of the technological advancements was poor and didn't work well during customer interactions, so managers and staff stopped using it. c.The effort was unlike Prada's signature style, being more functional than fashionable. d.Prada skimped on spending with its IT expenditure being lesser than one-fourth the fashion industry average. e.The RFID technology used on items in the store were not state of the art and suffered from legacy system problems. Feedback

The execution of the technological advancements was poor and didn't work well during customer interactions, so managers and staff stopped using it.

What was considered the source of Mickey Drexler's inventory problems at Gap? a.He personally approved sweatshop-affiliated contract manufacturers b.He wrote the code for Gap's disastrously broken inventory system c.The firm guessed wrong about fashion, placing big bets on trends that consumers didn't want d.He led a botched merger with Disney in the hopes that combining technology with the Disney Store would create a super-efficient set of shopping mall destination stores.

The firm guessed wrong about fashion, placing big bets on trends that consumers didn't want

A firm can benefit from high switching costs, even when rivals offer free products. True False

True

An information system consists of hardware, software, data, procedures, and the people who interact with and are impacted by the system. True False

True

As a testament to tech's global reach, China is home to several publicly traded Internet firms, as well as a firm that was considered the largest IPO of all time. True False

True

If there is the availability of a wide variety of undifferentiated commodity goods in a given market, and these products are available online, then bargaining power typically shifts to the buyer. True False

True

Making seasonal apparel decisions is a challenge because it often involves making predictions on what customers will be interested in, months in advance of clothing appearing on store shelves. True False

True

Many firms choose not to implement operational components of ERP software and instead elect to create their own propriety solutions in part because they see their uniqueness in certain operations areas as key to creating difficult-to-imitate competitive advantages. True False

True

Many of the careers in marketing are highly tech-centric. True False

True

Palmer Luckey, the founder of Oculus, was able to get early funding for his product via Kickstarter, exceeding the fundraising goal set by his campaign without giving up a share of equity from this campaign. True False

True

Technology has proliferated in Kenya and Somaliland, with text messages used to replace cash, creating mobile money use that, on a population percentage basis, exceeds any nation in the West. True False

True

The U.S. Department of Justice needed to provide a special exemption to the Fair Factories Clearinghouse, and before doing so, had to be convinced that the effort wouldn't be used by buyers to collude and further squeeze prices from competitors. True False

True

The internet is largely seen as lowering the entry barrier for new entrants, but firms that enter may have little chance of success unless they have a competitive advantage over existing rivals. True False

True

The scale of technology investment required to run a business can act as a barrier to entry by discouraging new, smaller competitors. True False

True

The yearly cost to run a Netflix-comparable nationwide delivery infrastructure is about $300 million. True False

True

Timing and technology alone will not yield sustainable competitive advantage. True False

True

Today's job seekers are writing résumés with keywords in mind, aware that the first cut is likely made by a database search program, not a human being. True False

True

Uber is an example of a business model that has strengthened the bargaining power of suppliers (cab drivers) with respect to middlemen who took a cut of their services (e.g. cab companies). True False

True

When firms see distribution partners as rivals, this is known as Channel Conflict. True False

True

Zara's clothing look like high fashion, but are comparatively inexpensive. True False

True

Zara's high fashion styles are inspired by customer tastes, with technology used to gather data on preferences at given store locations. True False

True

Zara's use of technology across the value chain allows the firm to manufacture more unique items than rivals H&M and Gap. True False

True

The set of activities through which a product or service is created and delivered to customers is known as a(n) _____. a.marketing plan b.value chain c.inventory turnover d.strategic position e.pure play

Value chain

Steve Chen and Chad Hurley are credited as the founders of: a.Google. b.Zappos. c.Facebook. d.YouTube. e.Yahoo!

YouTube

Tony Hsieh served as CEO of _____, and eventually sold the firm to Amazon for $900 million. a.Zappos b.LinkExchange c.MyYearbook.com d.Napster e.Yahoo!

Zappos

How does Zara differ from its competitors in converting ideas into products? a.Zara concepts appear in stores in fifteen days on average compared to rivals who receive new styles once or twice a season. b.Zara's ideas are inspired by social media, compared to the intrinsic design processes followed by its competitors. c.Zara's design and concept teams use data from customers to predict fashion trends many months into the future and stock up inventory accordingly, as opposed to its rivals. d.Collaborations with celebrities help Zara churn out a limited, yet profitable, volume of items every year, while rivals produce a higher volume of less fashionable items. e.By focusing on a smaller number of products than rivals like Gap, Zara manages to limit exposure to wrong guesses.

Zara concepts appear in stores in fifteen days on average compared to rivals who receive new styles once or twice a season.

Technology experts in the area of process design: a.work to make sure systems are easy to use. b.leverage technology to make firms more efficient. c.specialize in technology for competitive advantage. d.focus on systems dealing with critical business data. e.provide direction on technology-related security issues.

b.leverage technology to make firms more efficient.

A(n) _____ is the symbolic embodiment of all the information connected with a product or service. a.trademark b.copyright c.patent d.brand e.advertisement

brand

Zara's clothing lines are designed: a.by star designers like Stella McCartney. b.in collaboration with celebrities and pop artists. c.by design school graduates to suit customer demand. d.by designers who win talent shows sponsored by Zara. e.mostly by foreign designers in European design hotspots of Paris and Milan.

by design school graduates to suit customer demand.

Moving first pays off when the time lead is used to create: a.the latest technology at a firm's production plant. b.operational effectiveness to harness maximum profitability. c.critical resources for competitive advantage. d.high stock value to generate funds for expansion. e.market entry to ensure sustainable competitive advantage.

critical resources for competitive advantage.

In _____, the light inside fiber is split into different signal-carrying wavelengths in a way similar to how a prism splits light into different colors. a.polarization b.time-division multiplexing c.space-division multiplexing d.frequency hopping spread spectrum e.dense wave division multiplexing

dense wave division multiplexing

According to Porter, strategy is fundamentally about being _____. a.different b.efficient c.superior d.scalable e.profitable

different

Some of the radical changes brought about by new technologies include: a.the stagnation of advertising. b.the proliferation of telecommunications into the hands of a few. c.an increase in computing costs owing to the growth of licensed software. d.a decrease in the standards of corporate ethics. e.the creation of an unprecedented set of security and espionage threats

e.the creation of an unprecedented set of security and espionage threats.

In retail in general and fashion in particular, having _____ is considered the kiss of death. a.excess inventory b.storefronts in expensive districts with costly rents c.a large labor force d.limited production runs e.dispersed production facilities

excess inventory

The _____ problem exists when rivals watch a pioneer's efforts, learn from their successes and missteps, and then enter the market quickly with a comparable or superior product at a lower cost. a.late entrant b.early starter c.first mover d.intellectual property e.fast follower

fast follower

Netscape, which once controlled more than 80 percent of the market share in Web browsers, lost its dominant position when customers migrated to Internet Explorer, Microsoft's Web browser. Internet Explorer was easy to install and had no significant differences in terms of usability. This example serves to illustrate that: a.fast-following smaller firms are always ready with newer and possibly superior products. b.customers of technology companies are becoming increasingly savvy and more demanding. c.the open source nature of technology ensures that no firm can expect to monopolize a market. d.firms need to employ increasingly stringent intellectual property norms to guard against infringements from smaller, competitive rivals. e.firms with low switching costs can sometimes be rapidly overtaken by strong rivals with additional competitive advantages.

firms with low switching costs can sometimes be rapidly overtaken by strong rivals with additional competitive advantages.

Personal digital assistants are: a.transaction processing systems that capture customer purchases. b.small chip-based tags that wirelessly emit a unique identifying code for the item that they are attached to. c.systems that provide rewards and usage incentives, typically in exchange for a method that provides a more detailed tracking and recording of customer activity. d.handheld computing devices meant largely for mobile use outside an office setting. e.artificial intelligence systems that leverage rules or examples to perform a task in a way that mimics applied human expertise.

handheld computing devices meant largely for mobile use outside an office setting.

The patent system is often considered to be unfairly stacked against startups because: a.bigger multinational firms enjoy patent protection in all countries as opposed to startups, which are domestic firms that do not get such protection for the most part. b.the intellectual property laws are not adequate to protect the interests of smaller firms from infringements. c.the patent system grants patents for innovations on a differential basis, with bigger firms getting precedence over start-ups. d.high litigation costs coupled with a few months of litigation can sink an early stage firm. e.patents are granted by the patent system on an ad hoc basis wherein firms that have been in business longer get patent protection for longer periods of time.

high litigation costs coupled with a few months of litigation can sink an early stage firm.

Which of the following is not a benefit achieved through Zara's integration of technology throughout the firm? a.limited product runs of many unique products b.higher markdowns c.fewer write-offs d.less need for advertising

higher markdowns

Zara's staff members regularly collect data from customers at its stores. This data is used to: a.decide the designs and styles of Zara's products for the next few seasons. b.determine the in-store soundtrack and layout. c.inform designers on customer preferences and staff on store sales results. d.determine where future Zara stores should be located. e.identify the products that customers would like to buy through discounted sales.

inform designers on customer preferences and staff on store sales results

When firms enjoy economies of scale they: a.have a greater share of liquid assets than rivals. b.have bigger production facilities than their competitors. c.have a wider employee base than their competitors. d.leverage the cost of an investment across increasing units of production. e.leverage investment costs to decrease their subscriber acquisition costs.

leverage the cost of an investment across increasing units of production.

Collaborative filtering is a classification of software that: a.is used to gather user ratings and calculate a gross average user rating for each movie. b.provides Netflix users with parental controls and other options while streaming movies online. c.selectively sorts movies based on their censor ratings and delivers age-appropriate search results. d.monitors trends among customers to personalize an individual customer's experience. e.collates user ratings for a movie and creates a ranked list of movies most liked by users.

monitors trends among customers to personalize an individual customer's experience.

Contract manufacturers used by the apparel industry are often criticized because: a.they hike up the costs of producing goods. b.firms cannot maintain high profit margins by employing them. c.they charge exorbitant labor costs that drive down sales. d.they are known to grossly overprice their services. e.of poor working conditions.

of poor working conditions

An internal team at Netflix developed a prototype set-top box to enable the direct streaming of content to customers' television sets. However, the idea of offering it to Netflix customers was dropped because: a.the market for online streaming was nascent and unprofitable. b.all major US cable firms built Netflix streaming into their set-top boxes. c.the Blu-ray standard requires streaming features, as well. d.of the brutally competitive nature of the consumer electronics business. e.the entire software team was recruited by TiVo after LinkedIn made it easy to target and poach rival talent.

of the brutally competitive nature of the consumer electronics business.

The e-commerce strategy that blends online and offline sales is called _____________. a.sales channel b.betterline c.omnichannel d.blended sales e.omniline

omnichannel

Operational effectiveness refers to: a.the implementation of technology in a business context. b.performing the same tasks better than rivals perform them. c.the number of times inventory is sold or used during the course of a year. d.performing different tasks or the same tasks in different ways. e.matching the benefits of a successful position while maintaining an existing position.

performing the same tasks better than rivals perform them.

Many telecom firms began digging up the ground and laying webs of fiberglass to meet the growing demand for Internet connectivity. However, rivals and startups began to imitate these firms and soon these new assets were not so rare and each day they seemed to be less valuable. It can be inferred from this example that: a.resource-based thinking can help avoid the trap of carelessly entering markets simply because growth is spotted. b.the telecommunications market is only big enough to support one or two major players. c.the immense scale advantages enjoyed by major firms can help them fight off competition from newer entrants. d.technology assets that require high investment and maintenance are liable to becoming obsolete much quicker than others. e.the scale of technology investment required to run a business is not a huge enough factor to act as a barrier to entry for new, smaller competitors.

resource-based thinking can help avoid the trap of carelessly entering markets simply because growth is spotted.

ROI is a term used to represent the: a.return on information b.rate of information-generated c.regular order intake d.return on investment e.relay-ordered inventory

return on investment

Businesses benefit from economies of scale when the cost of an investment can be: a.spread across increasing units of production. b.used in serving a niche and loyal customer base. c.used to build a brand image for products through advertising. d.leveraged to recruit consumers to promote a product or service. e.diverted to implementing technology upgrades in the business model.

spread across increasing units of production

A firm is said to be _____ when it attempts to match the benefits of a successful position while maintaining its existing position. a.switching b.straddling c.dovetailing d.streamlining e.vertically integrating

straddling

_____ refers to performing different tasks than rivals or the same tasks in a different way. a.Straddling b.Operational effectiveness c.Strategic positioning d.Vertical integration e.Scale advantage

strategic positioning

A firm's financial performance that consistently outperforms its industry's peers is known as _____. a.comparative advantage b.absolute advantage c.sustainable competitive advantage d.first mover advantage e.operational efficiency advantage

sustainable competitive advantage

Many firms have developed and deployed innovative information systems, only to see these systems go unused by key staff members. How has Zara helped ensure its systems will be used by staff? a.employees are monitored by in-store cameras b.employee time on information systems is recorded each time the system is engaged c.system use drives store success and as much as 70 percent of salaries are tied to sales performance d.all employees must have a Fair Factories Clearinghouse account, which is used to log and report employee activity e.systems were designed by employees, who feel a sense of ownership in the technology deployed

system use drives store success and as much as 70 percent of salaries are tied to sales performance

According to an independent study, Zara books some 85 percent of its products at full price compared to the industry average markdown ratio of 50 percent. This is made possible by: a.keeping a major part of the production processes under direct proprietary control. b.coordinating the outbound shipments of all Inditex brands with return legs loaded with return materials and half-finished items. c.applying data analytics to purchase trends. d.the practice of having limited production runs of its designs. e.leveraging contract manufacturers to produce only staple items with longer shelf-lives, which account for one-eighth of dollar volume.

the practice of having limited production runs of its designs.

In an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly _____, keeping huge swaths of its production process in-house. a.privatized b.vertically integrated c.publicly traded d.subsidized e.autonomous

vertically integrated

Leveraging consumers to promote a product or service is known as _____. a.straddling b.affiliating c.long tailing d.crowdsourcing e.viral marketing

viral marketing