LAUDON CH3
Which of the following illustrates the use of information systems to focus on market niche? A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules D) A grocery store chain's use of information systems to produce products and services at a lower price than competitors E) An airline's use of information systems to analyze detailed data on customers to determine each customer's profitability
A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy
How are information systems used at the industry level to achieve strategic advantage? A) By building industry-wide, IT-supported consortia and symposia B) By raising the bargaining power of suppliers C) By encouraging the entry of new competitors D) By enforcing standards that reduce the differences between competitors E) By enabling companies to develop customer intimacy
A) By building industry-wide, IT-supported consortia and symposia
Caterpillar Corporation is example of which of the following? A) Domestic exporter B) Multinational C) Franchiser D) Transnational E) Virtual company
A) Domestic exporter
________ is the ability to offer individually tailored products or services using the same production resources as mass production. A) Mass customization B) Size customization C) Personalization D) Demand customization E) CAD
A) Mass customization
The reduction of errors to 3.4 defects per million opportunities is central to the concept of: A) Six Sigma. B) TQM. C) benchmarking. D) cycle time reduction. E) BPR.
A) Six Sigma.
As discussed in the chapter opening case, which of the following statements about Verizon is not true? A) Verizon is focusing on satellite-based television in its competition with AT&T. B) Verizon claims that its wireless network is the largest and most reliable in the United States. C) AT&T is investing in upgrading its high-speed networks. D) Verizon sees acquiring companies involved in digital advertising as an investment for the future. E) Verizon offers a standalone video service.
A) Verizon is focusing on satellite-based television in its competition with AT&T.
Benchmarking: A) compares the efficiency and effectiveness of your business processes against strict standards. B) allows industry participants to develop industry-wide standards. C) is used to measure the speed and responsiveness of information technology. D) synchronizes the business processes of customers, suppliers, and trading partners. E) coordinates the value chains of independent firms to enable them to collectively produce a product or service.
A) compares the efficiency and effectiveness of your business processes against strict standards.
The ________ strategy is characterized by heavy centralization of corporate activities in the home country of origin. A) domestic exporter B) multinational C) franchise D) transnational E) virtual company
A) domestic exporter
All of the following are psychological aspects of quality except: A) effective marketing. B) the company's knowledge of its products. C) the product's reputation. D) the courtesy of salespeople. E) the sensitivity of support staff.
A) effective marketing.
In network economics, the value of a commercial software vendor's software products: A) increases as more people use them. B) decreases as more people use them. C) increases due to higher marginal gain in output. D) decreases according to the law of diminishing returns. E) is unrelated to the number of people that use them.
A) increases as more people use them.
Internet technology: A) makes it easy for rivals to compete on price alone. B) imposes a significant cost of entry, due to infrastructure requirements. C) increases the difference between competitors because of the wide availability of information. D) makes it easy to sustain operational advantages. E) has lessened competitive rivalries.
A) makes it easy for rivals to compete on price alone.
A firm can exercise greater control over its suppliers by having: A) more suppliers. B) fewer suppliers. C) global suppliers. D) local suppliers. E) only a single supplier.
A) more suppliers.
Walmart's continuous replenishment system allows it to do all of the following except: A) provide mass customization. B) transmit orders to restock directly to its suppliers. C) keep costs low. D) better meet customer demands. E) fine-tune merchandise availability.
A) provide mass customization.
Customer definitions of the quality of a product include all of the following except: A) uniformity of the product. B) accuracy of the advertising with respect to the product. C) durability and safety of the product. D) ease of use of the product. E) customer support for the product.
A) uniformity of the product.
A virtual company: A) uses networks to link people, assets, and ideas enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. B) uses Internet technology to maintain a virtual storefront. C) uses Internet technology to maintain a networked community of users. D) provides entirely Internet-driven services, or virtual products. E) is an example of the law of diminishing returns.
A) uses networks to link people, assets, and ideas enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations.
You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds custom computers to order. Define 3-D printing and explain how it might be relevant to this business?
Answer: 3-D printing, also known as additive manufacturing, uses a machine called a 3-D printer to make solid objects, layer by layer, from specifications in a digital file. 3-D printing is often used for custom manufacturing and therefore might be useful for Smalltown Computer in building custom computers.
Why should a company engage in business process reengineering? How would a company know if it needed or would gain from BPR?
Answer: A company should engage in BPR in order to enhance profits or sales through using information systems. To determine this, a company could study its value chain and business processes to see which points might be automated or be made more efficient, have value added or improve quality.
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?
Answer: At a certain scale of business, Better Bodies could employ globalization to purchase less expensive gym equipment, in a low-cost leadership strategy. The firm could use computers to monitor and evaluate health and fitness of members and customize workouts, in product differentiation strategy. It could use information systems for sales and marketing data research in order to define a niche market that would bring greater profits. The firm could allow customers to review their health data and add additional information or view statistics to create customer intimacy. If the individual gyms are franchises, then a network could be used for franchisees to share data and research new sales tactics, etc.
What is BPM? What are the steps involved in practicing BPM?
Answer: BPM is business process management, and is the practice of continuously improving business processes. The steps in BPM are (1) identifying processes for change, (2) analyzing existing processes, (3) designing the new process, (4) implementing the new process, and (5) continuous measurement.
Why are disruptive technologies "tricky"? Provide examples.
Answer: Disruptive technologies can be tricky because firms that invent disruptive technologies as first movers do not always benefit if they lack the resources to exploit the technology or fail to see the opportunity. For example, the MITS Altair 8800 is widely regarded as the first PC, but its inventors did not take advantage of their first-mover status. Second movers, so-called fast followers such as IBM and Microsoft, reaped the rewards. Citibank's ATMs revolutionized retail banking, but other banks copied them. Now all banks use ATMs, and the benefits go mostly to the consumers.
BPM ends once the new processes are both implemented and accepted.
Answer: FALSE
One of the best ways to reduce quality problems is to increase cycle time.
Answer: FALSE
Quality control is the sole goal of Six Sigma.
Answer: FALSE
Studies show that more than 75% of a business firm's profits can be explained by alignment of IT with business.
Answer: FALSE
TQM derives from concepts developed by Japanese quality experts
Answer: FALSE
The activities that measure the performance of your business processes against strict standards are called best practices.
Answer: FALSE
The effect of the Internet has been to increase a company's bargaining power vis-à-vis its customers.
Answer: FALSE
The inventors of a disruptive technology always benefit the most from the technology; and it is rare that fast followers catch up quickly.
Answer: FALSE
The law of diminishing returns does not apply to traditional products.
Answer: FALSE
The more people that use Microsoft Office software and related products, the lower its value.
Answer: FALSE
The power of customers is diminished in a transparent marketplace.
Answer: FALSE
How does the definition of quality differ from the customer and manufacturer perspectives?
Answer: From the perspective of a manufacturer, quality signifies conformance to specifications or the absence of variation from those specifications. A customer definition of quality is much broader. First, customers are concerned with the quality of the physical product—its durability, safety, ease of use, and installation. Second, customers are concerned with the quality of service, by which they mean the accuracy and truthfulness of advertising, responsiveness to warranties, and ongoing product support. Finally, customer concepts of quality include psychological aspects: the company's knowledge of its products, the courtesy and sensitivity of sales and support staff, and the reputation of the product.
How is Internet technology useful from a network economics perspective? Give examples.
Answer: In network economics, the cost of adding a participant to the network is negligible, while the gain in value is relatively much larger. The Internet itself is an example of a successful implementation of network economics - the more people participate, the more valuable and essential a commodity it is. If a company were to provide a service through the Internet such as a project management application, the costs to the company of adding another user are small (as the software infrastructure or application is already built), and the more users are signed up the more profit is made.
Discuss the ways information systems can be used to improve quality.
Answer: Information systems can help improve quality by reducing the number of steps and time taken to manufacture the product. There are fewer occasions for human error to be introduced the fewer and the simpler the steps in a process. Reducing the length of time taken in producing a product will also help limit mistakes, because shorter cycle times mean that problems are caught earlier, and that production tasks are easier to understand and perform. Information systems can also improve quality by providing analysis tools for measuring the success of procedures, establishing standards, and measuring performance against those standards (benchmarking). Information systems can play a key role in improving and automating design and production, as in the use of CAD. The ability of information systems to easily record and analyze customer data, as well as automate, customize, and improve customer service, also contributes to the overall quality of the product or service.
Why is identifying processes for change one of the most important strategic decisions that a firm can make?
Answer: One of the most important strategic decisions that a firm can make is understanding which business processes need improvement. When information systems are used to strengthen the wrong business model or business processes, the business can become more efficient at doing what it should not do. As a result, the firm becomes vulnerable to competitors who may have discovered the right business model. Considerable time and cost may also be spent improving business processes that have little impact on overall firm performance and revenue.
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?
Answer: Smalltown Computer will have difficulty in low-cost leadership, because it cannot exert economies of scale or other efficiencies of large PC manufacturers. However, it could emphasize customer intimacy, through face-to-face interaction with customers. It could also emphasize product differentiation, in that it supplies a hands-on, local experience and more trustworthy, higher quality service. Because it builds computers to order, the firm could also focus on market niche, by specializing in certain types of custom computers.
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?
Answer: Steps to align IT with your organization's goals include: identifying your business strategy and goals and breaking these goals into concrete activities and processes; identifying how you measure progress toward these goals; determining how IT can help achieve these goals and improve business processes and activities; and measuring the actual performance of the business.
A firm can be said to have competitive advantage when it uses commonly available resources more efficiently.
Answer: TRUE
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.
Answer: TRUE
Benchmarks may be external industry standards, standards other companies set, internally developed standards, or some combination of these.
Answer: TRUE
Business process reengineering involves the radical redesign of business processes.
Answer: TRUE
Franchisers are firms that have their product created, designed, financed, and initially produced in the home country but rely heavily on foreign personnel for further production, marketing, and human resources.
Answer: TRUE
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.
Answer: TRUE
Low-cost leadership is one of the four basic competitive strategies.
Answer: TRUE
Mapping and measuring existing processes is an important part of BPM.
Answer: TRUE
Strong linkages to customers and suppliers increase switching costs.
Answer: TRUE
The Internet has made it more difficult for companies to sustain operational advantages.
Answer: TRUE
The most significant barrier to successful business process change is organizational culture.
Answer: TRUE
The power of suppliers is one of the competitive forces that affect an organization's ability to compete.
Answer: TRUE
The value chain model classifies all company activities as either primary or support.
Answer: TRUE
When the output of some units can be used as inputs to other units, synergies develop, which can lower cost and generate profits.
Answer: TRUE
Why has the Internet made competitive rivalry more intense?
Answer: The Internet has made competitive rivalry more intense because Internet technology is based on universal standards that any company can use, making it easier for rivals to compete on price alone and for new competitors to enter the market. Because information is available to everyone, the Internet also raises the bargaining power of customers, who can quickly find the lowest-cost provider on the web, which may dampen profits. The Internet also widens the geographic market, increasing the number of competitors and reducing differences among competitors, and makes it more difficult to sustain operational advantages.
What are the four main ways of organizing businesses internationally, and what types of systems configurations do each of these types typically use?
Answer: The four main ways of organizing business internationally are domestic exporters, multinational, franchising, and transnational. Domestic exporters tend to have highly centralized systems in which a single domestic systems development staff develops worldwide applications. Multinationals allow foreign units to devise their own systems solutions based on local needs with few, if any, applications in common with headquarters (the exceptions being financial reporting and some telecommunications applications). Franchisers typically develop a single system, usually at the home base, and then replicate it around the world. Each unit, no matter where it is located, has identical applications. Transnational firms use networked systems that span multiple countries, using powerful telecommunications networks and a shared management culture that crosses cultural barriers.
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.
Answer: The value chain model highlights activities in a business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact. This model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position. The value chain model views the firm as a series or chain of basic activities that add a margin of value to a firm's products or services. These activities can be categorized as either primary activities or support activities. Primary activities are most directly related to the production and distribution of the firm's products and services, which create value for the customer, including inbound logistics, operations, outbound logistics, sales and marketing, and service. Support activities make the delivery of the primary activities possible and consist of organization infrastructure (administration and management), human resources, technology (improving products and the production process), and procurement. In value chain analysis, you ask at each stage of the value chain, "How can we use information systems to improve operational efficiency and improve customer and supplier intimacy?" The model allows you to critically examine how you perform value-adding activities at each stage and how the business processes might be improved. You can ask how information systems can be used to improve the relationship with customers and with suppliers who lie outside the firm value chain, but belong to the firm's extended value chain where they are absolutely critical to your success. Here, supply chain management systems that coordinate the flow of resources into your firm, and customer relationship management systems that coordinate your sales and support employees with customers are two of the most common system applications that result from a business value chain analysis
Which of the following illustrates the use of information systems to achieve product differentiation? A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules D) A grocery store chain's use of information systems to produce products and services at a lower price than competitors E) A hotel chain's use of information systems to analyze detailed data on guests to determine each guest's profitability
B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers
Based on your reading of the chapter case, which of the following did Carter's implement to transform the role of its finance function? A) CAD B) BPR C) TQM D) Benchmarking E) Value chain analysis
B) BPR Business Process Management
You are the production manager for a manufacturer of bicycle parts. Which of the following tools or technologies would you use to improve production precision? A) Value chain B) CAD software C) Benchmarking D) Industry best practices E) Porter's competitive forces model
B) CAD software
Which of the following technologies permits service calls to U.S. companies to be answered in India just as easily and inexpensively as if the help desk were in the United States? A) Cellular networks B) Internet telephony C) The World Wide Web D) Software as a web service E) TQM
B) Internet telephony
Which of the following companies used benchmarking to achieve an order-shipping accuracy of 99.9 percent? A) Ford Motor Co. B) L.L. Bean C) GE Aviation D) Nike E) 1-800-Flowers
B) L.L. Bean
Seeing quality as the responsibility of all people and functions in an organization is central to the concept of: A) Six Sigma. B) TQM. C) quality control. D) cycle time reduction. E) benchmarking.
B) TQM.
Which of the following statements about 3-D printing is not true? A) 3-D printing is also known as additive manufacturing. B) Unlike traditional techniques, 3-D printing results in some wasted material. C) 3-D printing can create objects from plastic, metal, or composite materials. D) CAD systems supply data for 3-D printing. E) 3-D printing is often used to fashion items for small production runs.
B) Unlike traditional techniques, 3-D printing results in some wasted material.
A firm that locates all systems development and operations at its headquarters is using a ________ system configuration. A) unilateral B) centralized C) decentralized D) networked E) virtual
B) centralized
When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a ________ strategy. A) product differentiation B) market niche C) mass customization D) process efficiency E) market transparency
B) market niche
The ________ strategy concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. A) domestic exporter B) multinational C) franchise D) transnational E) virtual company
B) multinational
The idea that the more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output, is referred to as: A) the point of no return. B) the law of diminishing returns. C) supply and demand. D) inelasticity. E) virtual economics.
B) the law of diminishing returns.
Which of the following illustrates the use of information systems to strengthen customer and supplier intimacy? A) A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy B) A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to their production schedules D) A grocery store chain's use of information systems to produce products and services at a lower price than competitors E) An airline's use of information systems to analyze detailed data on customers to determine each customer's profitability
C) A PC manufacturer's use of information systems to facilitate direct access from suppliers to their production schedules
Which of the following statements about BPR is not true? A) BPR can result in a paradigm shift. B) BPR can lead to dramatic gains in productivity and efficiency. C) BPR is the easiest type of BPM to implement. D) Amazon is an example of BPR. E) BPR typically involves radical change.
C) BPR is the easiest type of BPM to implement.
Final assembly of iPhones occurs in which of the following countries? A) United States B) South Korea C) China D) Germany E) Japan
C) China
________ systems are those in which development occurs at the home base, but operations are handed over to autonomous units in foreign locations. A) Transnational B) Decentralized C) Duplicated D) Networked E) Virtual
C) Duplicated
Which of the following is not one of the competitive forces in Porter's model? A) Suppliers B) Competitors C) External environment D) Customers E) Technology
C) External environment
________ typically develop a single information system, usually at the home base, and then replicate it around the world. A) Domestic exporters B) Multinational firms C) Franchisers D) Transnational firms E) Virtual companies
C) Franchisers
Which of the following is the first step in BPM? A) Reduce cycle time and simplify the production process. B) Improve design quality and precision. C) Identify processes for change. D) Extend the value chain. E) Identify synergies.
C) Identify processes for change.
Which of the following industries has the lowest barrier to entry? A) Automotive B) Computer chip C) Small retailer D) Airline E) Solar energy
C) Small retailer
To what competitive force did the printed encyclopedia industry succumb? A) Positioning and rivalry among competitors B) Low cost of entry C) Substitute products or services D) Increased bargaining power of customers E) Increased bargaining power of suppliers
C) Substitute products or services
In a ________ system configuration, separate information systems are designed and managed by each foreign unit. A) duplicated B) centralized C) decentralized D) networked E) virtual
C) decentralized
Hilton Hotels' use of customer information software to identify the most profitable customers to direct its services to is an example of using information systems to: A) strengthen customer intimacy. B) differentiate their service. C) focus on market niche. D) increase efficiency. E) provide services at a lower price than its competitors.
C) focus on market niche.
All of the following are ways to improve quality except: A) improving products and services based on customer demands. B) simplifying the production process. C) implementing a new information system. D) improving production precision. E) reducing cycle time.
C) implementing a new information system.
The Internet raises the bargaining power of customers most effectively by: A) creating new opportunities for building loyal customer bases. B) making more products available. C) making information available to everyone. D) lowering transaction costs. E) reducing barriers to entry.
C) making information available to everyone.
All of the following have been disruptive technologies except: A) the PageRank algorithm. B) digital photography. C) minicomputers. D) the iPod. E) the automobile.
C) minicomputers.
All of the following are considered primary activities of a firm except: A) inbound logistics. B) sales and marketing. C) procurement. D) service. E) outbound logistics.
C) procurement.
When the output of some units can be used as inputs to other units, or if two organizations pool markets and expertise that result in lower costs and generate profits, ________ are created. A) value webs B) value chains C) synergies D) core competencies E) benchmarks
C) synergies
A ________ is a collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively. A) value chain B) business network C) value web D) consortia E) supply chain
C) value web
Which of the following is not one of the four basic strategies a company can employ to deal with competitive forces? A) Strengthen customer and supplier intimacy B) Focus on market niche C) Differentiate products D) Compete on employee loyalty E) Low-cost leadership
D) Compete on employee loyalty
Which of the following is pursuing a transnational strategy? A) Caterpillar Corporation B) Ford Motor Co. C) Intel Corporation D) Nestlé E) Starbucks
D) Nestlé
A manufacturer of deep-sea oil rigs may be least concerned about which of these marketplace forces? A) Product differentiation B) Traditional competitors C) Low number of suppliers D) New market entrants E) Substitute products
D) New market entrants
Which of the following statements about cycle time is not true? A) Cycle time refers to the total elapsed time from the beginning of a process to its end. B) Shorter cycle times mean that problems are caught earlier in the process. C) Finding ways to reduce cycle time often means finding ways to simplify production steps. D) The fewer steps in a production process, the more likely that an error will occur. E) Information systems can help reduce cycle time.
D) The fewer steps in a production process, the more likely that an error will occur.
Which of the following is not an advantage for new companies entering the marketplace? A) They can implement new systems and equipment. B) They are not locked into an existing brand image. C) They are more highly motivated. D) They can establish new relationships with suppliers. E) They can often hire younger, less expensive workers.
D) They can establish new relationships with suppliers.
Which of the following can force a business and its competitors to compete on price alone? A) High product differentiation B) Poor process efficiency C) Demand control D) Transparent marketplace E) Multiple competing suppliers
D) Transparent marketplace
Which of the following is not a true statement about value webs? A) Value webs involve a collection of independent firms that use information technology to coordinate their value chains. B) Value webs are more customer-driven than traditional value chains. C) Value webs operate in a less linear fashion than traditional value chains. D) Value webs are inflexible and cannot adapt quickly to changes in supply and demand. E) Value webs involve highly synchronized industry value chains
D) Value webs are inflexible and cannot adapt quickly to changes in supply and demand.
The most successful solutions or methods for achieving a business objective are called: A) core processes. B) best processes. C) benchmarks. D) best practices. E) value webs.
D) best practices.
An information system can enhance core competencies by: A) providing better reporting facilities. B) creating educational opportunities for management. C) allowing operational employees to interact with management. D) encouraging the sharing of knowledge across business units. E) synchronizing the value chains of business partners with an industry.
D) encouraging the sharing of knowledge across business units.
The value chain model: A) categorizes five related advantages for adding value to a firm's products or services. B) sees the supply chain as the primary activity for adding value. C) categorizes four basic strategies a firm can use to enhance its value chain. D) helps a firm identify points at which information technology can most effectively enhance its competitive position. E) focuses primarily on collaboration with suppliers.
D) helps a firm identify points at which information technology can most effectively enhance its competitive position.
An information system can enable a company to focus on a market niche through: A) complex trend forecasting. B) tailoring products to the client. C) intensive product trend analysis. D) intensive customer data analysis. E) tightening linkages with suppliers.
D) intensive customer data analysis.
The support activities of a firm include: A) inbound logistics, technology, outbound logistics, sales and marketing, and service. B) inbound logistics, organization infrastructure, outbound logistics, technology, and procurement. C) organization infrastructure, human resources, sales and marketing, and technology. D) organization infrastructure, human resources, technology, and procurement. E) sales and marketing, procurement, human resources, and technology.
D) organization infrastructure, human resources, technology, and procurement.
Which of the following statements about network economics is not true? A) eBay is an example of a business model that is based on the principle of network economics. B) The law of diminishing returns does not always apply to every situation. C) From a network economics perspective, the value of a community of people grows as the number of participants in the community increases. D) Information technology can be strategically useful from a network economics perspective. E) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.
E) In network economics, the marginal cost of adding new members to the network is higher than the marginal gain.
Amazon used which of the following to reduce errors in order fulfillment? A) BPR B) 3-D printing C) TQM D) BPM E) Six Sigma
E) Six Sigma
BPM tools can do all of the following except: A) capture and enforce business rules for performing processes. B) integrate existing systems to support new or redesigned processes. C) create models of improved processes. D) document processes requiring improvement. E) create a digital model of a part, product or structure.
E) create a digital model of a part, product or structure.
All of the following could be considered substitute products for industrial electricity generation except: A) solar. B) wind. C) coal. D) hydro-power. E) ethanol.
E) ethanol.
The emergence of software as a web service has acted as a disruptive technology for: A) traditional key-word search engines. B) telecommunications providers. C) PC manufacturers. D) local Internet service providers. E) traditional boxed software companies.
E) traditional boxed software companies.
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?
• Competitors to the iPad include the Microsoft Surface and many others, but few as widely known. • New market entrants: There is not a huge barrier to entry in this field; many other technology companies offer tablet computers. • Substitute products and services: Smartphones are a substitute product or service. • Customers: The iPad still has the highest brand recognition among consumers, diminishing the bargaining power of customers. However, this advantage has diminished as other similar products that are as well designed enter the marketplace. In terms of the iPad, Apple seems to be focused on product differentiation by creating a product with unique features and capabilities.
