Chapter 3

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

Which of the following is an example of synergy in business? A) Amazon's use of the Internet to sell books B) Bank of America acquiring Countrywide Financial Corporation to reach a large pool of new customers C) Netflix combining traditional video rental with online video subscriptions D) Walmart's order entry and inventory management system to coordinate with suppliers E) Nike's use of technology to improve its product offerings

B

A(n) ________ 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. A) value chain B) support web C) value web D) consortium E) virtual web

C

Under Mintzberg's classification of organizational structure, knowledge-based organizations fall under the category of: A) entrepreneurial structures. B) divisionalized bureaucracies. C) professional bureaucracies. D) adhocracies. E) machine bureaucracies.

C

T/F: The inventors of a disruptive technology typically benefit the most from the technology; it is rare that fast followers catch up quickly.

False

T/F: The law of diminishing returns only applies to digital products.

False

T/F: A company's competitive advantages ultimately translate into higher stock market valuations than its competitors.

True

T/F: A firm can be said to have competitive advantage when it has access to resources that others do not.

True

T/F: According to the network economics perspective, the more people offering products on eBay's site, the greater the value of the site to all who use it.

True

T/F: Information systems are used to enable new products and services via product differentiation.

True

T/F: Routines are also called standard operating procedures.

True

T/F: Smart products increase rivalry among firms.

True

T/F: Switching costs increase when customers are strongly linked to products and platforms.

True

T/F: The entire customer experience can be an element of product differentiation.

True

T/F: The market power of suppliers can have a significant impact of firm profits.

True

According to agency theory, the firm is viewed as a(n): A) unified, profit-maximizing entity. B) task force organization that must respond to rapidly changing environments. C) entrepreneurial endeavor. D) "nexus of contracts" among self-interested individuals. E) entrepreneurial structure.

D

Walmart's continuous replenishment system is an example of a firm using information systems to: A) strengthen ties to its customers. B) simplify the industry value chain. C) develop synergies. D) focus on market niche. E) achieve low-cost leadership.

E

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

The ________ model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position. A) competitive forces B) value chain C) virtual company D) business ecosystem E) Mintzberg classification

B

T/F: The value chain model classifies all company activities as either primary or support activities.

True

Which of the following statements about disruptive technologies is not true? A) Disruptive technologies radically change the business landscape and environment. B) Disruptive technologies may be substitute products that perform better than other products currently being produced. C) Disruptive technologies may sometimes simply extend the marketplace. D) Disruptive technologies may put entire industries out of business. E) Firms that invent disruptive technologies as first movers always become market leaders.

E

Mintzberg classifies a large bureaucracy existing in a slowly changing environment that produces standard products and is dominated by centralized management as a(n): A) machine bureaucracy B) professional bureaucracy C) divisionalized bureaucracy D) multidivisional bureaucracy E) adhocracy

A

Struggles for resources, competition, and conflict within an organization that result from divergent viewpoints about how resources, rewards, and punishments should be distributed are an example of which of the following? A) Organizational culture B) Organizational politics C) Organizational structure D) Organizational environment. E) Business processes

B

The four major competitive strategies are: A) low-cost leadership, substitute products and services, customers; and suppliers. B) low-cost leadership, product differentiation, focus on market niche, and strengthening customer and supplier intimacy. C) new market entrants, substitute products and services, customers, and suppliers. D) low-cost leadership, new market entrants, product differentiation, and focus on market niche. E) customers, suppliers, new market entrants, and substitute products.

B

Which of the following statements about the technical view of organizations is not true? A) It focuses on how inputs are combined to create outputs when technology changes are introduced into a company. B) It sees capital and labor as being easily substituted for one another. C) It emphasizes group relationships, values, and structures. D) It sees the organization as a social structure. E) It sees the firm as being infinitely malleable.

C

Which of the following is a support activity in a firm's value chain? A) Inbound logistics B) Operations C) Sales and marketing D) Service E) Technology

E

Which of the following is an example of a keystone firm within a business ecosystem? A) Apple and the mobile platform ecosystem B) GUESS and the fashion ecosystem C) Citibank and the ATM ecosystem D) American Airlines and the computerized reservation ecosystem E) Nike and the athletic apparel ecosystem

A

Which of the following represent the primary activities of a firm? A) Inbound logistics, operations, outbound logistics, sales and marketing, and service B) Inbound logistics, operations, outbound logistics, technology, and service C) Procurement, inbound logistics, operations, technology, and outbound logistics D) Procurement, operations, technology, sales and marketing, and services E) Organization infrastructure, human resources, technology, and procurement

A

________ is a competitive strategy for creating brand loyalty by developing new and unique products and services that are not easily duplicated by competitors. A) Product differentiation B) Low-cost leadership C) Focusing on market niche D) Strengthening customer intimacy E) Strengthening supplier intimacy

A

Which of the following models uses a general view of the firm, its competitors, and the firm's environment to understand competitive advantage? A) Network economics model B) Competitive forces model C) Competitive advantage model D) Demand control model E) Agency costs model

B

All of the following are IT-enabled products and services providing competitive advantage except: A) Amazon's one-click shopping. B) Apple's iTunes. C) Ping's golf club customization. D) PayPal's online person-to-person payment system. E) Nike's use of celebrities to market their products.

E

Along with capital, ________ is the primary production input that the organization uses to create products and services. A) structure B) culture C) politics D) feedback E) labor

E

Hilton Hotels uses its OnQ system for which of the following purposes? A) To lower its operating costs B) To benchmark its progress against competitors C) To create synergies with its suppliers D) To take advantage of network economics E) To estimate each guest's profitability and give additional privileges to profitable customers

E

Which of the following industries has the lowest barrier to entry? A) Automotive B) Computer chip C) Solar energy D) Airline E) Small retailer

E

T/F: The term industry sets refers to collections of industries that provide related services and products that deliver value to the customer.

True