MIS CH01,02,03,04,08

5. 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

a

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

a

1. 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.

a

1. _____ involves outsourcing production to third-party firms. a. Vertical integration b. Long tailing c. Peer production d. Contract manufacturing e. Viral production

d

1. _____ refers to removing an organization from a firm's distribution channel. a. Disbarment b. Repudiation c. Annulment d. Disintermediation e. Revocation

d

1. A market dominated by a small number of powerful sellers is known as a(n) _____ . a. oligopoly b. pure play c. short tail d. blue ocean e. greenfield

a

1. Dell, previously the world's number one PC manufacturer, has seen its market share shrink because of rivals copying its value chain and reducing the price advantage it enjoyed over rivals. Dell's present struggles: a. underscore the importance of continually assessing a firm's strategic position among changing market conditions. b. are a result of rivals adopting supply chain management of software products that have yielded competitive advantages. c. imply that publicly traded firms are at a disadvantage in the technology sector. d. highlight the fact that scale advantages of an established firm are a huge factor in discouraging newer entrants to a market. e. demonstrate that resource-based thinking can help firms avoid the trap of carelessly entering markets simply because growth is spotted.

a

1. For traditional retailers selling physical goods, _____ is the biggest constraint limiting a firm's ability to offer customers what they want and when they want it. a. shelf space b. video piracy c. shipping costs d. distribution rights e. disintermediation

a

1. 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

a

1. Large firms often find new markets attractive, but might not have products ready for delivery. What strategy do such firms use to get potential adopters to delay their purchasing decisions? a. Preannounce forthcoming efforts b. Make their new products compatible with the leading standard c. Spread costs across increasing units of production or in serving multiple customers d. Give away products for half of a two-sided market to seed the market e. Leverage customers of their other products to promote a new product

a

1. Which of the following terms is used as an alternative to switching costs? a. Lock-in b. Complementary benefits c. Exchange benefits d. Straddling costs e. Network impedance

a

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

a

4. 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!

a

5. Technology experts in the area of user-interface design: a. work to make sure systems are intuitive and easy to use. b. leverage technology to make legacy systems more efficient. c. specialize in technology for competitive advantage. d. focus on effective back-up systems for critical business data. e. provide direction on technology-related security issues.

a

1. Due to limited production runs, Zara's customers: a. tend to delay their shopping until the products go on sale. b. visit the stores more often. c. buy products at discounted rates after a few weeks. d. visit stores less often. e. create a greater opportunity for increased markdowns and writeoffs.

b

1. 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

c

1. A low _____ is usually key to a firm's profitability because acquiring a customer is more expensive than keeping one. a. subscription fee b. inventory size c. churn rate d. switching cost e. opportunity cost

c

1. A market is said to be _____ if it derives most of its value from a single class of users. a. a pure play b. a long tail c. core competent d. one-sided e. convergent

d

1. 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

d

1. Brands are built through _____. a. customer awareness b. data assets c. excessive advertising d. customer profiling e. customer experience

e

1. 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; Moderate

1. A firm can spend no money and time, yet expect to enhance its offerings, by: a. allowing other firms to contribute to its platform. b. going public through an initial public stock offering. c. outsourcing critical processes to third parties. d. adopting an envelopment strategy. e. preannouncing a forthcoming product to lower sales of current offerings.

a

1. By going public, Netflix encountered competition from the large, established firms Wal-Mart and Blockbuster. What aspect of Netflix going public lured these firms into the market? a. By going public, Netflix was required to disclose its financial position. b. By going public, Netflix was forced to reveal the Cinematch algorithm used to classify user ratings. c. Netflix's model of flat-rate monthly subscriptions was found to be more profitable than a per-disc rental fee model. d. Netflix's plan to enter the online movie streaming market alerted rivals to the possibility of losing their market share. e. The migration of Netflix services to cover the Blu-ray disc market opened up opportunities for rivals.

a

1. Cisco purchased Pure Digital, maker of the Flip video recorder, but ended up shutting the unit down a little over two years later. The reason for Cisco's failure was: a. Envelopment. Smartphone manufacturers and music players began to offer video recording features, enveloping the benefit provided by Pure's gear in their offerings. b. Network effects. Late-arriving Cisco could not compete against the dominance of existing, incompatible standards created by early-moving incumbents. c. The Osbour Effect. Cisco preannounced a product and no one wanted its current offerings. d. Staying power. Consumers weren't convinced a small firm like Cisco could win in the market.

a

1. How did Apple trump Google to become the dominant mapping platform on iOS? a. Apple's control of iOS gave it control of the distribution channel to reach its users, kicking Google out as the default mapping app and capturing the majority of user engagement. b. Apple sued Google for copyright infringement related to the look and feel of Apple Maps. c. Apple sued Google for privacy violations related to the collection of map data. d. Apple hasn't trumped Google Maps. Google's Map app is used by the majority of iOS customers, whereas most users ignore Apple Maps.

a

1. 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.

a

1. How does the Cinematch recommendation system work? a. Cinematch develops a map of user ratings and steers users toward titles preferred by people with similar tastes. b. Cinematch gathers user ratings to calculate a gross average user rating which is continually updated with each subsequent user rating. c. Cinematch requests users to create profiles detailing their interests and preferences and serves recommendations accordingly. d. Cinematch uses a team of professional movie critics to create a comprehensive ranking system for each movie in its inventory. e. Cinematch ranks movies in two separate lists based on their critical and box office ratings, and subsequently alters user preferences.

a

1. 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

a

1. 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.

a

1. Nokia is a cell phone brand that offers digital cameras as part of its cell phone products. It is now in direct competition with camera brands such as Canon and Sony, and has become the world's largest seller of cameras. This is an example of: a. envelopment. b. product customization. c. market diversity. d. product development. e. market innovation.

a

1. The practice of windowing involves: a. making content available to a distribution channel for a specified time period under a different revenue model. b. scheduling movies to be streamed online at primetime periods to pull in more revenue from advertising. c. relaying advertisements for limited time periods during online movie steaming, as opposed to frequent ad breaks. d. displaying content in apps and browser windows. e. streaming movies to customers' computers beforehand and then relaying them on television.

a

1. Uber and PayPal used similar strategies when trying to jumpstart network effects that were vital in creating their dominance. What did each do? a) Leveraged viral customer promotions by giving incentives to consumers who helped recruit friends to the servcie. b) Operated in "Blue Ocean" that, to this day, remains free of competitors c) Preannoucned their products, discouraging rivals from entering with competing offerings d) Created services that were backward-compatible with rivals, reducing switching costs for anyone interested inleaving incumbents for their services.

a

1. 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

a

1. Which of the following represents one of the primary components of the value chain? a. Outbound logistics b. Firm infrastructure c. Human resource management d. Research and development e. Procurement

a

1. Zara is susceptible to any disruption in northern Spain because: a. it moves all of its deliveries through just two locations, both in Spain. b. it conducts its trade operations based on the American dollar rather than the stronger euro. c. most of Zara's products are sold in markets outside Spain and Europe. d. Zara's products are sold at much lower costs around the world than in Spain, and this harms profitability. e. Zara's production facilities in Asia and Central America are threatening employment in Spain.

a

1. Zara's IT expenditure is low by fashion industry standards and is also highly effective. Which of the following makes this possible? a. Targeting technology investment at points in the value chain where it has the most significant impact. b. Utilizing the money spent on IT infrastructure to improve the IT skills of its employees through training programs. c. Using the best and most expensive software and hardware in the market, as it lowers any maintenance costs later. d. Outsourcing IT management to third-party firms which provide IT services at lower costs. e. Investing IT funding in improving the infrastructure and cutting down employee overhead costs.

a

1. Zara's production costs could rise at higher rates than its competitors because many of the firm's costs are tied to the _____. a. euro b. dollar c. yen d. pound e. franc

a

1. _____ 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

a

1. _____ is a non-profit organization that shares audit information on contract manufacturers among members of the apparel industry and other industries. a. Fair Factories Clearinghouse b. Pricewaterhouse Coopers c. Amnesty International d. Klynveld Main Goerdeler e. Transparency International

a

1. 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

b

1. Adobe gives away the Acrobat Reader to build a market for the sale of software that creates Acrobat files. This is an example of: a. one market attempting to conquer a new market by making it a subset, component, or feature of its primary offering. b. firms giving away products for half of a two-sided market to seed the market. c. markets, once considered distinctly separate, beginning to offer similar features and capabilities. d. firms taking advantage of complementary products developed for a prior generation of technology. e. firms spreading costs across increasing units of production or in serving multiple customers.

b

1. At Zara, clothes are ironed in advance and packed on hangers, with security and price tags affixed. This system means that employees in Zara stores simply move items from shipping box to store racks, spending most of their time on: a. outsourcing their sales activities. b. value-added functions like helping customers find what they want. c. wrestling with inventory during busy periods. d. packing unsold merchandise that need to be returned to the distribution center. e. whisking items from their stores to the staging areas.

b

1. 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

b

1. Customers who owned Nintendo's 8-bit video game console were unable to play the same games on the firm's new 16-bit Super Nintendo system. There was little incentive for existing Nintendo fans to stick with the firm. In this case, Nintendo's new offering suffered from a lack of: a. switching costs. b. backward compatibility. c. staying power. d. effective pricing. e. network effects.

b

1. Factors such as weather, natural disaster, terrorism, labor strife, or political unrest can shut down a firm's operations. Which of the following is one of the measures taken by firms to hedge such risks? a. Driving up profitability by increasing prices of market goods b. Spreading productions facilities across the globe c. Requesting government intervention in the form of subsidies or nationalization d. Sourcing raw materials from countries with low labor costs e. Diverting marketing and advertising budgets to accommodate greater production

b

1. 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. Prada managers were enamored with technology and failed to consider implications across all components of the new information systems. 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.

b

1. How does Cinematch offer Netflix additional operational advantages for the DVD-by-mail business? a. Cinematch offers alternate recommendations of movies based on critical acclaim and box office performance parameters. b. Cinematch is linked to warehouses and recommends movies that are likely to be in stock. c. Cinematch is often used by movie studios to plan movie scripts based on user preferences. d. Cinematch is a source of additional revenue to Netflix as a marketing tool for recommending newly-released movies. e. Netflix leases the Cinematch collaborative filtering software to smaller firms at a fee, withholding the valuable user ratings.

b

1. 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

b

1. Marginal costs: a. are minor, insignificant costs. b. are associated with each additional unit produced. c. are the costs incurred as a result of choosing one option over another. d. are constant and do not vary according to production volume. e. are also known as overhead.

b

1. Netflix enjoys the triple scale advantage of the largest customer base, the largest selection, and the largest network of distribution centers. This can be attributed to: a. Netflix's specialized focus on advertising and marketing. b. Netflix's first-mover advantage. c. Netflix going public to generate funds for expansion. d. Netflix's effective and aggressive pricing strategy. e. the bargaining clout it exercises over movie studios and the government.

b

1. Netflix has used the long tail in the DVD-by-mail business to its advantage, crafting a business model that creates close ties with film studios. What do film studios stand to gain from taking advantage of the Netflix model targeted at increasing the firm's long-tail offerings? a. Discounted fees for marketing some of the less-popular titles from the studios b. A cut of the subscription revenue from every disk sent out by Netflix c. Greater bargaining power with movie rental firms such as Netflix, Blockbuster, and Wal-Mart d. Lower costs related to screening movies in cinemas by releasing them straight on DVD e. An equal share of revenue from the digital distribution model through online streaming

b

1. 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.

b

1. 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

b

1. 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

b

1. The video game console market offers important lessons for the strategist. The video game console market is a network market in which Sony's PlayStation 2 (PS2) dominated over Microsoft's Xbox offering. This has been possible due to: a. the low pricing of Xbox which eroded users' confidence in the product. b. game developers favoring PS2 for its larger user base obtained because the PS2 was launched months before the Xbox. c. the presence of several cheap, rival imitations which ate into Xbox's market share. d. PS2's technical superiority over the Xbox. e. the straddling strategy adopted by Microsoft to expand in both video game and DVD player markets.

b

1. 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

b

1. Which of the following is true of Netflix? a. It started as two separate services but is now viewed as a single subscription. b. It began as a DVD subscription model and then simultaneously introduced a video streaming subscription while maintaining the legacy business. c. It isn't a substitute good for conventional use-based media rental. d. It got its start offering a DVD-by-mail service for an annual, per-disc rate subscription fee. e. It started out as an IPO.

b

1. Which of the following products or services is not subject to network effects? a. Banking services b. Snack chip manufacturing c. Video game consoles d. Social networks e. Cell phone services

b

1. Which statement best describes the relationship between network effects and innovation? a. Network effects decrease innovation within a standard but increase the number of innovative offerings that compete against a strongly established standard. b. Network effects increase innovation within a standard but decrease the number of innovative offerings that compete against a strongly established standard. c. More often than not, network effects foster innovation d. More often than not, network effects limit innovation

b

1. 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

b

1. ____ 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

b

5. A company uses radio frequency identification (RFID) tags to keep track of its inventory. This is an example of the impact of technology in the area of _____. a. accounting b. operations c. advertising d. human resources e. finance

b

5. 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

1. A value chain is a set of: a. similarly profitable firms competing against each other in any given industry. b. large firms that are vertically integrated. c. activities through which a product or service is created and delivered to customers. d. a large number of small firms that dominate a given market. e. robotically controlled conveyor belts that deliver product quickly from manufacturing stations to shipping containers.

c

1. Apple, which controls over 75 percent of digital music sales, was able to dictate song pricing for years, despite the tremendous protests of the record labels. This implies that: a. despite the presence of network effects, the music industry is not dominated by any single leader. b. the presence of multiple new entrants forces leading firms to drop prices of their offerings. c. firms with strong market dominance can enjoy substantial bargaining power over partners. d. a dominant market share does not necessarily translate to greater profitability for a firm. e. there were cross-side network effects between the various music labels.

c

1. Benefits related to a firm's size are referred to as _____. a. network effects b. brand recall c. scale advantages d. vertical integration e. disintermediation

c

1. 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.

c

1. In exchange for a percentage of the DVD-by-mail subscription revenue for every disk sent out by Netflix, movie studios offer Netflix: a. online streaming rights free of cost. b. higher fees for marketing less-popular movies. c. DVD titles at a discounted or wholesale price. d. distribution rights to certain movies free of cost. e. strong bargaining power in negotiations for digital distribution rights.

c

1. 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

c

1. 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.

c

1. The Zara experience involves a regular supply of new stock on the shelves, because of which customers tend to visit Zara's stores more often than they visit other retailers' stores. However, such a policy will become more expensive to maintain if: a. star designers demand a higher fee for its designs. b. PDAs are not used. c. fuel costs rise. d. Zara's horizontal integration fails. e. Zara outsources its production process.

c

1. The paths through which products or services get to customers are known as _____. a. information pathways b. vertical markets c. distribution channels d. proxy networks e. horizontal markets

c

1. The resource-based view of competitive advantage states that for a firm to maintain sustainable competitive advantage it must control a set of exploitable resources that have four critical characteristics. What are these characteristics? a. inventory turns, high margins, long account payable periods, brand building relationships b. operational effectiveness, strategic positioning, scale, distribution channels c. rareness, value, imperfect imitability, non substitutability d. a web site, an app, cloud-based systems, a savvy technology staff

c

1. User ratings act as _____ for Netflix's customers. a. marginal costs b. fixed costs c. switching costs d. variable costs e. barriers to entry

c

1. 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.

c

1. Which of the following represents an advantage enjoyed by the Netflix DVD-by-mail business over traditional video stores? a. Lower technology overhead b. Lower shipping expenses c. Larger entertainment selection d. Higher energy costs e. Higher churn rates

c

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

d

1. While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to develop a machine to appeal to families, women, and age groups that normally shunned violent games. The strategy adopted by Nintendo in this example is the _____ strategy. a. straddling b. customer engagement c. Blue Ocean d. mass customization e. convergence

c

1. While the size of the tail in the long tail phenomenon is disputable, one fact that is critical to remain above this debate is that: a. traditional brick and mortar retailers offer selections that cannot be rivaled by Internet pure-plays. b. energy costs and worker wages drive up the costs of running stores like Netflix. c. selection attracts customers, and the Internet allows large-selection inventory efficiencies that offline firms can't match. d. the turnover rate of obscure titles in traditional video rental stores is only slightly higher than those for Internet pure-plays. e. the cost of store maintenance and real estate makes stores such as Netflix unattractive.

c

1. 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.

c

1. 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.

c

1. 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.

c

1. _____ are products or services that add additional value to the primary product or service that makes up a network. a. Quantum efforts b. Substitute components c. Complementary benefits d. Orthogonal gains e. Standby additions

c

1. _____ is said to occur when one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering. a. Acquisition b. Greenfield investment c. Envelopment d. Market leapfrogging e. Monopolization

c

1. _____ occur(s) when increasing number of users lower the value of a product or service. a. Network internalities b. Market inflexibility c. Congestion effects d. Backward incompatibility e. Convergence

c

1. _____ 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

c

1. _____ 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

c

1. _____ was just a sophomore when he began building computers in his dorm room at the University of Texas. His firm would one day claim the top spot among PC manufacturers worldwide. a. Bill Gates b. Steve Jobs c. Michael Dell d. Shawn Fanning e. Mark Zuckerberg

c

4. Sergey Brin and Larry Page were both twenty-something doctoral students at Stanford University when they founded: a. Yahoo! b. YouTube. c. Google. d. Amazon. e. Napster.

c

5. Technology experts in the area of _____ specialize in technology for competitive advantage. a. user-interface design b. process design c. strategy d. database design e. hardware

c

1. A strong brand can be an exceptionally powerful resource for competitive advantage by lowering ________, proxying _____ and inspiring _____. a. price; strategy; innovation b. switching costs; quantity; performance c. expenses; marketing; respect d. search costs; quality; trust e. customer concern; investment; profits

d

1. 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.

d

1. 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.

d

1. Apple's dominance of smartphone and tablet markets has allowed the firm to lock up 60 percent of the world's supply of advanced touch-screen displays, and to do so with better pricing than would be available to smaller rivals. This is an example of: a. network externalities that make Apple valuable. b. high switching costs for suppliers. c. a complex tech product establishing itself as a killer brand. d. a growing firm gaining bargaining power with its suppliers. e. low search costs associated with a famous brand.

d

1. Churn rate is a term that refers to the: a. average number of recommended titles in a user's queue. b. rate at which the demand for a product or service fluctuates with price change. c. number of movie titles that are difficult to assign reliable user ratings. d. rate at which customers leave a product or service. e. number of new users that each existing user attracts through word-of-mouth and social sharing.

d

1. 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.

d

1. Even if Netflix gave Cinematch away to its rivals, they would still not be able to make the same kind of accurate recommendations as Netflix. This is because of Netflix's _____. a. technological superiority b. customer loyalty c. movie expertise d. data advantage e. large inventory

d

1. 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

d

1. One contributor to the easy with which young entrepreneurs can have success is low-cost distribution to massive markets worldwide. This is enabled by: a. legacy systems b. big data and business analytics c. Esoko and M-Pesa d. App stores e. Sproxil

d

1. 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.

d

1. 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

d

1. Startup firms can struggle to gain lower prices from rivals, but FreshDirect seems to have found several ways to gain lower supplier prices. FreshDirect buys direct from suppliers, eliminating any markup from a middleman. In addition to this, the firm employs other methods to get lower prices from suppliers. Which of the following is not a way FreshDirect helps suppliers in exchange for supplier agreement to offer it better pricing terms? a. FreshDirect carries a greater selection of supplier products b. FreshDirect will cobrand products from suppliers c. FreshDirect pays suppliers faster than rivals d. FreshDirect shares warehouse space with farmers and livestock producers e. FreshDirect shares data on customer insights with suppliers

d

1. Staying power refers to the: a. relative abilities of parties in a situation to exert influence over each other. b. energy demands required to run a product or service. c. ability of a firm to produce a good or service at a lower opportunity cost than a rival. d. long-term viability of a product or service. e. ability to take advantage of complementary products developed for a prior generation of technology.

d

1. Tech impact is reaching even beyond the confines of Earth itself. According to an example in yoru chapter, how was a tool on the International Space Station recently acquired?: a. It was purchased via China's Alibaba - showing global sourcing extends to the extraterrestrial. b. It was delivered to the launch site when summoned from Space using the FedEx app. c. It was an out-of-print product that an Etsy producer was able to craft and deliver for the next resupply flight. d. It was printed on-demand using 3D printing technology.

d

1. The degree to which complete information is available is known as _____. a. information assurance b. data proximity c. operational alertness d. price transparency e. data consolidation

d

1. The long tail is a phenomenon whereby firms can make money by: a. selling the same product at different prices with only minor tweaks in their design. b. leveraging customers to promote their products or services. c. reselling multiple versions of a single product under different brand names. d. offering a selection of products or services vastly greater than conventional retailers. e. sell the same product to virtually every customer the Internet can reach.

d

1. The patent system is often considered to be unfairly stacked against start-ups because: a. bigger multinational firms enjoy patent protection in all countries as opposed to start-ups, 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.

d

1. 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.

d

1. Which of the following factors represents one of the sources of value derived from network effects? a. Congestion b. Price transparency c. Information symmetry d. Staying power e. Complementary costs

d

1. Which of the following is an example of a measure taken by a firm to encourage the development of complementary goods? a. Adobe giving away the Acrobat Reader for free b. Microsoft bundling new products into Windows, Internet Explorer browser, and other offerings c. The Twitter Fail Whale d. Apple offering a regular conference and online materials for its software developers, and an online app store where they can sell their products. e. Nintendo's Wii games targeted at families, women, and older age groups

d

1. Which of the following is not highlighted as a source of switching costs? a. Learning costs b. Information and data c. Search costs d. Viral marketing e. Loyalty programs

d

1. Which of the following is one of Porter's five forces? a. Availability of coopetitors in the market b. Total cost of ownership c. Purchasing power parity of consumers d. Threat of new entrants e. Strength of intellectual property laws

d

1. Which of the following is true about the Netflix streaming business? a. Its marginal cost for title acquisition is zero as it is currently focusing on distributing digital content. b. It has the support of major studios such as Fox and Warner that have allowed it to stream any content the firm buys on DVD. c. Its cost of acquiring streaming content has fallen in the recent past due to its long tail advantages. d. It has attempted to counter rivals with exclusive content by securing exclusive streaming rights for several popular shows. e. From the beginning it has experimented with various streaming revenue models, including pay-per-view, download-to-own, and ad-supported content.

d

1. Which of the following is true of Netflix streaming? a. Its content acquisition cost is fixed. b. Its competitors have been mostly vanquished. c. It has little appeal for new entrants. d. Content providers enjoy greater bargaining power as the sole source for unique titles unavailable from any other source. e. It provides very little opportunity for innovation. f. None of the above

d

1. 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.

d

1. Windows OS, the iPhone, the Wii, and Facebook's application programming interfaces allow for the development and integration of complementary goods by third parties. Based on this evidence, all these products or services are said to be _____. a. pure plays b. coopetitors c. adaptors d. platforms e. venture capitalists

d

1. Worldwide auction leader eBay started operations in Japan just five months after Yahoo! launched its Japanese auction service. But eBay was never able to mount a credible threat and ended up pulling out of the market. This example shows that: a. online auction markets are characterized by constant shifts in market dominance. b. market dominance in the global marketplace translates to an equivalent position in national markets. c. national markets tend to be influenced by factors that are not necessarily localized. d. it's imperative to move first in markets influenced by network effects. e. firms should always subsidize initial adoption of their products and make them cheaper than their competitor's products.

d

1. You are at a packed stadium for the big game and you want to upload a photo of your team's touchdown using Instagram. Your mobile phone shows five bars of service, but you still can't access the Internet. This is likely an example of ______. a) The Osborne Effect b) Envelopment c) Network effects d) Congestion effects

d

1. _____ 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

d

Sometimes technology can sound geeky and so technical that executives might think that it doesn't require managerial or investor attention. However many investing in the telecom sector suffered from a lack of insight on how a key technology was impacting their industry. Telecom firms failed to anticipate the impact of a technology known as ____________, which enabled existing fiber to carry more transmissions than ever before. a. radio frequency identification (RFID) b. dense wave division multiplexing (DWDM) c. cloud computing d. open source software

d

1. A manager's decision making is often shaped by its perception of the competition. Which of the following does Netflix see as being in competition with the firm? a. Video games b. Magazines c. DVD watching d. Amazon Prime e. All of the above

e

1. 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.

e

1. Costs that do not vary according to production volume are called _____. a. total costs b. marginal costs c. switching costs d. variable costs e. fixed costs

e

1. 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

e

1. Internet retailers serve a larger geographic area with comparably smaller infrastructure and staff. This fact suggests that Internet businesses are more _____. a. churn-prone b. asymptotic c. capitalized d. vertically integrated e. scalable

e

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

e

1. Metcalfe's Law is also known as: a. systemic events. b. cluster effects. c. group impressions. d. herd instincts. e. network externalities.

e

1. Microsoft's Live Maps and Virtual Earth 3D was a late entrant to the Internet mapping game. Users had already put in countless hours building resources that meshed with Google Maps and Google Earth. However, by adopting the same keyhole markup language (KML) standard used by Google, any work done by users for Google in KML could be used by Microsoft. What strategy of Microsoft has allowed it to catch up with Google? a. Making a new market a subset of its main offering b. Taking advantage of complementary products developed for a prior generation of technology c. Entering an uncontested, low-profit market instead of competing in saturated, high-profit markets d. Exchanging technical expertise in one area with another firm to effectively suit resource capabilities e. Making a new product compatible with the leading standard

e

1. Netflix offered its subscribers a selection of over one hundred thousand DVD-by-mail titles, while other video rental firms can only offer as much as three thousand. This presents a significant _____ for Netflix over its rivals. a. marginal cost b. price advantage c. variable cost d. studio preference e. scale advantage

e

1. 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.

e

1. Small chip-based tags that wirelessly emit a unique identifying code for the item that they are attached to are called _____. a. Personal Digital Assistants b. Smart adaptors c. Trackbacks d. Legacy labels e. RFID tags

e

1. 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

e

1. 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

e

1. Two distinctly separate markets are said to undergo convergence when they: a. are dominated by a small group of powerful sellers. b. derive most of their value from two distinct categories of participants. c. offer products and services designed to target a specific industry. d. are characterized by many buyers, but a single, dominant seller. e. begin to offer similar features and capabilities.

e

1. What solution has Netflix come up with to address the need to deliver content to customers' televisions? a. Netflix has entered into a revenue sharing agreement with Apple to produce customized set top boxes. b. Netflix makes custom chips for television makers so they can offer Netflix in a way that replicates Google Chromecast and Amazon FireTV. c. Netflix launched a self-branded hardware division to build and market its own set top boxes. d. Netflix has acquired Vudu, a firm that specializes in the online streaming business. e. Netflix provides tools to firms seeking to build Netflix access into their devices.

e

1. 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.

e

1. Choose the correct answer: Why is the "First-Sale Doctrine," including understanding when it does and doesn't apply, relevant to Netflix? a. It means content acquisition costs for DVDs are more predictable than streaming costs. b. It means that content acquisition costs for streaming are more predictable than DVDs. c. In cases of streaming media, it facilitates a shift of bargaining power to content suppliers. d. In cases of streaming media, it facilitates a shift of bargaining power to firms paying to license content from suppliers. e. None of the above. f. a & d g. b & c h. a & c i. b & d

h

1. Another reason fueling the boom in fast-growing technology services is ___________________, which, when done right, can virally spread awareness of a firm with nary a dime of conventional ad spending

social media