Chapter 1 MIS Fill in the Blank

Explain why competitive advantages are temporary.

A competitive advantage is a feature of a product or service on which customers place a greater value than they do on similar offerings from competitors. Competitive advantages provide the same product or service either at a lower price or with additional value that can fetch premium prices. Unfortunately, competitive advantages are typically temporary, because competitors often quickly seek ways to duplicate them. In turn, organizations must develop a strategy based on a new competitive advantage. Ways that companies duplicate competitive advantages include acquiring the new technology, copying business processes, and hiring away employees.

Porter has identified three generic business strategies including focused, broad cost leadership, and switching strategy.

FALSE Porter has identified three generic business strategies: 1) broad cost leadership, 2) broad differentiation, and 3) focused strategy.

Porter's Five Forces Model outlines the process for a sales strategy.

FALSE Porter's Five Forces Model analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry.

The chief technology officer is responsible for ensuring the security of business systems and developing strategies and safeguards against attacks from hackers and viruses.

FALSE The chief technology officer is responsible for ensuring the speed, accuracy, availability, and reliability for MIS.

Polaroid had a unique competitive advantage for many years until it forgot to observe competitive intelligence. The firm went bankrupt when people began taking digital pictures. Polaroid provides a great example of Porter's threat of new entrants.

FALSE This is an example of Porter's threat of substitute products or services.

Competitive intelligence is information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making.

FALSE This is the definition of business intelligence not competitive intelligence.

Tiffany & Company competes in the marketplace by offering high cost custom jewelry. Tiffany & Company is following a broad market and cost leadership strategy.

FALSE Tiffany & Company is following a focused market with high cost differentiation strategy.

Top managers use social intelligence to define the future of the business, analyzing markets, industries and economies to determine the strategic direction the company must follow to remain unprofitable.

FALSE Top managers use business intelligence, not social intelligence and profitable not unprofitable.

When a company is the first to market with a competitive advantage, it gains a particular benefit known as competitive intelligence.

FALSE When a company is the first to market with a competitive advantage, it gains a particular benefit known as a first-mover advantage.

A ____________ is the confirmation or validation of an event or object.

Fact

____________ is information that returns to its original transmitter and modifies the transmitter's actions.

Feedback

The __________ department tracks strategic financial issues including money, banking, credit, investments, and asset

Finance

Porter has identified three _________ business strategies for entering a new market: 1) broad cost leadership, 2) broad differentiation, and 3) focused strategy.

Generic

Rivalry among existing competitors is __________ when competition is fierce in a market and low when competitors are more complacent.

High

The threat of substitute products or services is _____ when there are many alternatives to a product or service and low when there are few alternatives from which to choose.

High

The __________ resources department maintains policies, plans, and procedures for a company.

Human

The core drivers of the information age are data, knowledge, business intelligence and __________

Information

Competitive __________ is the process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed.

Intelligence

Today's workers are commonly referred to as _____________ workers who use business intelligence along with personal experience to make decisions.

Knowledge

Explain systems thinking and how management information systems enable business communications.

A system is a collection of parts that link to achieve a common purpose. Systems thinking is a way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part. Feedback is information that returns to its original transmitter (input, transform, or output) and modifies the transmitter's actions. Feedback helps the system maintain stability. Management information systems (MIS) is a business function, like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision making and problem solving. MIS incorporates systems thinking to help companies operate cross-functionally. For example, to fulfill product orders, an MIS for sales moves a single customer order across all functional areas including sales, order fulfillment, shipping, billing, and finally customer service. Although different functional areas handle different parts of the sale, thanks to MIS, to the customer the sale is one continuous process.

Companies are organized by departments. The __________ department is responsible for maintaining records, measures, and reports monetary transactions.

Accounting

Apple utilized the first-mover ________ with its iPod product.

Advantage

A __________ strategy is a leadership plan that achieves a specific set of goals or objectives.

Business

The Chief Information Officer is responsible for overseeing all uses of MIS and ensuring that MIS strategically aligns with _________ goals and objectives.

Business

Top managers use __________ intelligence to define the future of the business, analyzing markets, industries, and economies.

Business

__________ power measures the ability of buyers to affect the price they must pay for an item.

Buyer

Identify the different departments in a company and why they must work together to achieve success.

Companies are typically organized by department or functional area such as accounting, finance, human resources, marketing, operations management, and sales. Although each department has its own focus and own data, none can work independently if the company is to operate as a whole. It is easy to see how a business decision made by one department can affect other departments. Functional areas are anything but independent in a business. In fact, functional areas are interdependent. Sales must rely on information from operations to understand inventory, place orders, calculate transportation costs, and gain insight into product availability based on production schedules. For an organization to succeed, every department or functional area must work together sharing common information and not be a "silo." Information technology can enable departments to more efficiently and effectively perform their business operations.

Business strategies that match _______ company competencies to opportunities result in a competitive advantage.

Core

Focused strategies concentrate on either cost leadership or __________.

Differentiation

Michael Porter identified pressures that can hurt potential sales. Knowledgeable customers can force __________ prices by pitting rivals against each other.

Down

A standardized set of activities that accomplish a specific task is called a supply chain component.

FALSE A standardized set of activities that accomplish a specific task is called a business process.

A variable is a business intelligence characteristic that stands for a value that cannot change over time.

FALSE A variable is a data characteristic that can change over time.

An overview of systems thinking includes input, process, output, and finances.

FALSE An overview of the systems thinking includes input, process, output, and feedback.

For an organization to succeed, every department or functional area must work independently to be most effective.

FALSE For an organization to succeed, every department or functional area must work together or interdependently sharing common information and not be a "silo".

Mark Peterson identified the Porter's Five Forces Model which analyzes the competitive forces within a business environment.

FALSE Michael Porter identified the Porter's Five Forces Model which analyzes the competitive forces within a business environment.

Over the past decade the United States has lost an estimated 2.4 million factory jobs to Nepal.

FALSE Over the past decade the United States has lost an estimated 2.4 million factory jobs to China.

Porter suggests adopting only __________ of the three generic strategies.

One

The __________ management department in a company manages the process of converting or transforming of resources into goods or services.

Operations

Compare Porter's three generic strategies.

Organizations typically follow one of Porter's three generic strategies when entering a new market: (1) broad cost leadership, (2) broad differentiation, (3) focused strategy. Broad strategies reach a large market segment. Focused strategies target a niche market. Focused strategies concentrate on either cost leadership or differentiation.

Describe Porter's Five Forces Model and explain each of the five forces.

Porter's Five Forces Model analyzes the competitive forces within the environment in which a company operates, to assess the potential for profitability in an industry. Buyer power is the ability of buyers to affect the price they must pay for an item. Supplier power is the suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services). Threat of substitute products or services is high when there are many alternatives to a product or service and low when there are few alternatives from which to choose. Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market. Rivalry among existing competitors is high when competition is fierce in a market and low when competition is more complacent.

__________ value activities found at the bottom of the value chain, these include business processes that acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services.

Primary

The Porter's Five Forces Model analyzes the competitive forces within the environment in which a company operates to assess the potential for __________ in an industry.

Profitability

The Chief Security Officer is responsible for ensuring the __________ of business systems and developing strategies and safeguards against attacks by hackers and viruses.

Security

The __________ chain consists of all parties involved, directly or indirectly, in obtaining raw materials or a product.

Supply

___________ value activities are found along the top of the value chain and include business processes, such as firm infrastructure, human resource management, technology development, and procurement that support the primary value activities.

Support

A __________ is a collection of parts that link to achieve a common purpose.

System

A leadership plan that achieves a specific set of goals or objectives is a business strategy.

TRUE

According to Porter's three generic strategies, Walmart is following a business strategy that focuses on 'broad market and low cost'.

TRUE

Buyer power is the ability of buyers to affect the price they must pay for an item.

TRUE

Companies today are successful when they combine the power of the information age with traditional business methods.

TRUE

Companies update business strategies continuously as internal and external environments change.

TRUE

MIS is a tool that is most valuable when it leverages the talents of people who know how to use and manage it effectively.

TRUE

Product differentiation occurs when a company develops unique differences in its products or services with the intent to influence demand.

TRUE

Successful companies today operate cross-functionally, integrating the operations of all departments.

TRUE

Supplier power is one of Porter's five forces and it measures the suppliers' ability to influence the prices they charge for supplies (including materials, labor, and services).

TRUE

Technology provides countless business opportunities, but can also lead to pitfalls and traps for a business.

TRUE

The information age is the present time, during which infinite quantities of facts are widely available to anyone who can use a computer.

TRUE

The value chain will group a company's activities into two categories: primary value activities and support value activities.

TRUE

There are many challenges to changing doctors, including transferring medical records and losing the doctor patient relationship along with the doctor's knowledge of the patient's history. Changing doctors provides a great example of switching costs.

TRUE

Two ways to reduce buyer power is through switching costs and loyalty programs.

TRUE

Value chain analysis views a firm as a series of business processes that each adds value to the product or service.

TRUE

With the Five Forces Model, companies should watch the forces in the market. If the forces are strong competition generally increases and if the forces are weak competition typically decreases.

TRUE

Demonstrate how a company can add value by using Porter's value chain analysis.

To identify competitive advantages, Michael Porter created value chain analysis, which views a firm as a series of business processes that each add value to the product or service. The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a cost advantage or product differentiation. The value chain groups a firm's activities into two categories—primary value activities and support value activities. Primary value activities acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services. Support value activities, along the top of the value chain in the figure, include firm infrastructure, human resource management, technology development, and procurement. Not surprisingly, these support the primary value activities.

A __________ chain analysis views a firm as a series of business processes that each adds value to the product or service.

Value

Describe the information age and the differences between data, information, business intelligence, and knowledge.

We live in the information age, when infinite quantities of facts are widely available to anyone who can use a computer. The core drivers of the information age include data, information, business intelligence, and knowledge. Data are raw facts that describe the characteristics of an event or object. Information is data converted into a meaningful and useful context. Business intelligence (BI) is information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making. Knowledge includes the skills, experience, and expertise, coupled with information and intelligence that creates a person's intellectual resources. As you move from data to knowledge you include more and more variables for analysis resulting in better, more precise support for decision making and problem solving.