Chapter 3 - True/False

The competitive forces model was created for today's digital firm.

False, controls future firms as well

A transparent marketplace means that there is high product differentiation.

False, there is little product differentiation.

A firm can be said to have competitive advantage when they have higher stock market valuations than their competitors.

True

All organizations have bedrock, unassailable assumptions that define their goals and products.

True

Customers are one of the competitive forces that affect an organization's ability to compete.

True

In a demonstration of network economics, the more people that use Adobe software and related products, the greater the value of the software.

True

Mass customization is a form of mass production.

True

Research has shown that only 25% of firms are able to align their information technology with their business goals.

True

The effect of the Internet has been to raise bargaining power over suppliers.

True

The idea driving synergies is that when the output of some units can be used as inputs to other units, the relationship can lower cost and generate profits.

True

The use of Internet technologies allows companies to more easily sustain competitive advantage.

False, competitive advantage is not always sustainable.

From the point of view of economics, information systems technology can be viewed as a factor of production that can be substituted for traditional capital and labor.

True

In the strategy of product differentiation, information systems are used to enable new products and services.

True

In the value chain model, primary activities are most directly related to the production and distribution of the firm's products and services that create value for the customer.

True

An adhocracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals.

False, Adhocracy is a task force organization that responds to changing environments.

The term business ecosystem describes the interplay between the various organizational forces within a firm.

False, another term for loosely coupled but interdependent network of suppliers.

In an efficient customer response system, digital answering systems are used to monitor and respond to customer inquiries.

False, directly links consumer behavior to distribution

Strong linkages to customers and suppliers decrease switching costs.

False, strong linkages increase switching costs

In the age of the Internet, Porter's traditional competitive forces model is still at work, but competitive rivalry has become much more intense.

True

The value chain model classifies all company activities as either primary or support.

True