IS Management: Chapter 3

True or False: 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.

True

True or False: 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.

True

True or False: 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.

True

True or False: Product differentiation is one of the four basic competitive strategies

True

True or False: The effect of the Internet has been to increase a company's bargaining power vis-à-vis its suppliers

True

True or False: The internet has intensified competitive rivalry.

True

True or False: The power of customers is one of the competitive forces that affect an organization's ability to compete.

True

True or False: When the output of some units can be used as inputs to other units, synergies develop, which can lower cost and generate profits.

True

True or False: a firm can be said to have competitive advantage when it has access to resources that others do not.

True

True or False: the value chain model classifies all company activities as either primary or support.

True

Which of the following illustrates the use of information systems to strengthen customer and supplier intimacy? a. A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules b. A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy c. An airline's use of information systems to analyze detailed data on customers to determine each customer's profitability d. A grocery store chain's use of information systems to produce products and services at a lower price than competitors e. A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers

a. A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules

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 enabling companies to develop customer intimacy d. By encouraging the entry of new competitors e. By enforcing standards that reduce the differences between competitors

a. By building industry-wide, IT-supported consortia and symposia

According to the chapter case, the Nike+ ecosystem is part of which of the following larger phenomena? a. The Internet of Things b. 3-D printing c. TQM d. CAD e. BPR

a. The Internet of Things

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. An airline's use of information systems to analyze detailed data on customers to determine each customer's profitability c. A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers d. A grocery store chain's use of information systems to produce products and services at a lower price than competitors e. A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules

a. a hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy

Which of the following illustrates the use of information systems to achieve product differentiation? a. A shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers b. A PC manufacturer's use of information systems to facilitate direct access from suppliers to production schedules c. A hot tub dealer's use of information systems to determine which models and options its customers are most likely to buy 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

a. a shoe manufacturer's use of information systems in selling custom, made-to-order shoes directly to customers

Benchmarking: a. compares the efficiency and effectiveness of your business processes against strict standards. b. allows industry participants to develop industry-wide standards. c. synchronizes the business processes of customers, suppliers, and trading partners. d. is used to measure the speed and responsiveness of information technology. 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

Which of the following statements about network economics is not true? a. In network economics, the marginal cost of adding new members to the network is higher than the marginal gain. b. eBay is an example of a business model that is based on the principle of network economics. c. From a network economics perspective, the value of a community of people grows as the number of participants in the community increases. d. The law of diminishing returns does not always apply to every situation. e. Information technology can be strategically useful from a network economics perspective

a. in network economics, the marginal cost of adding new members to the network is higher than the marginal gain

In network economics, the value of a commercial software vendor's software products: a. increases as more people use them. b. increases due to higher marginal gain in output. c. decreases according to the law of diminishing returns. d. decreases as more people use them. e. is unrelated to the number of people that use them.

a. increases as more people use them

All of the following have been disruptive technologies except: a. minicomputers b. the iPod c. the PageRank algorithm d. the automobile e. the flash drive

a. minicomputers

Which of the following is pursuing a transnational strategy? a. Intel Corporation b. Nestle c. Caterpillar Corporation d. Starbucks e. Ford Motor, Co.

b. Nestle

In a ________ system configuration, separate information systems are designed and managed by each foreign unit. a. centralized b. decentalized c. duplicated d. networked e. virtual

b. decentralized

________ systems are those in which development occurs at the home base, but operations are handed over to autonomous units in foreign locations. a. virtual b. duplicated c. transnational d. decentralized e. networked

b. duplicated

________ typically develop a single information system, usually at the home base, and then replicate it around the world. a. transnational firms b. franchisers c. multinational firms d. virtual companies e. domestic exporters

b. franchisers

The value chain model: a. categorizes five related advantages for adding value to a firm's products or services. b. helps a firm identify points at which information technology can most effectively enhance its competitive position. c. focuses primarily on collaboration with suppliers. d. sees the supply chain as the primary activity for adding value. e. categorizes four basic strategies a firm can use to enhance its value chain

b. 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. tailoring products to the client. b. intensive customer data analysis. c. intensive product trend analysis. d. tightening linkages with suppliers. e. complex trend forecasting.

b. intensive customer data analysis

A virtual company: a. uses Internet technology to maintain a networked community of users. b. is also known as a virtual organization. c. uses Internet technology to maintain a virtual storefront. d. provides entirely Internet-driven services, or virtual products. e. is an example of the law of diminishing returns

b. is also known as a virtual organization

Internet technology: a. has lessened competitive rivalries. b. makes it easy for rivals to compete on price alone. c. imposes a significant cost of entry, due to infrastructure requirements. d. increases the difference between competitors because of the wide availability of information. e. makes it easy to sustain operational advantages.

b. makes it easy for rivals to compete on price alone

When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a ________ strategy. a. market transparency b. market niche c. mass customization d. product differentiation e. process efficiency

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. virtual company b. multinational c. franchise d. domestic exporter e. transnational

b. multinational

Which of the following is not a true statement about value webs?a. Value webs are more customer-driven than traditional value chains. b. Value webs are inflexible and cannot adapt quickly to changes in supply and demand. c. Value webs involve a collection of independent firms that use information technology to coordinate their value chains. d. Value webs operate in a less linear fashion than traditional value chains.. e. Value webs involve highly synchronized industry value chains

b. 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. value webs c. best practices d. best processes e. benchmarks

c. best practices

Caterpillar Corporation is example of which of the following? a. Transnational b. franchiser c. domestic exporter d. multinational e. virtual company

c. domestic exporter

An information system can enhance core competencies by: a. synchronizing the value chains of business partners with an industry. b. providing better reporting facilities. c. encouraging the sharing of knowledge across business units. d. allowing operational employees to interact with management. e. creating educational opportunities for management.

c. encouraging the sharing of knowledge across business units

Which of the following is not one of the competitive forces in Porter's model? a. other competitors b. technology c. external environment d. suppliers e. customers

c. external environment

A manufacturer of deep-sea oil rigs may be least concerned about which of these marketplace forces? a. substitute products b. product differentiation c. new market entrants d. low number of suppliers e. traditional competitors

c. new market entrants

The supportive activities of a firm include: a. sales and marketing, procurement, human resources, and technology. b. inbound logistics, organization infrastructure, outbound logistics, technology, and procurement. c. organization infrastructure, human resources, technology, and procurement. d. inbound logistics, technology, outbound logistics, sales and marketing, and service. e. organization infrastructure, human resources, sales and marketing, and technology.

c. organization infrastructure, human resources, technology and prodcurement

Walmart's continuous replenishment system allows it to do all of the following except: a. transmit orders to restock directly to its suppliers. b. fine-tune merchandise availability. c. provide mass customization. d. better meet customer demands. e. keep costs low.

c. provide mass customization

Which of the following industries has the lowest barrier to entry? a. airline b. computer chip c. small retailer d. solar energy e. automotive

c. small retailer

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. consortia b. value chain c. value web d. business network 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. low-cost leadership b. focus on market niche c. strengthen customer and supplier intimacy d. compete on employee loyalty e. differentiate products

d. compete on employee loyalty

All of the following could be considered substitute products for industrial electricity generation except: a. solar b. coal c. hydro-power d. ethanol e. wind

d. ethanol

All of the following are considered primary activities of a firm except: a. service b. sales and marketing c. outbound logistics d. procurement e. inbound logistics

d. procurement

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 can often hire younger, less expensive workers. d. They can establish new relationships with suppliers. e. They are more highly motivated.

d. they can establish new relationships with suppliers

The emergence of software as a web service has acted as a disruptive technology for: a. local internet service providers b. PC manufacturers c. traditional key-word search engines d. traditional boxed software companies e. telecommunications providers

d. traditional boxed software companies

Which of the following can force a business and its competitors to compete on price alone? a. demand control b. multiple competing suppliers c. high product differentiation d. transparent marketplace e. poor process efficiency

d. transparent marketplace

________ is the ability to offer individually tailored products or services using the same production resources as bulk production. a. CAD b. Personalization c. Size customization d. Demand customization e. Mass customization

e. Mass customization

A firm that locates all systems development and operations at its headquarters is using a ________ system configuration. a. decentralized b. unilateral c. networked d. virtual e. centralized

e. centralized

The ________ strategy is characterized by heavy centralization of corporate activities in the home country of origin. a. virtual company b. franchise c. multinational d. transnational e. domestic exporter

e. domestic exporter

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. provide services at a lower price than its competitors b. strengthen customer intimacy c. differentiate their service d. increase efficiency e. focus on market niche

e. focus on market niche

The Internet raises the bargaining power of customers most effectively by: a. creating new opportunities for building loyal customer bases. b. lowering transaction costs. c. making more products available. d. reducing barriers to entry. e. making information available to everyone

e. making information available to everyone

A firm can exercise greater control over its suppliers by having: a. fewer suppliers. b. only a single supplier. c. global suppliers. d. local suppliers. e. more suppliers.

e. more suppliers

To what competitive force did the printed encyclopedia industry succumb? a. increased bargaining power of suppliers b. increased bargaining power of customers c. low cost of entry d. positioning and rivalry among competitors e. substitute products or services

e. substitute products or services

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 chains b. value webs c. benchmarks d. core competencies e. synergies

e. synergies

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. virtual economics b. the point of no return c. supply and demand d. inelasticity e. the law of diminishing returns

e. the law of diminishing returns

True or False: In a transparent marketplace, there is high product differentiation.

False

True or False: Strong linkages to customers and suppliers decrease switching costs

False

True or False: Studies show that less than one-quarter of a business firm's profits can be explained by alignment of IT with business.

False

True or False: The activities that measure the performance of your business processes against strict standards are called best practices.

False

True or False: The inventors of a disruptive technology typically benefit the most from the technology; and it is rare that fast followers catch up quickly

False