Chapter 1, 2 & 3 (Week 1 Quiz)

The technology known as ______is helping to fuel the current age of fast-growth technology entrepreneurship. This technology means that a start-up can rent the computing resources one previously had to buy at great capital expense

cloud computing

A firm is said to be vertically integrated if?

it owns several layers in its value chain

In 2012 Inditex revenue was $______ and the 2015 revenue in Euros is _____

22.7 billion, 20.9 billion

Which of the following is one of the potential financial vulnerabilities that Zara could be exposed to? a) The cost of Zara products could rise in Spain and other European markets due to the resurgence of the dollar. b) The costs of maintaining a globally dispersed production model could curtail Zara's profit margins. c) The high costs of Zara products compared to other retail clothing manufacturers could turn customers away. d) Most of Zara's products are sold in non-European markets, which require lower prices and result in decreased profitability. e) A strong Euro means Zara's Spain-centric costs rise at higher rates compared to competitors

A strong Euro means Zara's Spain-centric costs rise at higher rates compared to competitors

One contributor to the easy with which young entrepreneurs can have success is low-cost distribution to massive markets worldwide. This is enabled by:

App stores

T or F: Zara's dominance in the fashion industry is due to its horizontally integrated structure accompanied by a globally dispersed production model

False

T or F: Zara's vertically integrated model is easier for rivals to copy compared to Dell's, as computing is more complex than clothing in terms of number of new models offered

False

T or F: According to Michael Porter, the reason many firms suffer margin-eroding competition is because they have defined themselves according to strategic positioning rather than operational effectiveness

False

T or F: Elaborate customer surveys help Zara designers predict fashion trends months into the future and design products accordingly

False

T or F: Firms are increasingly shifting spending from the Web to other media such as print, radio, and television as these are often easier to track and analyze

False

T or F: Maintaining large inventories is highly essential for the viability of the fashion industry

False

T or F: Social media and mobile phone use are lowering the corporate ethics and customer service bar for modern managers

False

T or F: The United States holds the number one ranking in home broadband access.

False

T or F: Zara's IT expenditure, measured by IT workers as a percentage of total employees, is only slightly higher than the industry average

False

How has technology changed the marketing landscape?

Firms can now use online channels to track and monitor consumer activities. The web can track customers, analyze campaign results and modify tactics. Because of this, firms have been shifting their spending from traditional media to the Web. Apps are now being used by firms to develop location-based messages and services and for cashless payment. Social media has become a huge factor in marketing because it allows firms to generate sales, improve their reputations and better serve their customers.

In two decades, ________'s tech sector has grown from "almost nothing" to a $73 billion industry, expanding even during the recent global recession

India

A(n)______is a transaction process that captures customer purchase information

Point-of-sale system

High-end fashion house Prada's experiment of implementing the latest technology in its flagship store failed because

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

TiVo was a high-flying firm, whose name was synonymous with digital video recording. Why has the firm struggled to achieve consistent profitability?

Rival devices offered by cable and satellite companies appear the same to consumers and are offered along with pay television subscriptions, which is a distribution channel to reach customers that TiVo has no control of.

The _____ is a piece of U.S. legislation that raises executive and board responsibility and ties criminal penalties to certain accounting and financial violations

Sarbanes-Oxley Act

_____ refers to performing different tasks than rivals or the same tasks in a different way

Strategic positioning

Which of the following statements about technology is true? a) Technology plays a marginal role in creating strategic differences b) Technology cannot be used by late entrants to gain a share of the industry c) Technological improvements are not important in strengthening a firm's strategic advantages d) Technology alone is enough to provide sustainable competitive advantage to a firm e) Technological improvements can be copied by rivals, leading to a profit-eroding arms race

Technological improvements can be copied by rivals, leading to a profit-eroding arms race

T or F: Linus Torvalds created the Linux operating system

True

T or F: Technology has proliferated in Kenya and Somaliland, with text messages used to replace cash, creating mobile money use that, on a population percentage basis, exceeds any nation in the West

True

T or F: The Fair Factories Clearinghouse is subject to network effects

True

T or F: The rise of open source software has lowered computing costs for start-up and blue chip companies worldwide.

True

T or F: Today's job seekers are writing résumés with keywords in mind, aware that the first cut is likely made by a database search program, not a human being

True

T or F: Zara has managed to reap profits in spite of limited production runs and rarely run sales

True

Given their 2015 revenue, should Zara make any changes as they expand to Asia and Mexico? Give a short explanation of why or why not.

Zara can squeeze more operating efficiencies while expanding the market and look at how information technology can help achieve that goal. They can also look for low-cost manufacturing options to maintain growth in net income if the business strategy incorporates region or country specific fashion relevant to the culture or season in certain areas. In addition, with manufacturing in Spain, management needs to expand to low cost geographies to reduce the risk of natural disasters because Asia specifically is prone to a lot of natural disasters such as floods and earthquakes.

How does Zara differ from its competitors in converting ideas into products?

Zara concepts appear in stores in fifteen days on average compared to rivals who receive new styles once or twice a season

A company uses WebEx, a popular commercial application, to conduct training sessions for its employees who are spread across different countries. This is an example of the impact of technology in the area of __

accounting, marketing, operations and human resources

The organizational activities that are required to produce goods or services are known as______

operations

The ______, also known as the Industry and Competitive Analysis, is a popular framework for examining a firm's competitive environment

porter model

An information system is an integrated solution that combines five components: hardware, software, data, ______and the people who interact with and are impacted by the system.

procedures

ROI is a term used to represent the

return on investment

__________________ has emerged as a catalyst for global change, with Facebook and Twitter playing key organizing roles in uprisings worldwide

social media

A firm's financial performance that consistently outperforms its industry's peers is known as _____.

sustainable competitive advantage

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?

system use drives store success and as much as 70 percent of salaries are tied to sales performance

Some of the radical changes brought about by new technologies include:

the creation of an unprecedented set of security and espionage threats

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

the practice of having limited production runs of its designs

The set of activities through which a product or service is created and delivered to customers is known as a(n) _____.

value chain