The emergence, for Amazon.com, of new competitors in the sphere of online shopping illustrates what disadvantage posed by the use of information systems to achieve competitive advantage?

The emergence, for Amazon.com, of new competitors in the sphere of online shopping illustrates what disadvantage posed by the use of information systems to achieve competitive advantage?

a. Law of diminishing returns
b. Internet technologies are universal, and therefore usable by all companies.
c. Internet shopping produces cost transparency.
d. The Internet enables the production or sales of substitute products or services.

Answer: B

Blockbuster's implementation of online movie rental is an example of using information technology to enhance which part of the value chain?

Blockbuster's implementation of online movie rental is an example of using information technology to enhance which part of the value chain?

a. Inbound logistics
b. Operations
c. Sales and marketing
d. Procurement

Answer: C

Which competitive force best categorizes the threat Netflix posed to Blockbuster?

Which competitive force best categorizes the threat Netflix posed to Blockbuster?

a. Rivalry among traditional competitors
b. Threat of new market entrants
c. Substitute products and services
d. Bargaining power of customers

Answer: C

Blockbuster's move to include online movie rental as a part of its services illustrates the use of information systems for:

Blockbuster's move to include online movie rental as a part of its services illustrates the use of information systems for:

a. competitive advantage.
b. survival.
c. new products and services.
d. customer intimacy.

Answer: B

According to Leavitt's model of organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are:

According to Leavitt's model of organizational resistance, the four components that must be changed in an organization in order to successfully implement a new information system are:

a. environment, organization, structure, tasks.
b. technology, people, culture, and structure.
c. organization, culture, management.
d. tasks, technology, people, and structure.

Answer: D

A virtual company:

A virtual company:

a. uses the capabilities of other companies without being physically tied to those companies.
b. uses Internet technology to maintain a virtual storefront.
c. uses Internet technology to maintain a networked community of users.
d. provides entirely Internet-driven services, or virtual products

Answer: A

In network economics, the value of a commercial software vendor's software products:

In network economics, the value of a commercial software vendor's software products:

a. increases as more people use them.
b. decreases as more people use them.
c. increases due to higher marginal gain in output.
d. decreases according to the law of diminishing returns

Answer: A

Network economics:

Network economics:

a. applies the law of diminishing returns to communities of users.
b. applies traditional economics to networked users.
c. sees the cost of adding new members as inconsequential.
d. balances the high cost of adding new members to a community against the lower cost of using network infrastructure.

Answer: C

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. This is referred to as:

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. This is referred to as:

a. the point of no return.
b. the law of diminishing returns.
c. supply and demand.
d. network inelasticity.

Answer: B

An example of synergy in business is:

An example of synergy in business is:

a. Amazon's use of the Internet to sell books.
b. JP Morgan Chase's merger with Bank One Corporation, which provided JP Morgan with a network of retail branches in new regions.
c. Blockbuster combining traditional video rental with online video rental.
d. Wal-Mart's order entry and inventory management system to coordinate with suppliers

Answer: B

An information system can enhance core competencies by:

An information system can enhance core competencies by:

a. providing better reporting facilities.
b. creating educational opportunities for management.
c. allowing operational employees to interact with management.
d. encouraging the sharing of knowledge across business units.

Answer: D

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 it is often referred to as creating:

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 it is often referred to as creating:

a. a value web.
b. a value chain.
c. synergies.
d. core competencies.

Answer: C

How are information systems used at the industry level to achieve strategic advantage?

How are information systems used at the industry level to achieve strategic advantage?

a. Building industry-wide, IT-supported consortia and symposia
b. By raising the bargaining power of suppliers
c. By encouraging the entry of new competitors
d. By enforcing standards that reduce the differences between competitors

Answer: A

A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n):

A collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively is called a(n):

a. industry value chain.
b. business ecosystem.
c. value web.
d. consortia.

Answer: C

The most successful solutions or methods for achieving a business objective are called:

The most successful solutions or methods for achieving a business objective are called:

a. value activities.
b. best processes.
c. core competencies.
d. best practices

Answer: D

Benchmarking:

Benchmarking:

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

Answer: A

The secondary activities of a firm include:

The secondary activities of a firm include:

a. inbound logistics, technology, outbound logistics, sales and marketing, and service.
b. inbound logistics, organization infrastructure, outbound logistics, technology, and procurement.
c. organization infrastructure, human resources, sales and marketing, and technology.
d. organization infrastructure, human resources, technology, and procurement

Answer: D

The primary activities of a firm include:

The primary activities of a firm include:

a. inbound logistics, operations, outbound logistics, sales and marketing, and service.
b. inbound logistics, operations, outbound logistics, technology, and service.
c. procurement, inbound logistics, operations, technology, and outbound logistics.
d. procurement, operations, technology, sales and marketing, and services.

Answer: A

The value chain model:

The value chain model:

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

Answer: D

The Internet raises the bargaining power of customers by:

The Internet raises the bargaining power of customers by:

a. creating new opportunities for building loyal customer bases.
b. making more products available.
c. making information available to everyone.
d. lowering transaction costs.

Answer: C

Internet technology:

Internet technology:

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

Answer: A

To what competitive force did the printed encyclopedia industry succumb?

To what competitive force did the printed encyclopedia industry succumb?

a. Positioning and rivalry among competitors
b. Low cost of entry
c. Substitute products or services
d. Customer's bargaining power

Answer: C

Which industries did the first wave of e-commerce transform?

Which industries did the first wave of e-commerce transform?

a. Air travel, books, bill payments
b. Air travel, books, music
c. Real estate, air travel, books
d. Real estate, books, bill payments

Answer: B

Which of the four generic strategies to combat competitive forces did 7-Eleven implement?

Which of the four generic strategies to combat competitive forces did 7-Eleven implement?

a. Low cost leadership
b. Focus on market niche
c. Customer and supplier intimacy
d. Product differentiation

Answer: C

Which competitive force did 7-Eleven determine as being its primary disadvantage, based on your reading of the chapter case?

Which competitive force did 7-Eleven determine as being its primary disadvantage, based on your reading of the chapter case?

a. Traditional competitors
b. Substitute products and services
c. Customers
d. Suppliers

Answer: C

Which competitive force did 7-Eleven determine as being its primary disadvantage, based on your reading of the chapter case?

Which competitive force did 7-Eleven determine as being its primary disadvantage, based on your reading of the chapter case?

a. Traditional competitors
b. Substitute products and services
c. Customers
d. Suppliers

Answer: C

Hilton Hotels' use of customer information software to identify the most profitable customers to direct services to is an example of using information systems to:

Hilton Hotels' use of customer information software to identify the most profitable customers to direct services to is an example of using information systems to:

a. strengthen customer intimacy.
b. differentiate their service.
c. focus on market niche.
d. increase efficiency.

Answer: C

An information system can enable a company to focus on a market niche through:

An information system can enable a company to focus on a market niche through:

a. complex trend forecasting.
b. tailoring products to the client.
c. intensive product trend analysis.
d. intensive customer data analysis.

Answer: D

_____is the ability to offer individually tailored products or services using the same production resources as bulk production.

_____is the ability to offer individually tailored products or services using the same production resources as bulk production.

a. Mass customization
b. Size customization
c. Magnitude customization
d. Dimension customization

Answer: A

When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a:

When a firm provides a specialized product or service for a narrow target market better than competitors, they are using a:

a. product differentiation strategy.
b. market niche strategy.
c. mass customization strategy.
d. process efficiency strategy.

Answer: B

Wal-Mart's continuous replenishment system allows it to:

Wal-Mart's continuous replenishment system allows it to:

a. provide mass customization.
b. provide an efficient customer response system.
c. strengthen customer intimacy.
d. achieve economy of scale.

Answer: B

A firm can exercise greater control over its suppliers by having:

A firm can exercise greater control over its suppliers by having:

a. more suppliers.
b. fewer suppliers.
c. global suppliers.
d. local suppliers.

Answer: A

Which of the following industries has a low barrier to entry?

Which of the following industries has a low barrier to entry?

a. Automotive
b. Computer chip
c. Restaurant
d. Airline

Answer: C

A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force.

A manufacturer of deep-sea oil rigs may be least concerned about this marketplace force.

a. Product differentiation
b. Traditional competitors
c. Low number of suppliers
d. New market entrants

Answer: D

A substitute product of most concern for a cable TV distributor is:

A substitute product of most concern for a cable TV distributor is:

a. satellite TV.
b. broadcast TV.
c. satellite radio.
d. Internet.

Answer: A

Which of the following is not one of the competitive forces?

Which of the following is not one of the competitive forces?

a. Suppliers
b. Other competitors
c. External environment
d. Customers

Answer: C

The ______ model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete.

The ______ model is used to describe the interaction of external forces that affect an organization's strategy and ability to compete.

a. network economics
b. competitive forces
c. competitive advantage
d. demand control

Answer: B

You are consulting for a beverage distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step?

You are consulting for a beverage distributor who is interested in determining the benefits it could achieve from implementing new information systems. What will you advise as the first step? 

a. Identify the business ecosystem the distributor is in.
b. Implement a strategic transition to the new system.
c. Perform a strategic systems analysis.
d. Benchmark existing systems.

Answer: C

An organization is:

An organization is:

a. a stable, formal social structure that takes resources from the environment and processes them to produce outputs.
b. a formal, legal entity with internal rules and procedures that must abide by laws.
c. a collection of social elements.
d. all of the above.

Answer: D

The four major types of competitive strategy are:

The four major types of competitive strategy are:

a. low-cost leadership; substitute products and services; customers; and suppliers.
b. low-cost leadership; product differentiation; focus on market niche; and customer and supplier intimacy.
c. new market entrants; substitute products and services; customers; and suppliers.
d. low-cost leadership; new market entrants; product differentiation; and focus on market niche.

Answer: B

Amazon's use of the Internet as a platform to sell books illustrates a tactical use of information services for:

Amazon's use of the Internet as a platform to sell books illustrates a tactical use of information services for:

a. low-cost leadership.
b. product differentiation.
c. focusing on market niche.
d. strengthening customer intimacy

Answer: A

According to agency theory, the firm is viewed as a(n):

According to agency theory, the firm is viewed as a(n):

a. unified, profit-maximizing entity.
b. task force organization that must respond to rapidly changing environments.
c. entrepreneurial endeavor.
d. "Nexus of contracts" among self-interested individuals.

Answer: D

The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as:

The costs incurred when a firm buys on the marketplace what it cannot make itself are referred to as:

a. switching costs.
b. transaction costs.
c. procurement.
d. agency costs.

Answer: B

Mintzberg's classification of organizational structure categorizes the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals as a(n):

Mintzberg's classification of organizational structure categorizes the knowledge-based organization where goods and services depend on the expertise and knowledge of professionals as a(n):

a. entrepreneurial structure.
b. divisionalized bureaucracy.
c. professional bureaucracy.
d. adhocracy.

Answer: C

Business processes are collections of:

Business processes are collections of:

a. informal practices and behaviors.
b. formalized and documented practices.
c. routines.
d. rights and privileges.

Answer: C

According to the __________ definition of organizations, an organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment.

According to the __________ definition of organizations, an organization is seen as a means by which primary production factors are transformed into outputs consumed by the environment.

a. microeconomic
b. macroeconomic
c. sociotechnical
d. behavioral

Answer: A

How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm?

How does the technical view of organizations fall short of understanding the full impacts of information systems in a firm?

a. It sees information systems as a way to rearrange the inputs and outputs of the organization.
b. It sees capital and labor as primary production factors.
c. It sees the inputs and outputs, labor and capital, as being infinitely malleable.
d. It sees the organization as a social structure similar to a machine

Answer: C

What strategy to counter competitive forces does US Airways emphasize in the case study for this chapter?

What strategy to counter competitive forces does US Airways emphasize in the case study for this chapter?

a. Focus on market niche
b. Customer intimacy
c. Low-cost leadership
d. Product differentiation

Answer: C

What competitive force was the most dominant in preventing US Airways from success, as discussed in the chapter case?

What competitive force was the most dominant in preventing US Airways from success, as discussed in the chapter case?

a. Traditional competitors
b. New market entrants
c. Substitute products and services
d. Suppliers

Answer: A