Chapter 2, Strategic Use of Information
Multiple Choice
1. Which “era” of information resources focused primarily on effectiveness such solving problems and creating opportunities?
a) 1960s
b) 1970s
c) 1980s
d) 1990s
e) 2000+
Ans: b (Medium)
Response: See page 2-3
2. An IS infrastructure is an IT?
a) Design
b) Expenditure
c) System
d) Asset
e) Liability
Ans: d (Medium)
Response: See page 2-4
3. Salesforce.com is considered to be which type of “Internet” based technology?
a) Web 1.0
b) XML Based
c) Web 2.0
d) Java
e) WebClient
Ans: c (Medium)
Response: See page 2-5
4. This term, ______, is defined as the available data, technology, people, and processes within an organization to be used by the manager to perform business processes and tasks
a) information resources
b) information technology
c) information systems
d) system technology
e) organization resources
Ans: a (Easy)
Response: See page 2-4
5. This is an approach that improves the way a company finds raw components it needs to make a product or service, manufactures that product or service, and delivers it to customers.
a) Customer Relationship Management
b) Supply Chain Management
c) Production Supply Management
d) Strategic Alliance Management
e) Value Chain Management
Ans: b (Easy)
Response: See page 2-21
6. This is a strategy whereby companies cooperate and compete at the same time with companies in its value net.
a) Co-operation
b) Competition
c) Pre-Competition
d) Collab-otition
e) Co-opetition
Ans: e (Medium)
Response: See page 2-30
7. This “risk” can arise when a company seeks to use its Information Resources to gain competitive advantage and their competitors are forced to enter the market and offer the same or better resources due to deep pockets.
a) Demonstrating bad timing
b) Awakening a sleeping giant
c) Delivering a strategic coup
d) Nudging a competitor
e) Equal access competition
Ans: b (Medium)
Response: See page 2-31
8. Which one of the following risks may result in litigation against an organization?
a) Demonstrating bad timing
b) Awakening a sleeping giant
c) Delivering a strategic coup
d) Running afoul of the law
e) Equal access competition
Ans: d (Medium)
Response: See page 2-33
9. If a company were to release a new technology, when its customers were not ready to use this new technology, would be which type of risk?
a) Demonstrating bad timing
b) Awakening a sleeping giant
c) Delivering a strategic coup
d) Running afoul of the law
e) Equal access competition
Ans: a (Medium)
Response: See page 2-32
10. Which Era of information usage in organizations included a knowledge driven information model?
a) 1960s
b) 1970s
c) 1980s
d) 1990s
e) 2000+
Ans: e (Medium)
Response: See page 2-4
11. Which Era of information usage in organizations was marked by ROI, and Mainframe systems?
a) 1960s
b) 1970s
c) 1980s
d) 1990s
e) 2000+
Ans: a (Medium)
Response: See page 2-4
12. Which Era of information usage in organizations was user driven, and strategic?
a) 1960s
b) 1970s
c) 1980s
d) 1990s
e) 2000+
Ans: c (Medium)
Response: See page 2-4
13. This risk of using information resources, must be carefully considered by managers due to the wide spread use of the Internet?
a) Demonstrating bad timing
b) Awakening a sleeping giant
c) Delivering a strategic coup
d) Web-based alternative removes advantages
e) Equal access competition
Ans: d (Easy)
Response: See page 2-32
14. Companies offer services to their customers that either “lock” them in to the company for these services or make it difficult or costly to switch to another company.
a) Bargaining power of suppliers
b) Threat of substitute products
c) Potential threat of new entrants
d) Bargaining power of buyers
e) Industry competitors
Ans: a (Medium)
Response: See page 2-12
15. eBay has offered a new services to help its customers build their own website. Which competitive force does this specifically address?
a) Bargaining power of suppliers
b) Threat of substitute products
c) Potential threat of new entrants
d) Bargaining power of buyers
e) Industry competitors
Ans: b (Medium)
Response: See page 2-12
16. A company that is in a very competitive market is experiencing which one of Porter's Five Competitive Forces?
a) Bargaining power of suppliers
b) Threat of substitute products
c) Potential threat of new entrants
d) Bargaining power of buyers
e) Industry competitors
Ans: d (Medium)
Response: See page 2-12
17. A company that is in a market with few buying options for the consumer is experiencing which one of Porter's Five Competitive Forces?
a) Bargaining power of suppliers
b) Threat of substitute products
c) Potential threat of new entrants
d) Bargaining power of buyers
e) Industry competitors
Ans: a (Medium)
Response: See page 2-12
18. Which one of Porter's Five Competitive Forces would a company, that is in a market with lots of options that the consumer can engage in, create switching costs to keep customers from using a competitor?
a) Bargaining power of suppliers
b) Threat of substitute products
c) Potential threat of new entrants
d) Bargaining power of buyers
e) Industry competitors
Ans: d (Medium)
Response: See page 2-12
19. The Resource-Based View is useful in determining whether a firm’s strategy has created value. Unlike Porter’s competitive forces framework, this view maintains that competitive advantage comes from the ______and other resources of the firm.
a) data
b) technology
c) information
d) systems
e) people
Ans: c (Medium)
Response: See page 2-23
20. Which one of the following is not considered to be a support activity of the value chain of a firm?
a) Human Resources
b) Service
c) Purchasing
d) Technology
e) Organization
Ans: b (Medium)
Response: See page 2-17
21. Which one of the following is not considered to be a primary activity of the value chain of a firm?
a) Marketing
b) Sales
c) Services
d) Operations
e) Organization
Ans: e (Medium)
Response: See page 2-17
22. What is a collection of a firm’s value chains called?
a) Value network
b) Value chain environment
c) Value system
d) Chain network
e) Organization chain
Ans: c (Medium)
Response: See page 2-18
23. ______is an approach that improves the way a company finds raw components it needs to make a product or service, manufacture that product or service, and delivers it to customers.
a) Resource Based Allocation
b) Supply Chain Management
c) Operations Management
d) Supply Resource Management
e) Customer Relationship Management
Ans: b (Medium)
Response: See page 2-21
24. If an airline were to partner with a hotel chain to offer online packages to consumers, this would be creating what type of partnership?
a) Vendor Collaboration
b) Co-opetition
c) Strategic Co-opetition
d) Strategic Alliance
e) Industry Alliance
Ans: d (Medium)
Response: See page 2-29
25. Which part of the value chain includes order processing and shipping?
a) Inbound Logistics
b) Outbound Logistics
c) Operations
d) Service
e) Organization
Ans: b (Medium)
Response: See page 2-17
26. This is an inter-organizational relationship that affords one or more companies in the relationship a strategic advantage.
a) CRM
b) SCM
c) Organizational Partnership
d) Strategic Partnership
e) Strategic Alliance
Ans: e (Medium)
Response: See page 2-29
27. Which "view" has been applied in the area of Information Systems to help identify two subsets of information resources: those that enable a firm to attain competitive advantage and those that enable a firm to sustain the advantage over the long-term?
a) Resource-Based View
b) Information-System View
c) Information-Resource View
d) System-Based View
e) Organization View
Ans: a (Medium)
Response: See page 2-23
28. If two airlines decided to work together on creating a reservation system to help create a competitive advantage would be practicing this strategy?
a) Competition
b) Co-opetition
c) Collaboration
d) Strategic Alliance
e) Supply Chain Alliance
Ans: b (Medium)
Response: See page 2-30
29. A local bank decided to roll out self-service safety deposit box service. At first, customers appeared interested in the new service but over time the bank discovered that the service was too advanced for its particular customer base. Which risk is the bank experiencing?
a) Awakening a sleeping giant
b) Implementing IS poorly
c) Demonstrating bad timing
d) Customer lack of interest
e) Failing to deliver customer needs
Ans: c (Hard)
Response: See page 2-32
30. A utility company fits into which one of Porter's Five Forces model?
a) Bargaining power of suppliers
b) Threat of substitute products
c) Potential threat of new entrants
d) Bargaining power of buyers
e) Industry competitors
Ans: a (Hard)
Response: See page 2-11
True/False
31. A Web 2.0 technology is a newer Internet based technology that provides more interaction and participation among the users..
Ans: True (Medium)
Response: See page 2.5
32. Network externalities offer a reason for value derived from plentitude.
Ans: True (Medium)
Response: See page 2-7
33. A firm that uses threat of backward integration is using the "bargaining power of buyers" for strategic advantage.
Ans: False (Medium)
Response: See page 2-12
34. A grocery store chain recently rolled out a customer loyalty program that sends the customer a $5 coupon towards their next purchase for every $250 they spend at the store. This is an example of strategic use of bargaining power of suppliers
Ans: False (Hard)
Response: See page 2-12
35. Co-opetition is a strategy where companies agree to work together and compete at the same time.
Ans: True (Easy)
Response: See page 2-30
Short Answer
36. Which ONE of Porter's Five Forces Model uses buyer selection, switching costs, and differentiation?
Ans: Bargaining power of buyers
Response: See page 2-12
37. List the four support activities of the value chain.
Ans: Organization, Human Resources, Technology, Purchasing
Response: See page 2-17
38. This is an approach that improves the way a company finds raw materials it needs to make a product or service.
Ans: Supply Chain Management
Response: See page 2-21
39. Which Era of information usage in organizations was characterized by client server “distribution intelligence” as the dominate technology?
Ans: Era III, 1980s
Response: See page 2-3
40. A small retail store begins to offer a new innovative service through its web site to gain competitive advantage. What risk is the store potentially in danger of?
Ans: Awakening a sleeping giant
Response: See page 2-31
Essay
41. Compare and contrast the five competitive forces of Porter's Five Forces Model.
42. Provide 2 examples of types of companies that are in a market where threat of substitute products is high. What could these companies do to help minimize this threat?
43. Explain how co-opetition can be used effectively in a particular market segment? Provide an example.
44. How is supply chain management used to gain competitive strategic advantage?
45. How is the Resource-Based View useful in determining whether a firm’s strategy has created value?