1B

Question 1

1) The Henderson & Venkatraman (1993) model is

Answer 1

c) a Strategic alignment model to align business and ICT.

Question 2

2) The value chain model is a model that is more appropriate to study the impact of information technology on strategy of firms when compared to Porter’s five forces model.
a) True
b) False

Answer 2

a) True -> ok

Question 3

3) Consider the following statement: “When you apply Porter’s 5 forces model to Uber then, the bargaining power of buyers is low”. This statement is:
a) True
b) False

Answer 3

b) False -> ok
Customers can easily switch from one service to another. Most of the buyers of Uber are price sensitive and continuously on the look out for other alternatives, hence they have a high bargaining power. (see https://www.porteranalysis.com/)

Question 4

4) According to the Henderson & Venkatraman (1993) model, the alignment perspective of Microsoft, IBM, SAP is an example of
a) Strategic execution.
b) Technology transformation.
c) Competitive potential.
d) Service level.

Answer 4

d) Service level. -> ok

Service Level = alignment across execution domains, technology adoption, and service delivery to meet organizational objectives
* IT companies like Microsoft, IBM, SAP start with an ICT strategy.
* Transform it into ICT infrastructure and processes, operationalizing various types of infrastructure for customers.
* SAP, for instance, provides ERP software with processes for purchasing, marketing, HR, etc., utilized and operationalized by its customers.

Question 5

5) IT strategy only has an influence on the internal domains of strategy determination of an organization. This is the reason why IT strategy affects the way in which internal processes, capabilities and infrastructure are aligned with the business strategy.
a) True
b) False

Answer 5

b) False -> ok
IT strategy definitely not only influences the internal domain. That is exactly what is the underlying principle behind the model of Henderson and Venkatraman. You could even say that the external positioning of IT (i.e. IT strategy) is a key distinguishing factor of the model over other models. In addition, the addition of IT strategy allows for the identification of other alignment perspectives beyond the traditional Strategic Alignment perspective.

Question 6

6) Consider the following statement: “When you apply Porter’s 5 forces model to Uber then, the threat of substitute products or services is low”.
a) True
b) False

Answer 6

b) False -> ok
The threats come from other taxi providers, but also indirectly from other means of transport (e.g., bus and train). (see https://www.porteranalysis.com/)

Question 7

7) The Value chain model
a) only looks at the firm internally.
b) only looks at the firm externally.
c) looks at the firm both internally and externally.
d) looks at none of the options mentioned.

Answer 7

c) looks at the firm both internally and externally. -> ok

Question 8

8) Which statement is CORRECT?
a) Apple is an example of a company whose customers have low bargaining power.
b) Apple has a very low return on its iPhones.
c) Low switching costs imply a lower bargaining power of your buyers.
d) Low product differentiation implies lower bargaining power of your buyers.

Answer 8

a) Apple is an example of a company whose customers have low bargaining power. -> ok

Question 9

9) According to the Henderson & Venkatraman (1993) model, the alignment perspective of Google, Facebook, Amazon is an example of
a) Strategic execution
b) Technology transformation
c) Competitive potential
d) Service level

Answer 9

c) Competitive potential -> ok

Google, Facebook, and Amazon, where the ICT strategy (e.g., Google’s search engine) evolves into a business strategy, such as advertising, operationalized through infrastructure.

Question 10

10) When an organization strives for alignment via the so-called “Technology transformation” perspective, it will start by defining the business strategy, but before aligning the operational level to it, alignment is sought in terms of ICT strategy in order to first strategically position the firm from a technological perspective.
a) True
b) False

Answer 10

a) True -> ok

Question 11

11) Consider the following statement: “When you apply Porter’s 5 forces model to to Heineken (the beer producer) then, the threat of new entrants is high”.
a) True
b) False

Answer 11

b) False -> ok

Question 12

12) In terms of threat of new entrants,
a) A pizza business has a high entry barrier and a computer chip manufacturer a low entry barrier.
b) A pizza business has a low entry barrier and a computer chip manufacturer a high entry barrier.
c) Both a pizza business and a computer chip manufacturer have a low entry barrier.
d) Both a pizza business and a computer chip manufacturer have a high entry barrier.

Answer 12

b) A pizza business has a low entry barrier and a computer chip manufacturer a high entry barrier. -> ok

Question 13

13) Which are potential problems to realize functional integration in the Henderson & Venkatraman (1993) model?
a) C-level executives are ill-informed are reluctant to use new IT technology.
b) End-users are either reluctant or too impatient to use IT technology.
c) The IT professional lacks a strategic view.
d) All of the above.

Answer 13

d) All of the above. -> ok

Question 14

14) Companies can only realize competitive advantages with information technology when it is applied to primary activities in the value chain model.
a) True
b) False

Answer 14

b) False -> ok

Question 15

15) Which statement is NOT CORRECT?
a) Porter’s model is generic, applicable to any company in any industry.
b) Porter’s model provides detailed explanations for firm/industry profitability.
c) Porter’s model facilitates reasoning about an organization’s strategic position with respect to its external environment.
d) Porter’s model gives clear recommendations to outline the future strategy of the firm.

Answer 15

d) Porter’s model gives clear recommendations to outline the future strategy of the firm. -> ok

Question 16

16) During the COVID crisis, many people started using Zoom, Teams, etc to do on-line video calls instead of travelling using airplanes. For the airplane industry, this is an example of:
a) Bargaining Power of Buyers
b) Bargaining Power of Suppliers
c) Rivalry Among Existing Competitors
d) Threat of Substitute Products or Services

Answer 16

d) Threat of Substitute Products or Services -> ok

Question 17

17) Consider the following statement: “When you apply Porter’s 5 forces model to Uber then, the industry rivalry is high.” This statement is

Answer 17

a) True -> ok

Question 18

18) According to the Henderson & Venkatraman (1993) model there should be
a) strategic fit between the business strategy and the operational infrastructure and processes only.
b) strategic fit between the ICT strategy and the ICT infrastructure and processes only.
c) strategic fit between both the
business strategy and the operational infrastructure and processes and
the ICT strategy and the ICT infrastructure and processes.
d) no strategic fit at all.

Answer 18

c) strategic fit between both the business strategy and the operational infrastructure and processes and the ICT strategy and the ICT infrastructure and processes. -> ok

focuson 2 or 3 links

Question 19

19) By investing in an IT-enabled fresh and frozen grocery facility that stores and retrieves items and loads pallets automatically, Walmart reduced the

Answer 19

a) reduced the bargaining power of buyers and reduced the threat of new entrants. -> ok

Question 20

20) The alignment perspective referred to as “strategic execution” starts from defining the IT strategy and aligning the business strategy to it, before aligning the operational and IT infrastructure.

Answer 20

b) False -> ok

Strategic execution = implementing strategies to achieve business goals by leveraging information technology
* Begin with a business strategy.
* Define operational infrastructure and processes to support the business strategy.
* Move to ICT infrastructure and processes.

Question 21

+) Henderson and Venkatraman claim that no single IT application, regardless of how innovative it is, can lead to a sustainable competitive advantage

Answer 21

a) True -> ok
The key reasoning is that it is not the technology itself, but the organizational capability to leverage the technology that will determine whether a competitive advantage can be created with the technology.

Question 22

+) In the model of Henderson and Venkatraman, realizing a good strategic functional integration refers to the fact that ICT and business strategy are aligned.

Answer 22

a) True -> ok

Question 23

+) according to the Henderson and Venkatraman (1993) model IT should be seen as
a) a supporting function
b) a burden
c) a business transformation enabler
d) a costly investment

Answer 23

c) a business transformation enabler -> ok

Question 24

+) which statement is correct
a) Porter’s five forces theory is nor a business model nor an IS model
b) Porter’s Five forces theory is an IS model and not a business model
c) Porter’s five forces theory is a business model and not an IS model
d) Porter’s Five forces theory is both a business model and an IS model

Answer 24

c) Porter’s five forces theory is a business model and not an IS model -> ok

Question 25

+) Henderson and Venkatraman describe 4 alignment perspectives along which the strategic alignment of business and IT can be categorized.
The technology transformation alignment perspectives is concerned with the exploitation of emerging IT capabilities to impact new products and services, influence the key attributes of strategy, and develop new forms of relationships.
This perspective allows the adaptation of business strategy via emerging IT capabilities.

Answer 25

b) False -> ok

Competitive Potential = emerging IT capabilities can be exploited to impact the development of new products and services.
Technology Transformation = role of IT in transforming business processes and operations

Question 26

+) Consider the relationship between a supermarket and a milk farmer. In this relationship (five forces)

Answer 26

b) the supermarket has high bargaining power and the milk farmer has low bargaining power -> ok

If there are numerous milk farmers supplying similar products, the supermarket can easily switch to other suppliers
milk, is standardized, supermarkets can view suppliers as interchangeable
If the milk farmer relies heavily on the supermarket for distribution, the supermarket gains leverage

Question 27

+) The value chain model contains 4 primary and 5 support activities

Answer 27

b) False -> vice versa

Question 28

+) Consider the following statement: “When you apply Porter’s 5 forces model to the Heineken then, the threat of new entrant Is high”.

Answer 28

b) False -> ok

• The bigger level of firms in the beer sector existing and enjoying a significant ratio of industry’shigh profit.
• The beer business faces a highly expensive factory-based start-up that focuses on quality, cost, legalmatters.
• The brewing industry has high barriers to entry due to significant capital requirements for breweriesand distribution networks.
• Established brands like Heineken benefit from economies of scale and brand recognition.
• Regulations and licenses can be difficult to obtain in many countries.