ch 2 end of chapter Flashcards
Which of the following is NOT an example of a sustaining technology?
A. Smartphones with larger displays
B. Portable DVD players with longer battery
C. Uber
D. Digital cameras with larger LCD screens
E. Newly designed side airbags in the latest model Toyota RAV4
C. Uber
The Internet is a disruptive innovation that has affected Porter’s Five Forces in all the following ways EXCEPT ________.
A. lowering barriers to entry
B. increasing rivalry among competitors
C. eliminating switching costs
D. decreasing the threat of substitutes
E. increasing the power of buyers
D. decreasing the threat of substitutes
When established companies fail to respond to disruptive innovations that capitalize on new technologies, they can become victims of ________.
A. creative destruction
B. a takeover
C. bankruptcy
D. creative dissolution
E. a merger
A. creative destruction
In the music industry, why were innovations like Apple’s iTunes considered to be disruptive innovations?
A. Because Apple had the support of music company executives
B. Because these innovations reduced Apple’s supplier power in the music industry
C. Because these innovations had a negative effect on existing competitors in the music industry
D. Because these innovations had higher operational costs
E. Because these innovations were illegal
C. Because these innovations had a negative effect on existing competitors in the music industry
Which of the following governmental actions will increase the threat of new entrants in a market?
A. The Federal Reserve reduces the interest rates on credit for small businesses.
B. There is a decrease in enforcement of anti-trust laws that prevents monopolies.
C. The Department of Commerce offers a patent to an existing player.
D. The government squeezes money from the market through open-market operations.
E. The Federal Reserve increases the cash reserve ratio to tackle inflation.
A. The Federal Reserve reduces the interest rates on credit for small businesses.
The ecosystem in which a company is embedded is a(n) ________.
A. natural community that is restricted to the members of its value chain
B. community constituted by markets that are not related to the company
C. economic community that includes related industries
D. economic community that focuses entirely on the company and its immediate competitors
E. single industry containing similar firms
C. economic community that includes related industries
Which of the following activities would you perform to measure and compare your business processes to similar processes of other companies within your industry?
A. Best practices
B. Value chain analysis
C. Business process redesign
D. Competitive forces analysis
E. Benchmarking
E. Benchmarking
Which of the following represents procurement as part of the support value activities in a value chain analysis?
A. Purchasing inputs such as raw materials, resources, equipment, and supplies
B. Hiring new employees
C. Creating a new advertising campaign for the company’s products
D. Distributing goods and services to customers
E. Providing technical support for the manufacturing processes
A. Purchasing inputs such as raw materials, resources, equipment, and supplies
”The value chain does not end when the buyer pays for the product or service.” Which of the following statements contradicts this judgment?
A.Total value transfer of tangible goods happens at the point of sale.
B. Customer orientation is the key to success in modern business.
C. The value chain includes all components that add value to a product or service.
D. Customer reviews of products and services can help companies identify areas of improvement.
E. Marketing success should be measured in terms of customer satisfaction.
A.Total value transfer of tangible goods happens at the point of sale.
In the highly competitive cell phone market, BlackBerry had positioned its smartphone by focusing its product on the needs of government and corporate business users. Which of Porter’s three basic strategies did BlackBerry pursue with its smartphone?
A. Product differentiation strategy
B. Value-added strategy
C. Low-cost leadership strategy
D. Customer-focused strategy
E. Focused niche strategy
E. Focused niche strategy
HR Solutions, Inc. provides human resource technology solutions to companies that are seeking ways to reduce costs and improve efficiencies in their operations. Which one of the following functions is NOT a human resource function that would benefit from a technology-based solution?
A. Developing a website to answer routine HR questions
B. Interviewing potential job candidates
C. Processing timesheets electronically
D. Implementing direct deposit for all payroll processing
E. Implementing an online application process
B. Interviewing potential job candidates
According to Michael Porter, companies should pick one of the three basic strategies and stick with it. Walmart has followed this theory by focusing its strategy on dominating a broad market. Which strategy is Walmart following?
A. Focused niche
B. Market leadership
C. Customer intimacy
D. Product differentiation
E. Low-cost leadership
E. Low-cost leadership
Information technology (IT) is a strategic enabler when ________.
A. it is used to automate the procurement processes in manufacturing
B. it focuses on the growth of an organization
C. it is used to manage day-to-day operations
D. it is used to develop work schedules
E. it is used to create a new marketing campaign for the company
B. it focuses on the growth of an organization
Which of the following statements is NOT a key reason that information technology (IT) is essential to managing nonprofit organizations?
A. Operational requirements for nonprofits are similar to for-profit businesses.
B. Most nonprofit organizations have a concealed profit motive.
C. Some nonprofit organizations engage in sales and marketing activities.
D. Nonprofits often require extensive human resources to operate effectively.
E. Nonprofits need to communicate and collaborate extensively with other organizations.
B. Most nonprofit organizations have a concealed profit motive.
Government funding for technology-based innovation is often the only source of funding available for high-risk projects that private investors may avoid. For which of the following projects is government funding most critical?
A. A scheme to improve the financial status of a company
B. An infrastructure project that should be completed in one year
C. A project to launch a new, low-cost, and fuel-efficient car
D. A project to develop a more disease-resistant orange tree
E. A research project on hybrid oil
E. A research project on hybrid oil
Xerox, a company that sells business services and document technology products, sustains its investment in technological innovation, particularly in areas such as color science, digital imaging, and nanotechnology. These strategic investments, made only in specific areas, keep the company ahead of the competition. Which of the following messages does this example convey?
A. IT investments must be made on the most modern technology available in the market.
B. The ability to extract the value of technology requires human imagination and innovation.
C. Xerox will not be able to compete effectively without IT investments in all areas of the company.
D. Large IT investments are essential for the success of a company in today’s business environment.
E. IT investments should not be focused on certain aspects and should have a broad outlook.
B. The ability to extract the value of technology requires human imagination and innovation.
Haliburton Manufacturing Corporation makes industrial air conditioning units for large organizations. Last year the company spent more than $5 million on new technology designed to make its employees more productive and streamline its business processes. The expected return on investment, however, was much lower than the company expected, and production of new air conditioners was not improving. What economic theory helps explain the reason Haliburton is not getting an immediate return on its IT investment?
A. Rational choice theory
B. Productivity paradox
C. Productivity theory
D. Business performance theory
E. Agency theory
B. Productivity paradox
Columbus Flight Services, Inc. offers charter flights serving small to medium cities. They are evaluating the possibility of expanding into the corporate jet leasing industry. As part of the planning process, they are using Porter’s Five Competitive Forces model to evaluate the ________.
A. industry
B. market
C. competition
D. investment
E. product
A. industry
A wireless provider is currently offering customers who buy a new iPhone with a two-year contract a special package that includes a leather case, extra car charger, and earphones. In terms of Porter’s Five Forces, what is this company trying to do with this special promotion?
A. Increase the threat of new entrants.
B. Increase the threat of substitutes.
C. Decrease the power of suppliers.
D. Decrease buyer power.
E. Increase buyer power.
D. Decrease buyer power.
Hibbett Sports offers a reward card that gives customers coupons and incentives for store purchases that they can redeem for additional merchandise. This is an example of a ________.
A. customer service system
B. marketing program
C. digital coupon
D. bonus program
E. loyalty program
E. loyalty program
A pharmaceutical company that invests heavily in research and development (R&D) and has several new, patented products ready for market would be operating in an industry with ________.
A. low supplier power
B. high buyer power
C. high threat of new entrants
D. high threat of substitute products
E. low threat of new entrants
E. low threat of new entrants
Pharma, Inc. recently started selling a new, patented drug for high cholesterol called Terazatin. Sales of Terazatin are so successful that Pharma has decided to raise the price from $12 a pill to $20 a pill. Which of the following forces is Pharma using to increase the price of Terazatin?
A. Threat of new entrants
B. Buyer power
C. Threat of new products
D. Supplier power
E. Rivalry among existing competitors
D. Supplier power
Which of Porter’s Five Forces is high when it is easy for competitors to enter a market and low when there are high capital investment costs to compete in the market?
A. Buyer power
B. Threat of new entrants
C. Rivalry among existing competitors
D. Threat of substitutes
E. Supplier power
B. Threat of new entrants
Which of the following businesses is an example of where rivalry among existing competitors is strong and buyers have power?
A. Lawn care business
B. English antiques store
C. Dude ranch vacation
D. Commercial-grade kitchen appliances
E. Customized motorcycles
A. Lawn care business
Cingular Cell, Inc. charges its customers a high contract termination fee if they cancel their cell phone contract before the expiration date. The termination fee is an example of a ________.
A. switching cost
B. customer service penalty
C. customer retention fee
D. customer service fee
E. loyalty cost
A. switching cost
