Chapter 2 Questions

Question 1

True or False

A link between a firm’s IS strategy and organizational strategy focuses more on its external requirements than internal requirements.

Answer 1

False

Question 2

Two automobile manufacturers are working together to develop hybrid technology. This type of relationship between the two automobile manufacturers is best described as:

Answer 2

Co-opetition

Question 3

Suppose Zara has a linked supply chain with Silk City, a fabric supplier. Zara and Silk City use IT to seamlessly exchange data, communicating requirements as well as delivery expectations. The relationship between Zara and Silk City is best described as:

Answer 3

Strategic alliance

Question 4

Many companies like Zara use POS to capture information on what has sold, to whom and when. This use of technology to realize efficiencies supports which one of Porter’s value chain activities?

Answer 4

Marketing & Sales

Question 5

Which is not a prescribed area of focus for gaining competitive advantage?

Strongholds
Cost/Quality
Deep Pockets
Timing/Know-how
Insider Information

Answer 5

Strongholds

Question 6

True or False

Zara’s use of information resources has given it a substantial advantage over its competitors

Answer 6

True

Question 7

Which one of the following risks can threaten the IS of a company in a highly regulated industry such as financial services or health care?

a) Demonstrating bad timing
b) Awakening a sleeping giant
c) Mobile-based alternative removes advantages
d) Running afoul of the law
e) Implementing IS poorly

Answer 7

d) Running afoul of the law

Question 8

Match an organization’s activity with the competitive force it has successfully influenced.

Threat of new entrants
Bargaining power of the buyer
Threat of substitute
Bargaining power of suppliers

Amazon’s One Click ordering system makes buying online easy, enticing the customer to return for other purchases.

Answer 8

Bargaining power of the buyer

Question 9

Match an organization’s activity with the competitive force it has successfully influenced.

Threat of new entrants
Bargaining power of the buyer
Threat of substitute
Bargaining power of suppliers

Apple’s ability to create new products even at the risk of cannibalizing existing products.

Answer 9

Threat of new entrants

Question 10

Match an organization’s activity with the competitive force it has successfully influenced.

Threat of new entrants
Bargaining power of the buyer
Threat of substitute
Bargaining power of suppliers

Amazon’s purchase of Zappos.

Answer 10

Bargaining power of suppliers

Question 11

Match an organization’s activity with the competitive force it has successfully influenced.

Threat of new entrants
Bargaining power of the buyer
Threat of substitute
Bargaining power of suppliers

Walmart’s massive, complex inventory control system is hard for others to replicate and gain the same economies of scale.

Answer 11

Threat of substitute product

Question 12

The supply chain:

a) Points out the concept of weak link in an ordering process
b) Helps us understand how value is built inside a single firm.
c) Is composed of several value chains linked into a larger chain (a chain within a chain).
d) All of the above
e) None of the above

Answer 12

c) Is composed of several value chains linked into a larger chain (a chain within a chain).

Question 13

Which of the following is a support activity of the Value Chain Model?

Operations
Facilities
Organization 
Informatics
Outbound Logistics

Answer 13

Organization

Question 14

An inter-organizational relationship that affords one or more companies in the relationship a strategic advantage

Answer 14

Strategic Alliance

Question 15

Facebook has for some years offered services that many individuals have adapted to, making it difficult for them to choose another social networking site. It can be said that Facebook has protected itself well from which competitive force since the beginning?

Bargaining power of suppliers
Threat of substitute products
Potential threat of new entrants
Bargaining power of buyers
Industry collaboration

Answer 15

Potential threat of new entrants

Question 16

A firm releases a new technology only to have a competitor implement a similar technology with more features and value to the consumer. This would be which type of risk?

Demonstrating bad timing
Awakening a sleeping giant
Mobile-based alternative removes advantages
Running afoul of the law
Implementing IS poorly

Answer 16

Awakening a sleeping giant

Question 17

True or False

Saleforce.com is an example of SAAS (Software as a service).

Answer 17

True

Question 18

While information systems can be used to gain a strategic advantage, they have inherent risks. Hershey Foods, for example, crippled its Halloween sales when its complex IS system failed to support its supply and inventory needs during peak production season. This is an example of which specific IS risk?

Demonstrating bad timing
Awakening a sleeping giant
Mobile-based alternative removes advantages
Running afoul of the law
Implementing IS poorly

Answer 18

Implementing IS poorly

Question 19

Kodak was once the largest supplier of photographic film. In 2004 it was dropped from the Dow Jones Industrial Average after having been listed for 74 years. Kodak failed to use IT to fend off which one of the following of Porter’s 5 competitive forces?

Bargaining power of suppliers
Threat of substitute products
Potential threat of new entrants
Bargaining power of buyers
Industry collaboration

Answer 19

Threat of substitute products

Question 20

Match the technology with the era it dominated.

Era I 1960s

Answer 20

Centralized mainframe

Question 21

Match the technology with the era it dominated.

Era II 1970s

Answer 21

Centralized minicomputers

Question 22

Match the technology with the era it dominated.

Era III 1980s

Answer 22

Decentralized minicomputers and personal computers

Question 23

Match the technology with the era it dominated.

Era IV 1990s

Answer 23

Client server

Question 24

Match the technology with the era it dominated.

Era V 2000s

Answer 24

The Internet

Question 25

Match the technology with the era it dominated. Era VI 2010+

Answer 25

Social networks, mobility and cloud computing

Question 26

Which part of the value chain includes the manufacturing of goods? ``` Inbound Logistics Outbound Logistics Operations Service Organization ```

Answer 26

Operations

Question 27

A strategy where companies cooperate and compete at the same time with companies in its value net:

Answer 27

Co-opetition

Question 28

Zara's strategically uses information technologies to do all of the following EXCEPT: a) Bring new products quickly to market, meeting customer demands b) Support a continuous flow of information from stores to manufacturers to distributors c) Maintain a rich, centralized repository of customer data d) Build silos of responsibilities with limited interaction between store managers, designers and market specialists e) Keep its inventory levels very low (relative to other retailers)

Answer 28

Build silos of responsibilities with limited interaction between store managers, designers and market specialists

Question 29

Which "view," applied in the area of Information Systems, helps 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

Answer 29

Resource-Based View

Question 30

The Nike + iPod Sports Kit is a sensor in your shoe that syncs with your iPod and provides details about your workout. This inter-organizational relationship affords both Nike and Apple a business advantage. This relationship between Nike and Apple is best described as: a) Strategic alliance b) Co-opetition c) Collaboration d) Dependence e) Competition

Answer 30

Strategic Alliance

Question 31

Partnering with a competitor is becoming more and more common in today's integrated, technology-based environment. This type of collaboration with a competitor is uniquely described as:

Answer 31

Co-opetition

Question 32

A firm releases a new technology only to have a competitor implement a similar technology with more features and value to the consumer. This would be which type of risk?

Answer 32

Awakening a sleeping giant

Question 33

True or False Supply Chain Management (SCM) consists of technological components as well as a process that brings together information about customers, sales and marketing.

Answer 33

False

Question 34

Which is not a competitive force? ``` Bargaining power of suppliers Threat of substitute products Potential threat of new entrants Bargaining power of competitors Industry collaboration ```

Answer 34

Bargaining power of competitors

Question 35

Match Zara's use of IT to t he competitive force it influences. Threat of new entrants Threat of substitute product Bargaining power of suppliers Zara cuts and dyes much of its fabric, making it less dependent on those that provide fabric.

Answer 35

Bargaining power of suppliers

Question 36

Match Zara's use of IT to t he competitive force it influences. Threat of new entrants Threat of substitute product Bargaining power of suppliers IT enables Zara to turn around new products, reacting within 3 weeks to customer's likes and dislikes.

Answer 36

Threat of substitute product

Question 37

Match Zara's use of IT to t he competitive force it influences. Threat of new entrants Threat of substitute product Bargaining power of suppliers Zara has a highly collaborative group of designers, sales people and manufacturing planners who are supported by a unique IT that is hard for any retailer to replicate.

Answer 37

Implementing IS poorly

Question 38

Starbucks allows customers in the US to use smartphones to pay for their purchases in an effort to drive sales. Starbucks uses a reader in the store to scan a bar code displayed on the customer's smartphone screen. While this use of information resources may be used to gain a strategic advantage, there are possible risks. Match the potentially harmful experience below with the IT risk it represents: Implementing IS poorly Demonstrate bad timing Awaking a sleeping giant A large credit card processing agency deploys a smartphone application for mobile payments that can be used in any retail environment.

Answer 38

Awaking a sleeping giant

Question 39

Starbucks allows customers in the US to use smartphones to pay for their purchases in an effort to drive sales. Starbucks uses a reader in the store to scan a bar code displayed on the customer's smartphone screen. While this use of information resources may be used to gain a strategic advantage, there are possible risks. Match the potentially harmful experience below with the IT risk it represents: Implementing IS poorly Demonstrate bad timing Awaking a sleeping giant Someone reported that the use of the mobile payment application was causing longer lines at the cash register.

Answer 39

Implementing IS poorly

Question 40

Starbucks allows customers in the US to use smartphones to pay for their purchases in an effort to drive sales. Starbucks uses a reader in the store to scan a bar code displayed on the customer's smartphone screen. While this use of information resources may be used to gain a strategic advantage, there are possible risks. Match the potentially harmful experience below with the IT risk it represents: Implementing IS poorly Demonstrate bad timing Awaking a sleeping giant A very small percentage of customers use the service because few have mobile devices and even fewer are able to download and use the application.

Answer 40

Demonstrate bad timing

Question 41

True or False Unlike most assets, information resources do not lose value over time.

Answer 41

False

Question 42

Match the methodology used to align a firm's business strategy with its information strategy. Porter's 5 Competitive Forces Porter's Value Chain Framework Resource-Based View Leverage IT resources that are identified to create and sustain a strategic advantage for the firm.

Answer 42

Resource-Based View

Question 43

Match the methodology used to align a firm's business strategy with its information strategy. Porter's 5 Competitive Forces Porter's Value Chain Framework Resource-Based View Information can lower cost of business and strategically adds value to the firm's internal operations.

Answer 43

Porter's Value Chain Framework

Question 44

Match the methodology used to align a firm's business strategy with its information strategy. Porter's 5 Competitive Forces Porter's Value Chain Framework Resource-Based View Information resources should be used to strategically alter the marketplace while benefiting the firm's position in the industry.

Answer 44

Porter's 5 Competitive Forces

Question 45

Over the different eras, organizations have adapted their information systems strategy as technologies have matured. Place these different needs satisfied by information systems in order of maturity. In other words, which need is most likely the first need to be satisfied by an organization? Need to use social IT platforms to collaborate and engage stakeholders Need to innovate and create opportunities Need to lower existing transaction costs

Answer 45

1. Need to lower existing transaction costs 2. Need to innovate and create opportunities 3. Need to use social IT platforms to collaborate and engage stakeholders

Question 46

Porter's five "Forces," used so often in the text for analysis of IT applications, include all of the following except: ``` Threat of substitute products Bargaining power of suppliers Bargaining power of customers New entrants Switching costs ```

Answer 46

Switching costs

Question 47

Porter's value chain framework suggests that a competitive advantage can stem from: ``` Lowering costs and adding value Reducing isolated costs Disregarding customer data Optimizing internal costs Improving customer service ```

Answer 47

Lowering costs and adding value

Question 48

Match Zara's support activity to the Porter's value chain activity it represents. Huma Resources Technology Purchasing Zara works with hardware and software vendors to develop and design automated systems that support activities like the distribution of goods and the cutting of fabrics.

Answer 48

Technology

Question 49

Match Zara's support activity to the Porter's value chain activity it represents. Huma Resources Technology Purchasing Fabric suppliers are paid for the fabric Zara has purchased.

Answer 49

Purchasing

Question 50

Match Zara's support activity to the Porter's value chain activity it represents. Huma Resources Technology Purchasing Store managers are trained to not only service customers but also discover what the customer wants but is unable to find.

Answer 50

Human Resources

Question 51

The ___________ view considers activities that create, deliver, and support a company's product or service.

Answer 51

Porter value chain

Question 52

The risks of using information resources include all of the following except: ``` Demonstrating bad timing Awakening a sleeping giant Implementing IS poorly Missing cooperative opportunities Failing to deliver what users want ```

Answer 52

Missing cooperative opportunities

Question 53

A company that is in a market with few buying options for the consumer is enjoying a high amount of which one of Porter's Five Competitive Forces? ``` Bargaining power of suppliers Threat of substitute products Potential threat of new entrants Bargaining power of buyers Industry competitors ```

Answer 53

Bargaining power of suppliers

Question 54

Which of the following is NOT a primary activity of the Value Chain model? ``` Inbound Logistics Operations Outbound Logistics Purchasing Marketing and Sales ```

Answer 54

Purchasing

Question 55

Social capital is a valuable resource for businesses. Match the category of social capital with the questions it seeks to answer. Structural Relational Cognitive How do connect people interact?

Answer 55

Relational

Question 56

Social capital is a valuable resource for businesses. Match the category of social capital with the questions it seeks to answer. Structural Relational Cognitive How do the connected individuals think?

Answer 56

Cognitive

Question 57

Social capital is a valuable resource for businesses. Match the category of social capital with the questions it seeks to answer. Structural Relational Cognitive Who is connected to whom?

Answer 57

Structural