Chpt 2

Question 1

Activity

Answer 1

a business function that receives inputs and produces outputs. An activity can be performed by a human, by a computer system, or by both. The inputs and outputs can be physical, like drone parts, or they can be data, such as a purchase order.

Question 2

Business process

Answer 2

a network of activities that generate value by transforming inputs into outputs

Question 3

Business process management

Answer 3

A cyclical process for systematically creating, assessing, and altering business processes.

Question 4

Competitive strategy

Answer 4

The strategy an organization chooses as the way it will succeed in its industry. According to Porter, there are four fundamental competitive strategies: cost leadership across an industry or within a particular industry segment and product or service differentiation across an industry or within a particular industry segment.

Question 5

Cost

Answer 5

The cost of a business process is equal to the cost of the inputs plus the cost of activities.

Question 6

First mover advantage

Answer 6

The benefit of gaining market share by being the first to develop a new technology in a market segment.

Question 7

Five forces model

Answer 7

Model, proposed by Michael Porter, that assesses industry characteristics and profitability by means of five competitive forces—bargaining power of suppliers, threat of substitution, bargaining power of customers, rivalry among firms, and threat of new entrants.

Question 8

Intelligent automation

Answer 8

The combination of using RPA (robotic process automation) to automate business processes and AI to improve decision making.

Question 9

Linkages

Answer 9

In Porter’s model of business activities, interactions across value chain activities.

For example, manufacturing systems use linkages to reduce inventory costs. Such a system uses sales forecasts to plan production; it then uses the production plan to determine raw material needs and then uses the material needs to schedule purchases. The end result is just-in-time inventory, which reduces inventory sizes and costs.

Question 10

Low-code systems

Answer 10

systems that require little to no programming to develop business applications, will be one of the most common ways businesses change.

Low-code systems provide companies with the ability to rapidly adapt to a changing environment without expensive traditional application development.

Question 11

Margin

Answer 11

The difference between the value that an activity generates and the cost of the activity

Question 12

Value

Answer 12

the amount of money that a customer is willing to pay for a resource, product, or service.

Question 13

Value chain

Answer 13

A network of value-creating activities.

Question 14

Primary activities

Answer 14

Activities that contribute directly to the production, sale, or service of a product. In Porter’s model they are inbound logistics, operations and manufacturing, outbound logistics, sales and marketing, and customer service.

Question 15

Repository

Answer 15

In a business process model, a collection of something; for example, a database is a repository of data.

Question 16

Robotic process animation

Answer 16

using software robots to automate routine business processes. Don’t confuse RPA with actual physical robots. It doesn’t have anything to do with hardware robots. RPA uses software “bots” to watch how workers process transactions, manipulate data, or respond to requests and then repeat the rule-based process in the same way. RPA can dramatically reduce labor costs, internal fraud, and human errors.

Question 17

Second mover advantage

Answer 17

The benefit of gaining market share by following a pioneering company into a market segment and imitating their product or service, thereby reducing costly research and development expenditures.

Question 18

Startups

Answer 18

Companies that are in their initial stage of development that use technology to create new products or services.

Question 19

Support activities

Answer 19

In Porter’s value chain model, the activities that contribute indirectly to value creation: procurement, technology, human resources, and the firm’s infrastructure.

Question 20

Switching costs

Answer 20

Strategy where organizations can lock in customers by making it difficult or expensive for customers to switch to another product.

Question 21

Unicorn

Answer 21

tech company that reaches a $1 billion valuation in a short period of time.