IB: Chap 6 Digital Business and Big Data 2

Question 1

What is digital technology?
a. Tools that automate manual labor
b. Systems for storing and processing data
c. Physical machines for production
d. Methods for creating physical goods

Answer 1

b. Systems for storing and processing data

Question 2

What does “digitalization” in business aim to achieve?
a. Reduce the need for online interactions
b. Transform physical operations into digital systems
c. Increase traditional marketing methods
d. Avoid the use of automation

Answer 2

b. Transform physical operations into digital systems

Question 3

What is a key benefit of digital business?
a. Higher manual workload
b. Reduced efficiency
c. Improved customer engagement
d. Increased operational costs

Answer 3

c. Improved customer engagement

Question 3

What is the “on-demand” digital business model?
a. Providing free services with ads
b. Offering products only when requested
c. Selling products through physical stores
d. Offering bulk discounts online

Answer 3

b. Offering products only when requested

Question 4

Which of the following is NOT a characteristic of big data?
a. Volume
b. Veracity
c. Viscosity
d. Velocity

Answer 4

c. Viscosity

Question 5

What is an example of “machine data”?
a. Social media posts
b. Sensor data from devices
c. Customer payment transactions
d. Email surveys

Answer 5

b. Sensor data from devices

Question 6

What does the “veracity” characteristic of big data refer to?
a. Speed of data processing
b. Variety of data types
c. Accuracy of data
d. Volume of data

Answer 6

c. Accuracy of data

Question 7

In the DIKW pyramid, what comes after “knowledge”?
a. Data
b. Wisdom
c. Analysis
d. Information

Answer 7

b. Wisdom

Question 8

What tool is used in big data analytics for pattern recognition?
a. Data cleaning software
b. Predictive analytics
c. Manual spreadsheets
d. Handwritten logs

Answer 8

b. Predictive analytics

Question 9

A company wants to transition from manual data entry to an automated system. Which benefit of digital business will it likely experience first?

Answer 9

Increased productivity through automation and reduced errors.

Question 10

Netflix uses viewer preferences to produce hit TV series. What process does this describe in the DIKW pyramid?

Answer 10

Moving from “knowledge” (analyzed viewer habits) to “wisdom” (informed decisions about content production).

Question 11

If an organization collects sales data daily, what “V” of big data does this represent?

Answer 11

Velocity

Question 12

An e-commerce platform offers personalized ads. What big data source is being used?

Answer 12

Social data

Question 13

A manufacturing company uses IoT sensors for equipment monitoring. What type of data is this?

Answer 13

Machine (sensor) data.

Question 14

A transportation company, similar to Uber, wants to use digital business models to expand its services. Explain which model would suit this company best and why.

Answer 14

The “on-demand” model is suitable as it allows the company to provide transportation services based on real-time requests from customers. This ensures efficiency and meets customer needs promptly.

Question 15

A retailer collects customer preferences from surveys, social media, and sales transactions. Explain how the retailer can use the DIKW pyramid to decide what products to promote during the holiday season.

Answer 15

Data: Collect raw data from the sources.
Information: Analyze data to find trends, such as popular items.
Knowledge: Understand customer buying patterns (e.g., age-specific preferences).
Wisdom: Use this knowledge to promote relevant products during the holiday season to maximize sales.

Question 15

A company wants to adopt digital technology to streamline operations and improve customer engagement.
Discuss how adopting technologies like AI and IoT could help achieve these goals.

Answer 15

AI can automate customer service (e.g., chatbots), reducing response times and improving engagement.
IoT devices can monitor inventory in real-time, ensuring accurate stock levels and timely replenishment. This enhances customer satisfaction by reducing delays

Question 16

A small business owner is hesitant to adopt digitalization, fearing high initial costs.
Explain the benefits of digitalizing their processes, focusing on cost-effectiveness and productivity in the long term.

Answer 16

Digitalization reduces operational costs by automating repetitive tasks.
It increases productivity by minimizing errors and speeding up workflows.
Initial investments can lead to better decision-making through data analysis, which drives higher revenue.

Question 17

Scenario: A global e-commerce company uses the “Marketplace” digital business model.
Identify potential challenges and how big data can address them.

Answer 17

Challenges: Managing seller quality, ensuring customer satisfaction, and pricing optimization.
Big Data Solutions:
Analyze customer reviews to monitor seller performance.
Use transactional data to identify pricing trends.
Employ predictive analytics to recommend popular products to customers.

Question 18

Scenario: A supermarket chain collects vast amounts of customer data through loyalty cards and online purchases.
Describe how the 5Vs of big data (Volume, Variety, Velocity, Veracity, Value) apply to their data collection and usage.

Answer 18

Volume: High data volume from in-store and online transactions.
Variety: Includes structured data (sales records) and unstructured data (customer reviews).
Velocity: Continuous real-time updates from purchases and promotions.
Veracity: Ensuring data accuracy to avoid misleading insights.
Value: Analyzing trends to design targeted promotions and increase sales.

Question 18

Scenario: A startup aims to develop an app similar to Uber.
Explain which key digital business benefits they should highlight to attract investors.

Answer 18

Improved customer engagement through a user-friendly app interface.
Increased productivity by automating ride-matching and payment processes.
Enhanced decision-making using GPS and user data to optimize routes and pricing.

Question 19

Scenario: A beverage company is deciding whether to use glass or plastic bottles based on customer preferences.
Use the DIKW pyramid to explain how they should analyze their data and make a decision.

Answer 19

Data: Collect raw data on bottle preferences from surveys and social media.
Information: Identify trends, such as younger customers preferring glass bottles.
Knowledge: Connect preferences with other factors (e.g., environmental concerns).
Wisdom: Produce glass bottles for younger demographics and plastic bottles for older demographics.

Question 20

Scenario: A media streaming platform like Netflix wants to produce new TV shows.
Discuss how big data analytics can guide their decisions.

Answer 20

Collect data on viewer habits (e.g., paused, rewatched, abandoned content).
Use predictive analytics to identify themes and genres with high demand.
Develop shows that align with audience preferences, ensuring higher viewership.

Question 21

Scenario: A retail company is implementing a recommendation system similar to Amazon.
Explain how big data characteristics (Variety, Velocity) can improve the system’s accuracy.

Answer 21

Variety: Use diverse data types (purchase history, browsing behavior, reviews) for better personalization.
Velocity: Update recommendations in real-time based on recent customer activity.

Question 21

Scenario: A company offers free digital services supported by targeted ads (Free Model).
Discuss the ethical concerns around data collection and how the company can address them.

Answer 21

Concerns: Privacy invasion and misuse of user data.
Solutions: Implement transparent data policies, obtain user consent, and ensure data security to build trust.

Question 22

Scenario: A healthcare provider uses IoT devices to monitor patient health in real time.
Explain how digital business benefits and big data analytics improve patient outcomes.

Answer 22

Benefits: Continuous health monitoring reduces emergency incidents.
Big Data: Analyze patterns in health data to predict issues and recommend preventive actions.