Chapter 3: Strategy and Information Systems – Flashcards

According to Porter's five forces model, the intensity of each of the forces determines the characteristics of the industry, how profitable it is, and how sustainable that profitability will be.

According to Porter's five forces model, in which of the following situations would a supplier have the highest bargaining power?

According to Porter's five forces model, a group of grain farmers in a surplus year will have reduced ________.

In the context of Porter's five forces model, the bargaining power of customers of medicinal drugs is enhanced when pharmaceutical companies patent their products.

In the context of Porter's five forces model, the bargaining power of suppliers is a weak force when considering the example of auto dealers setting the price of new cars.

According to Porter's five forces model, which of the following would be most affected by the threat of substitutes?

According to Porter's five forces model, which of the following firms would be least affected by the threat of substitutes?

A major drawback of Porter's five forces model is that it does not analyze the threat of substitutes when forming a corporate strategy.

A major drawback of Porter's five forces model is that it ignores the rivalry among firms in the industry.

In the context of Porter's five forces model, the bargaining power of grain farmers in a surplus year is an example of a weak market force.

According to Porter's five forces model, in which of the following examples would rivalry be considered as a weak force affecting the market?

The automobile industry is characterized by many manufacturers and intense competition among them. According to Porter's five forces model, this statement illustrates ________.

Focused cost leadership is observed when a product has the lowest cost ________.

Organizations cannot gain a competitive advantage by enhancing existing products or services.

A furniture manufacturer delivers products to his customers' houses. This is an example of inbound logistics.

Most of the value in a service company is generated by inbound logistics.

Cassandra runs a downtown boutique that sells customized clothes. One of her customers wishes to purchase a trench coat with a bejeweled clip. Cassandra contacts "Gems and Stones" and places an order for the clip. This activity can be classified under ________.

In the inbound logistics activity of a value chain, the manufacturer receives, stores, and disseminates inputs to a product.

A retail company sells products such as agricultural produce and consumer products. The company procures materials from farmers and local producers. This process of obtaining the inputs needed for a business is called ________.

An organization responds to the structure of its industry by choosing a competitive strategy.

Outbound logistics refers to transforming inputs into the final product.

Which of the following value chain activities involves collecting, storing, and physically distributing the product to buyers?

Lynn, the manager of a transportation company, goes through the week's delivery schedule. She calls her team and assigns territories for each executive. She contacts the fleet supervisor to arrange trucks for transportation. Which activity of the value chain is Lynn executing?

The sales process involves sales and marketing as well as outbound logistics activities.

Streamtech, a manufacturer of automobiles, recently received a patent for an unmanned search boat. By doing this, Streamtech has ________.

Activities such as collecting, storing, and physically distributing the products to buyers are considered as primary activities in a value chain.

Support activities in a value chain include the processes of finding vendors, setting up contractual arrangements, and negotiating prices.

Focusing on differentiation is providing a better product or service within an industry segment.

Identify the principle of competitive advantage that is associated with product implementations.

The competitive strategy of locking in customers by making it difficult for them to move to another product is called establishing high switching costs.

A ________ is a collection of something, such as data or raw materials.

Operations involve transforming inputs into the final product.

A business that selects a differentiation strategy would invariably structure itself around low-cost activities.

The cost of the business process is the cost of the inputs plus the cost of the outputs.

Creating a new product to increase margin is an example of using product implementations to achieve competitive advantage.

The total margin of the value chain is the difference between the total value added and the total costs incurred.

The streamlining of business processes to increase margin is key to obtaining competitive advantage.

The difference between the total value added and the total costs incurred is called the ________ of the value chain.

The difference between the value that an activity generates and the cost of the activity is called the ________.

An organization implements an information system to optimize its supply chain. The system helps the organization to reduce wastes. In this scenario, implementing the information system has helped the organization to gain a competitive advantage by ________.

The support activities in the generic value chain do not contribute to the production, sale, and service of the product.

A linkage is a network of activities that generate value by transforming inputs into outputs.

Which of the following statements is true of business process designs?

According to Porter's model of business activities, interactions across value activities are called ________.

A service company checks the availability of resources before planning its projects. This activity can be classified under ________.

The ________ discipline created by Porter states that firms should create new, more efficient business processes that integrate the activities of all departments involved in a value chain.

The central idea of business process design is that organizations should automate or improve their existing functional systems.

Which of the following value chain activities involves transforming raw materials into a finished product or service?

Which of the following statements is consistent with the central idea of business process design?

In the value chain, customer service is concerned with inducing buyers to purchase the product and providing a means for them to do so.

In the next ten years, the ________ is most likely to change.

Organizations that choose a differentiation strategy implement business processes to minimize costs.

An organization's goals and objectives are determined by its competitive strategy.

Information systems create competitive advantage by providing support to a product rather than by becoming a part of the product.

RAC Associates is a car rental company that rents cars to customers in the United States. The company uses tracking devices and magnetic locks to prevent car theft. Such procedures are examples of ________.

To determine if an information system delivers net savings in costs, the cost of developing and operating the information system will need to be offset against the gains in reduced errors and reduced costs for paper, ink, and printing.

A business with a differentiation strategy will add cost to an activity only as long as the activity has a positive margin.

An information system that allows a cell phone user to limit the volume of data transferred through the Internet creates a competitive advantage as part of a product.

The competitive strategy of an organization is determined by its value chain.

Locking in customers by making it difficult or expensive for customers to move to another product is called establishing high ________.

Organizations can lock in customers by making it difficult or expensive for them to move to another product.

Organizations can lock in suppliers either by making it difficult to switch to another organization or by ________.

I-scream-4 Ice Cream recently faced competition against their flagship brand of "Orange peel ice cream." The competitor made significant inroads into this market by offering three varieties of "Orange peel ice cream." I-scream-4 Ice Cream decided to counter this threat by introducing five new varieties of ice creams. Which competitive strategy is I-scream-4 implementing?

Porter defined value as the ________.

In a manufacturing business, the materials ordering process transforms cash into a raw materials inventory.

An organization that minimizes the costs associated with the delivery of its products uses a product implementation strategy to obtain competitive advantage.

Employees often resist changes in business processes.

Each activity in a business process is a business function that receives inputs and produces outputs.

Dynotrix Motors is a large car-manufacturing company. The company purchases raw materials from many small-sized sellers across the globe. In this case, Dynotrix Motors is characterized by ________.

A group of shoe manufacturing firms purchases raw materials collectively from a single supplier to obtain better deals. This is an example of obtaining competitive advantage by ________.

An inventory of raw materials is an example of a repository.

A(n) ________ is a network of activities that generate value by transforming inputs into outputs.

A telecom service provider focusing on high-end users is following an industry-wide differentiation strategy.

Hueblue Software, an application provider to the gaming industry, decided to increase its portfolio by developing motion-control-enabled games for the mobile gaming industry. In this scenario, which competitive strategy is Hueblue Software implementing?

Bargaining power of customers is likely to be the highest for markets involving ________.

A database is an example of a ________.

The primary activity of sales and marketing is the collection, storage, and physical distribution of the products to the buyers.

An organization reducing operational costs is using product implementation to achieve competitive advantage.

FunText is a company that owns an app used for text messaging. It recently offered a membership extension of six months without any additional charges to its existing customers who had registered for a three-year membership. By doing this, which competitive strategy did FunText implement?

Reduction in production cost results in ________.

Which of the following factors determines the structure, features, and functions of an information system used in a company?

Which of the following value chain activities involves inducing buyers to purchase a product and providing a means for them to do so?

A large software manufacturer attempts to lock in customers by making it difficult for customers to change to another product. The strategy used by the company is referred to as ________.

Which of the following is considered a support activity in the value chain of a business?

Which of the following is a primary activity in the value chain?

A generic value chain consists of five primary activities and four support activities.

The International Zoological club publishes a monthly magazine for zoology enthusiasts. Members are required to pay an initial fee to cover the first two years of the subscription when registering with The International Zoological club. Which competitive advantage is the International Zoological club creating?

The cost of the business process is the sum of the cost of the inputs and the ________.

Establishing alliances with other organizations increases purchasing costs, though these alliances do provide competitive advantages.

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

An organization providing the lowest cost for a product or service across an industry segment is focusing on cost leadership.