IS Chapter 2 – Flashcards

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FALSE
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Network externalities exist when a product or service becomes less expensive as more people use it. TF
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FALSE
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According to Michael Porter, the reason many firms suffer margin-eroding competition is because they have defined themselves according to strategic positioning rather than operational effectiveness. TF
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Technological improvements can be copied by rivals, leading to a profit-eroding arms race.
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Which of the following statements about technology is true?
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spread across increasing units of production.
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Businesses benefit from economies of scale when the cost of an investment can be:
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TRUE
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Timing and technology alone will not yield sustainable competitive advantage. TF
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Brand
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A(n) _____ is the symbolic embodiment of all the information connected with a product or service.
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Turning inputs into products or services
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As one of the primary components of the value chain, operations involves:
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FALSE
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Market entry is the same as building a sustainable business. TF
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performing the same tasks better than rivals perform them.
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Operational effectiveness refers to:
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Viral Marketing
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Leveraging consumers to promote a product or service is known as _____.
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FALSE
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A trademark is the symbolic embodiment of all the information connected with a product or service of a firm. TF
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Price transparency increases while information asymmetry decreases.
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How does the Internet typically impact price transparency and information asymmetry?
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TRUE
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Cisco's acquisition of Pur Digital, makers of the Flip video camera line, was largely considered a flop because comparable technology soon became a feature in other popular consumer electronics products. TF
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Straddling
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A firm is said to be _____ when it attempts to match the benefits of a successful position while maintaining its existing position.
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Dense Wave Division Multiplexing
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In _____, the light inside fiber is split into different signal-carrying wavelengths in a way similar to how a prism splits light into different colors.
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search costs; quality; trust
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A strong brand can be an exceptionally powerful resource for competitive advantage by lowering ________, proxying _____ and inspiring _____.
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FALSE
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In the United States, business models cannot be patented because the field of business is extremely dynamic. TF
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Distribution Channels
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The paths through which products or services get to customers are known as _____.
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resource-based thinking can help avoid the trap of carelessly entering markets simply because growth is spotted.
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Many telecom firms began digging up the ground and laying webs of fiberglass to meet the growing demand for Internet connectivity. However, rivals and startups began to imitate these firms and soon these new assets were not so rare and each day they seemed to be less valuable. It can be inferred from this example that:
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Sustainable Competitive Advantage
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A firm's financial performance that consistently outperforms its industry's peers is known as _____.
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