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Essentials of MIS, 12e (Laudon)
Chapter 3 Achieving Competitive Advantage with Information Systems
1) Which of the following is not one of the competitive forces in Porter’s model?
A) Suppliers
B) Other competitors
C) External environment
D) Customers
E) Technology
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
2) A manufacturer of deep-sea oil rigs may be least concerned about which of these marketplace
forces?
A) Product differentiation
B) Traditional competitors
C) Low number of suppliers
D) New market entrants
E) Substitute products
AACSB: Analytical Thinking
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
3) Which of the following industries has the lowest barrier to entry?
A) Automotive
B) Computer chip
C) Small retailer
D) Airline
E) Solar energy
AACSB: Analytical Thinking
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
2
4) All of the following could be considered substitute products for industrial electricity
generation except:
A) solar.
B) wind.
C) coal.
D) hydro-power.
E) ethanol.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
5) Which of the following can force a business and its competitors to compete on price alone?
A) High product differentiation
B) Poor process efficiency
C) Demand control
D) Transparent marketplace
E) Multiple competing suppliers
AACSB: Analytical Thinking
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
6) A firm can exercise greater control over its suppliers by having:
A) more suppliers.
B) fewer suppliers.
C) global suppliers.
D) local suppliers.
E) only a single supplier.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
3
7) Which of the following is not one of the four basic strategies a company can employ to deal
with competitive forces?
A) Strengthen customer and supplier intimacy
B) Focus on market niche
C) Differentiate products
D) Compete on employee loyalty
E) Low-cost leadership
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
8) Walmart’s continuous replenishment system allows it to do all of the following except:
A) provide mass customization.
B) transmit orders to restock directly to its suppliers.
C) keep costs low.
D) better meet customer demands.
E) fine-tune merchandise availability.
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
9) Which of the following illustrates the use of information systems to achieve product
differentiation?
A) A hot tub dealer’s use of information systems to determine which models and options its
customers are most likely to buy
B) A shoe manufacturer’s use of information systems in selling custom, made-to-order shoes
directly to customers
C) A PC manufacturer’s use of information systems to facilitate direct access from suppliers to
production schedules
D) A grocery store chain’s use of information systems to produce products and services at a
lower price than competitors
E) A hotel chain’s use of information systems to analyze detailed data on guests to determine
each guest’s profitability
AACSB: Analytical Thinking; Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
4
10) Which of the following illustrates the use of information systems to strengthen customer and
supplier intimacy?
A) A hot tub dealer’s use of information systems to determine which models and options its
customers are most likely to buy
B) A shoe manufacturer’s use of information systems in selling custom, made-to-order shoes
directly to customers
C) A PC manufacturer’s use of information systems to facilitate direct access from suppliers to
production schedules
D) A grocery store chain’s use of information systems to produce products and services at a
lower price than competitors
E) An airline’s use of information systems to analyze detailed data on customers to determine
each customer’s profitability
AACSB: Analytical Thinking; Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
11) Which of the following illustrates the use of information systems to focus on market niche?
A) A hot tub dealer’s use of information systems to determine which models and options its
customers are most likely to buy
B) A shoe manufacturer’s use of information systems in selling custom, made-to-order shoes
directly to customers
C) A PC manufacturer’s use of information systems to facilitate direct access from suppliers to
production schedules
D) A grocery store chain’s use of information systems to produce products and services at a
lower price than competitors
E) An airline’s use of information systems to analyze detailed data on customers to determine
each customer’s profitability
AACSB: Analytical Thinking; Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
5
12) When a firm provides a specialized product or service for a narrow target market better than
competitors, they are using a ________ strategy.
A) product differentiation
B) market niche
C) mass customization
D) process efficiency
E) market transparency
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
13) ________ is the ability to offer individually tailored products or services using the same
production resources as bulk production.
A) Mass customization
B) Size customization
C) Personalization
D) Demand customization
E) CAD
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
14) An information system can enable a company to focus on a market niche through:
A) complex trend forecasting.
B) tailoring products to the client.
C) intensive product trend analysis.
D) intensive customer data analysis.
E) tightening linkages with suppliers.
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
6
15) Hilton Hotels’ use of customer information software to identify the most profitable customers
to direct its services to is an example of using information systems to:
A) strengthen customer intimacy.
B) differentiate their service.
C) focus on market niche.
D) increase efficiency.
E) provide services at a lower price than its competitors.
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
16) According to the chapter case, the Nike+ ecosystem is part of which of the following larger
phenomena?
A) The Internet of Things
B) 3-D printing
C) CAD
D) TQM
E) BPR
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
17) To what competitive force did the printed encyclopedia industry succumb?
A) Positioning and rivalry among competitors
B) Low cost of entry
C) Substitute products or services
D) Increased bargaining power of customers
E) Increased bargaining power of suppliers
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
7
18) Internet technology:
A) makes it easy for rivals to compete on price alone.
B) imposes a significant cost of entry, due to infrastructure requirements.
C) increases the difference between competitors because of the wide availability of information.
D) makes it easy to sustain operational advantages.
E) has lessened competitive rivalries.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
19) The Internet raises the bargaining power of customers most effectively by:
A) creating new opportunities for building loyal customer bases.
B) making more products available.
C) making information available to everyone.
D) lowering transaction costs.
E) reducing barriers to entry.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
20) The value chain model:
A) categorizes five related advantages for adding value to a firm’s products or services.
B) sees the supply chain as the primary activity for adding value.
C) categorizes four basic strategies a firm can use to enhance its value chain.
D) helps a firm identify points at which information technology can most effectively enhance its
competitive position.
E) focuses primarily on collaboration with suppliers.
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
8
21) All of the following are considered primary activities of a firm except:
A) inbound logistics.
B) sales and marketing.
C) procurement.
D) service.
E) outbound logistics.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
22) The support activities of a firm include:
A) inbound logistics, technology, outbound logistics, sales and marketing, and service.
B) inbound logistics, organization infrastructure, outbound logistics, technology, and
procurement.
C) organization infrastructure, human resources, sales and marketing, and technology.
D) organization infrastructure, human resources, technology, and procurement.
E) sales and marketing, procurement, human resources, and technology.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
23) Benchmarking:
A) compares the efficiency and effectiveness of your business processes against strict standards.
B) allows industry participants to develop industry-wide standards.
C) is used to measure the speed and responsiveness of information technology.
D) synchronizes the business processes of customers, suppliers, and trading partners.
E) coordinates the value chains of independent firms to enable them to collectively produce a
product or service.
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
9
24) The most successful solutions or methods for achieving a business objective are called:
A) core processes.
B) best processes.
C) benchmarks.
D) best practices.
E) value webs
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
25) Which of the following is not a true statement about value webs?
A) Value webs involve a collection of independent firms that use information technology to
coordinate their value chains.
B) Value webs are more customer-driven than traditional value chains.
C) Value webs operate in a less linear fashion than traditional value chains..
D) Value webs are inflexible and cannot adapt quickly to changes in supply and demand.
E) Value webs involve highly synchronized industry value chains.
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
26) A ________ is a collection of independent firms that use information technology to
coordinate their value chains to produce a product or service for a market collectively.
A) value chain
B) business network
C) value web
D) consortia
E) supply chain
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
10
27) How are information systems used at the industry level to achieve strategic advantage?
A) By building industry-wide, IT-supported consortia and symposia
B) By raising the bargaining power of suppliers
C) By encouraging the entry of new competitors
D) By enforcing standards that reduce the differences between competitors
E) By enabling companies to develop customer intimacy
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
28) When the output of some units can be used as inputs to other units, or if two organizations
pool markets and expertise that result in lower costs and generate profits, ________ are created.
A) value webs
B) value chains
C) synergies
D) core competencies
E) benchmarks
AACSB: Application of Knowledge
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?
29) An information system can enhance core competencies by:
A) providing better reporting facilities.
B) creating educational opportunities for management.
C) allowing operational employees to interact with management.
D) encouraging the sharing of knowledge across business units.
E) synchronizing the value chains of business partners with an industry.
AACSB: Information Technology
LO: 3.1: How do Porter’s competitive forces model, the value chain model, synergies, core
competencies, and network-based strategies help companies use information systems for
competitive advantage?