Electronic Commerce 2012 7E Test Bank Chapter 12

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Electronic Commerce 2012, 7e (Turban)

Chapter 12 EC Strategy, Globalization, and SMEs

12.1 True/False

Question: Travelocitys initial strategy was to concentrate on airline ticketing, hotel

booking, and selling advertisements on its Web site. This business model worked very well

until the airlines eliminated travel agents commissions and competitors entered the market

successfully.

Answer:

Question: Strategies are based on performance indexes that are used as targets and

measures of success.

Answer:

Question: An organizational strategy is a detailed plan for how a business is going to

accomplish its mission, what its goals should be, and what plans and policies it will need

to accomplish these goals.

Answer:

Question: Any contemporary strategy-setting process must include the Internet.

Answer:

Question: In Porters view, the majority of the Internets impacts on the five competitive

forces have been positive.

Answer:

Question: Regardless of organizational size, the strategic planning process forces

executives, general managers, or business owners to assess the current position of the firm,

where it should be, and how to get from here to there.

Answer:

Question: In the strategy initiation phase, the organization examines itself, its environment,

and the potential contribution that the Internet and other emerging technologies can make

to the business.

Answer:

Question: A value proposition is actually a financial statement that summarizes the annual

revenue and profit targets.

Answer:

Question: The two major and successful Internet-based businesses, Google and eBay, have

similar core competencies.

Answer:

Question: In the strategy implementation phase, general long-term plans are developed for

carrying out the projects that had been agreed on in the strategy formulation phase.

Answer:

Question: Resource allocation refers to the process of making the selected applications and

projects a reality, such as hiring staff; purchasing equipment; licensing, purchasing, or

writing software; and contracting vendors.

Answer:

Question: Strategy assessment is the continuous evaluation of progress toward the

organizations strategic goals, resulting in corrective action and, if necessary, strategy

reformulation.

Answer:

Question: The basic method in scenario planning is that a group of analysts generates

simulation games for policy makers. The games combine projected factors about the

future, such as demographics, geography, and industrial information with plausible

alternative social, technical, economic, and political trends.

Answer:

Question: A competitor analysis grid is a methodology that surveys external opportunities

and threats and relates them to internal strengths and weaknesses.

Answer:

Question: Strategy maps represent a hypothetical model of a business or one of the focus

areas of the business.

Answer:

Question: A business plan is a tool that is an alternative to narrowly focused financial

assessments that measures organizational performance in four areas: finance, customers

assessments, internal business processes, and learning and growth.

Answer:

Question: In e-commerce, evidence shows that there is always a real advantage to being

the first mover in an industry or market segment.

Answer:

Question: The disadvantages a brick-and-mortar company faces by creating an

independent online division are that it may be very costly, risky, or both.

Answer:

Question: Disintermediation is the process by which the consumer bypasses the services of

an intermediary or intermediaries in the chain of distribution to purchase products directly

from those who supply or produce them.

Answer:

Question: Marketers are increasingly using social networking tools in a wide range of

activities, including advertising, public relations, customer service, and product

development.

Answer:

Question: Risk management plans are a specific outcome associated with the strategy

implementation process.

Answer:

Question: In a click-and-mortar business, the allocation of resources between offline and

online activities can create difficulties, especially in sell-side projects because the two

activities could be competitors.

Answer:

Question: Having a strong project champion on an e-commerce project is seldom

important to the success of the project because of interpersonal conflicts caused by a

powerful champion.

Answer:

Question: E-collaboration is the use of an external vendor to provide all or part of the

products and services that could be provided internally.

Answer:

Question: Outsourcing can create strategic advantages for firms in that it provides access

to highly skilled, low-cost labor and provides potential market opportunities.

Answer:

Question: An internal issue many firms face at the strategic alignment stage is the need to

change business processes to accommodate the changes an EC strategy brings.

Answer:

Question: Business process management is a method for business restructuring that

combines workflow systems and redesigned methods. It covers three process categories

including people-to-people, systems-to-systems, and systems-to people interactions.

Answer:

Question: Identifying failing projects as soon as possible and determining why they failed

to avoid the same problems on subsequent projects is an important strategic

implementation objective.

Answer:

Question: The use of key performance indicators makes assessing EC easy.

Answer:

Question: A metric is a specific, measurable standard against which actual performance is

compared.

Answer:

Question: A major advantage of EC is the ability to do business at any time, from

anywhere, and at a reasonable cost.

Answer:

Question: One of the most contentious areas of global EC is the resolution of international

legal issues.

Answer:

Question: The geographical issues of shipping goods and services across international

borders are not well known.

Answer:

Question: By using a currency exchange service, it is feasible to offer prices and payments

in all currencies.

Answer:

Question: Social networking sites are a particular good fit for smaller businesses because

SMEs often do not have a peer group nearby with which to discuss relevant topics.

Answer:

Question: For ________ companies, it may be even more important to change strategies

quickly.

A) traditional

B) pure play

C) service

D) retail

Answer:

Question: A broad-based formula for how a business is going to accomplish its mission,

what its goals should be, and what plans and policies will be needed to carry out those

goals best defines

A) strategy.

B) business case.

C) business focus.

D) business objective.

Answer:

Question: The formulation and execution of a vision of how a new or existing company

intends to do business electronically best defines

A) e-commerce policy.

B) e-commerce strategy.

C) e-commerce case.

D) e-commerce focus.

Answer:

Question: General strategies for competitive advantage include each of the following

except

A) customer or supplier lock-in.

B) entry barriers.

C) stabilization.

D) growth.

Answer:

Question: Technological e-commerce challenges include each of the following except

A) cost.

B) integration.

C) software standards.

D) distrust.

Answer:

Question: A process for developing a strategy and plans for aligning information systems

with the organizations business strategies best defines

A) business planning.

B) business case.

C) strategic information systems planning.

D) strategic alignment.

Answer:

Question: The initial phase of strategic planning in which the organization examines itself

and its environment best defines

A) value proposition.

B) feasibility study.

C) strategic alignment.

D) strategy initiation.

Answer:

Question: Each of the following about the strategic planning process is true except

A) the strategic planning process is cyclical and continuous.

B) the process of developing a strategy may be even more important than the strategy.

C) the strategic planning process forces corporate executives, a companys general

manager, or a small business owner to assess the current position of the firm, where it

should be, and how to achieve objectives.

D) the strategic planning process begins with strategy formulation.

Answer:

Question: A specific outcome of the strategy initiation phase is the ________, which

includes the vision, mission, value proposition, goals, capabilities, constraints, strengths,

and weaknesses of the company.

A) company analysis

B) value proposition

C) core competency

D) functional strategy

Answer:

Question: Specific outcomes from the strategy initiation phase include each of the

following except

A) competitor analysis.

B) forecasts.

C) day-to-day operations.

D) company analysis.

Answer:

Question: A specific outcome of the strategy initiation phase is a clear statement of the

companys ________, which summarizes the customer segment, competitor target, and the

core differentiation of ones product from the offerings of competitors.

A) company analysis

B) value proposition

C) core competency

D) functional strategy

Answer:

Question: The unique combination of resources, experiences, and expertise within a

particular firm is called their

A) corporate strategy.

B) core competencies.

C) functional strategy.

D) competitive advantage.

Answer:

Question: Projections of the business technological, political, economic, and other

environments are called

A) forecasts.

B) SWOT analysis.

C) competitive intelligence.

D) value propositions.

Answer:

Question: The development of strategies to exploit opportunities and manage threats in the

business environment in light of corporate strengths and weaknesses best defines

A) strategy alignment.

B) strategy formulation.

C) strategy initiation.

D) strategy completion.

Answer:

Question: Which of the following involves scanning the business environment to collect

and interpret relevant information about direct competitors, indirect competitors, and

potential competitors?

A) environmental evaluation

B) competitor evaluation

C) corporate espionage

D) competitor analysis

Answer:

Question: Specific activities and outcomes from strategy formulation include each of the

following except

A) risk analysis, assessment, and management.

B) cost-benefit analysis.

C) project plan.

D) business plan.

Answer:

Question: Googles ________ is its expertise in information search technology.

A) company analysis

B) value proposition

C) core competency

D) functional strategy

Answer:

Question: Many of the outcomes from the first two phases of the strategic planning

process, such as a determination of goals, competitor analysis, strategic opportunities, and

risk analysis come together in a ________.

A) technology audit

B) SWOT plan

C) value proposition

D) business plan

Answer:

Question: ________ is the process of making the selected applications and projects a

reality by hiring staff; purchasing equipment; licensing, purchasing, or writing software;

and contracting vendors.

A) Project management

B) Resource allocation

C) Project planning

D) Strategy assessment

Answer:

Question: ________ is the continuous evaluation of progress toward the organizations

strategic goals, resulting in corrective action and, if necessary, strategy reformulation.

A) SWOT analysis

B) Competitor analysis grid

C) Scenario planning

D) Strategy assessment

Answer:

Question: Specific activities and outcomes from strategy implementation include

A) resource allocation.

B) identifying business opportunities.

C) creating a business plan.

D) company analysis.

Answer:

Question: A tool that delineates the relationships among the key organizational objectives

for all four BSC perspectives defines

A) business plan.

B) competitor analysis.

C) SWOT analysis.

D) strategy map.

Answer:

Question: An analytical tool in which a company looks for points of differentiation

between competitors and itself is called

A) SWOT analysis.

B) competitor analysis grid.

C) scenario planning.

D) strategy assessment.

Answer:

Question: A methodology that surveys external opportunities and threats and relates them

to internal strengths and weaknesses best defines

A) business case.

B) business plan.

C) SWOT analysis.

D) competitor analysis grid.

Answer:

Question: A strategic planning methodology that generates plausible alternative futures to

help decision makers identify actions that can be taken today to ensure success in the

future best defines

A) business case.

B) communications matrix.

C) information systems planning.

D) scenario planning.

Answer:

Question: A management tool that assesses organizational progress toward strategic goals

by measuring performance in a number of different areas is

A) balanced scorecard.

B) BCG growth-share matrix.

C) SWOT analysis.

D) Web analytics.

Answer:

Question: After four years in business, a magazine publisher decides to add the online

distribution of its magazine to its existing traditional publishing business. The company

would need to develop a

A) business strategy.

B) business plan.

C) business case.

D) business metric.

Answer:

Question: The risks of being a first mover include each of the following except

A) the high cost of pioneering EC initiatives.

B) the chance that a second wave of competitors will eliminate a first movers lead through

lower cost and innovation.

C) the risk that the move will be too late.

D) over the long run, first movers being substantially less profitable than followers.

Answer:

Question: Factors that determine whether a first mover succeeds or fails in the EC

marketplace include each of the following except

A) the size of the opportunity.

B) the speed of market entry.

C) the nature of the product.

D) whether the company can be the best in the market.

Answer:

Question: Separating a companys online operations into a new company makes sense in

each of the following situations except

A) when the volume of anticipated e-business is large.

B) when the subsidiary can be created without dependence on current operations and

legacy systems.

C) when the company is unable to form new alliances, attract new talent, or raise

additional funding.

D) when a new business model needs to be developed apart from the constraints of current

operation.

Answer:

Question: When planning a successful online EC strategy that includes social media, an

important issue to consider is

A) develop a consistent online and offline brand strategy.

B) sell globally as well as locally.

C) effectively market to existing customers.

D) all of the above.

Answer:

Question: Which of the following can occur when a company waits to see what

competitors in the industry do?

A) market-driven strategy

B) competitor-driven strategy

C) technology-driven strategy

D) second-mover strategy

Answer:

Question: The most dangerous risk to a company engaged in e-commerce is

A) threats posed by hackers.

B) business risk.

C) negligent loss of data.

D) customer and business partner risk.

Answer:

Question: The likelihood that a negative outcome will occur in the course of developing

and operating an electronic commerce strategy best defines

A) business risk.

B) technology risk.

C) e-commerce risk.

D) competitor risk.

Answer:

Question: Security issues that need to be considered when setting an EC strategy include

A) accidental alterations to or destruction of electronic information and records.

B) costs to mitigate a covered loss.

C) liability for damage to a third-partys computer system.

D) all of the above.

Answer:

Question: The ________ pricing strategy means adding up all the costs involved, such as

material, labor, rent, overhead, and so forth, and adding a percentage mark-up as profit.

A) cost-plus

B) competitor model

C) revenue markup

D) price percentage

Answer:

Question: Selling the same good, but with different selection and delivery characteristics

best defines

A) channel marketing.

B) versioning.

C) selective distribution.

D) cost-plus marketing.

Answer:

Question: Internet technologies can provide consumers with easier access to pricing

information, which increases their bargaining power. To remain competitive and profitable,

sellers need smarter pricing strategies, which include each of the following strategies

except

A) greater precision in setting prices.

B) more adaptability in changing prices.

C) new ways of customer segmentation for differentiated pricing.

D) reducing prices.

Answer:

Question: The person who ensures the EC project gets the time, attention, and resources

required and defends the project from detractors at all times best defines

A) project gladiator.

B) project manager.

C) project champion.

D) project referee.

Answer:

Question: A methodology for conducting a comprehensive redesign of an enterprises

processes best defines

A) business case.

B) corporate makeover.

C) redesign strategy.

D) business process reengineering.

Answer:

Question: The most important objectives of strategic assessment include each of the

following except

A) measure the extent to which the EC strategy and ensuing projects are delivering what

they were supposed to deliver.

B) determine if the EC strategy and projects are still viable in the current environment.

C) reassess the initial strategy in order to learn from mistakes and improve future planning.

D) identify what competitors are doing to avoid head-on competition.

Answer:

Question: A quantifiable measurement, agreed to beforehand, that reflects the critical

success factors of a company, department or project best defines

A) key performance indicator.

B) dashboard measurement.

C) spot check.

D) splog.

Answer:

Question: Advanced performance measuring and analysis approach that embraces planning

and strategy best defines

A) metric.

B) key performance indicator.

C) corporate performance management.

D) dashboard.

Answer:

Question: With the balanced scorecard approach, the term balance arises because the

combined set of measures is supposed to encompass indicators that are each of the

following except

A) core and non-core.

B) financial and nonfinancial.

C) leading and lagging.

D) quantitative and qualitative.

Answer:

Question: The analysis of clickstream data to understand visitor behavior on a website best

defines

A) clickstream tracking.

B) cookies.

C) splogging.

D) web analytics.

Answer:

Question: List five general strategies for competitive advantage.

Answer:

Question: Identify three technological and three nontechnological e-commerce challenges.

Answer:

Question: Identify five security issues to consider when setting an EC strategy.

Answer:

Question: Briefly discuss three suggestions on how to break down the barriers to global

EC.

Answer:

Question: Identify three advantages and three disadvantages of EC for small and

medium-sized businesses.

Answer: