59. The most successful solutions or methods for achieving a business objective are called
A) core competencies.
B) best processes.
C) best practices.
D) value activities.
60. How are information systems used at the industry level to achieve strategic advantage?
A) by encouraging the entry of new competitors
B) by enforcing standards that reduce the differences between competitors
C) by raising the bargaining power of suppliers
D) by building industry–wide, IT–supported consortia and symposia
61. A collection of independent firms that use information technology to coordinate their value chains to
produce a product or service for a market collectively is called a(n)
A) consortia.
B) value web.
C) business ecosystem.
D) industry value chain.
62. If two organizations pool markets and expertise that result in lower costs and generate profits it is often
referred to as creating
A) core competencies.
B) a value web.
C) a value chain.
D) synergies.
63. An example of synergy in business is
A) Walmart’s order entry and inventory management system to coordinate with suppliers.
B) Blockbuster combining traditional video rental with online video rental.
C) JP Morgan Chase’s mergers with other banks that provided JP Morgan with a network of retail
branches in new regions.
D) Amazon’s use of the Internet to sell books.
64. An information system can enhance core competencies by
A) creating educational opportunities for management.
B) providing better reporting facilities.
C) allowing operational employees to interact with management.
D) encouraging the sharing of knowledge across business units.
65. The more any given resource is applied to production, the lower the marginal gain in output, until a point is
reached where the additional inputs produce no additional output. This is referred to as
A) network inelasticity.
B) supply and demand.
C) the law of diminishing returns.
D) the point of no return.
66. Network economics
A) applies traditional economics to networked users.
B) applies the law of diminishing returns to communities of users.
C) sees the cost of adding new members as inconsequential.
D) balances the high cost of adding new members to a community against the lower cost of using network
infrastructure.
67. A virtual company
A) uses the capabilities of other companies without being physically tied to those companies.
B) uses Internet technology to maintain a virtual storefront.
C) provides entirely Internet–driven services, or virtual products.
D) uses Internet technology to maintain a networked community of users.
68. An example of a keystone firm within a business ecosystem is
A) Citibank and the ATM ecosystem.
B) GUESS and the fashion ecosystem.
C) Apple and software application writers in the mobile platform ecosystem.
D) American Airlines and the computerized reservation ecosystem.
69. The emergence, for Amazon.com, of new competitors in the sphere of online shopping illustrates what
disadvantage posed by the use of information systems to achieve competitive advantage?
A) E–commerce is affected by the law of diminishing returns.
B) Internet shopping produces cost transparency.
C) Internet technologies are universal, and therefore usable by all companies.
D) The Internet enables the production or sales of substitute products or services.
70. You are consulting for a beverage distributor who is interested in determining the benefits it could achieve
from implementing new information systems. What will you advise as the first step?
A) Benchmark existing systems.
B) Implement a strategic transition to the new system.
C) Identify the business ecosystem the distributor is in.
D) Perform a strategic systems analysis.
71. Capital and ________ are the primary production inputs that the organization uses to create products and
services.
72. Organizational ________ describes the divergent viewpoints about how resources, rewards, and
punishments should be distributed, and the struggles resulting from these differences.
73. New technologies that radically change the business landscape and environment are referred to as ________.
74. ________ is a competitive strategy for creating brand loyalty by developing new and unique products and
75. ________ are the expenses incurred by a customer or company in lost time and resources when changing
from one supplier or system to a competing supplier or system.
76. The ________ model highlights the primary or support activities that add a margin of value to a firm’s
products or services where information systems can best be applied to achieve a competitive advantage.
77. A(n) ________ activity is a part of the organization’s infrastructure, human resources, technology, and
procurement that makes the delivery of the firm’s products or services possible.
78. A(n) ________ is a collection of independent firms that use information technology to coordinate their value
chains to collectively produce a product or service for a market.
79. A(n) ________ is an activity at which a firm excels as a world–class leader.
80. Sociotechnical changes affecting a firm adopting new information systems requiring organizational change
can be considered ________.
81. Differentiate between the technical and behavioral definitions of an organization.
82. List three organizational factors that can prevent a firm in fully realizing the benefits of a new information
system, and provide examples for each.
83. You are advising the owner of Smalltown Computer, a new, local computer repair store that also builds
custom computers to order. What competitive strategies could Smalltown Computer exert? Which ones will
it have difficulty exercising?
84. You are consulting with the owner of Better Bodies, a national chain of gyms. What strategies might Better
Bodies use in applying information services to achieve a competitive advantage?
85. The text describes Michael Porter’s view of the Internet as somewhat negative. What negative influences
does Porter see? Describe several positive influences the Internet has on business. Do these outweigh the
negative influences?
86. Value chain analysis is useful at the business level to highlight specific activities in the business where
information systems are most likely to have a strategic impact. Discuss this model, identify the activities, and
describe how the model can be applied to the concept of information technology.
87. How is the concept of core competency relevant to Smalltown computer, a local computer repair store that
builds custom computers? Give examples.
88. How is Internet technology useful from a network economics perspective? Give examples.
89. Define and describe a business ecosystem. Give an example of a business ecosystem.
90. Describe in detail the major factors to determine when performing a strategic systems analysis.