Question 1

How does competitive strategy determine value chain structure?

Accepted Answer

Porter defined value as the amount of money that a customer is willing to pay for a resource,product,or service:A value chain is a network of value-creating activities:Organizations analyze the structure of their industry,and,using that analysis,they formulate a competitive strategy:They then need to organize and structure the organization to implement that strategy:If,for example,the competitive strategy is to be a cost leader,then business activities need to be developed to provide essential functions at the lowest possible cost:A business that selects a differentiation strategy would not necessarily structure itself around least-cost activities:Instead,such a business might choose to develop more costly systems,but it would do so only if those systems provided benefits that outweighed their risks.

Question 2

No matter what competitive strategy is being used,the value chain activities remain the same.

Accepted Answer

A) True 
 B)False  True

Question 3

If a value chain's margin is negative,the company must make some change.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following strategies is also called establishing high switching costs?

Accepted Answer

A)  increasing production 
B)  locking in suppliers 
C)  reducing costs 
D)  locking in customers 
A)  increasing production 
B)  locking in suppliers 
C)  reducing costs 
D)  locking in customers

Question 5

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

Accepted Answer

A)  equity 
B)  liability 
C)  overhead 
D)  margin 
A)  equity 
B)  liability 
C)  overhead 
D)  margin

Question 6

A company uses the outbound logistics activity to deliver the finished product to a customer.

Accepted Answer

A) True 
 B)False

Question 7

Customer service falls under the category of supporting activities in a value chain.

Accepted Answer

A) True 
 B)False

Question 8

How did Porter define technology,human resources,and firm infrastructure?

Accepted Answer

Porter defined technology broadly:It inc

Question 9

Describe Porter's five forces model.

Accepted Answer

Organizational strategy begins with an a

Question 10

A manufacturing system uses sales forecasts to plan production: It uses the production plan to determine raw material needs and then uses the material needs to schedule purchases: This ultimately leads to reduced inventory costs: Which of the following is being used to reduce the inventory cost?

Accepted Answer

A)  linkages 
B)  margins 
C)  competitive strategy 
D)  support activities 
A)  linkages 
B)  margins 
C)  competitive strategy 
D)  support activities

Question 11

According to Porter,to be effective,an organization's goals and activities must be consistent with the organization's strategy.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is least likely to be an outcome of organizations forming alliances with each other?

Accepted Answer

A)  promotion of product awareness 
B)  development of market size 
C)  establishment of standards 
D)  increase in purchasing costs 
A)  promotion of product awareness 
B)  development of market size 
C)  establishment of standards 
D)  increase in purchasing costs

Question 13

Briefly describe how organizational strategy determines the functions of information systems.

Accepted Answer

Organizations examine the structure of t

Question 14

Differentiate between value and margin.

Accepted Answer

Porter defined value as the amount of mo

Question 15

Value chains exist in service-oriented companies.

Accepted Answer

A) True 
 B)False

Question 16

If customers perceive the benefits of an alternative to be similar to that of a product,then the ________.

Accepted Answer

A)  switching cost is high 
B)  price of the product should be increased to retain market share 
C)  threat from the substitute is strong 
D)  customers' bargaining power decreases 
A)  switching cost is high 
B)  price of the product should be increased to retain market share 
C)  threat from the substitute is strong 
D)  customers' bargaining power decreases

Question 17

Which of the following is true of supporting activities?

Accepted Answer

A)  Their contribution toward a product's value is negligible. 
B)  Their contributions to margin can be calculated easily. 
C)  Customer service is considered a supporting activity. 
D)  Negotiation of prices is considered a supporting activity. 
A)  Their contribution toward a product's value is negligible. 
B)  Their contributions to margin can be calculated easily. 
C)  Customer service is considered a supporting activity. 
D)  Negotiation of prices is considered a supporting activity.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Two companies with the same value chain activities will have the same business processes.

Accepted Answer

A) True 
 B)False

Question 20

A firm introduces a new range of laptops that concentrate on delivering good graphics performance: Which of the following competitive strategies has the firm adopted if these laptops have relatively low prices?

Accepted Answer

A)  focus differentiation 
B)  focus low cost 
C)  industry-wide differentiation 
D)  industry-wide low cost 
A)  focus differentiation 
B)  focus low cost 
C)  industry-wide differentiation 
D)  industry-wide low cost

Exam 3: Organizational Strategy information Systems and Competitive Advantage

How does competitive strategy determine value chain structure?

No matter what competitive strategy is being used,the value chain activities remain the same.

If a value chain's margin is negative,the company must make some change.

Which of the following strategies is also called establishing high switching costs?

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

A company uses the outbound logistics activity to deliver the finished product to a customer.

Customer service falls under the category of supporting activities in a value chain.

How did Porter define technology,human resources,and firm infrastructure?

Describe Porter's five forces model.

A manufacturing system uses sales forecasts to plan production: It uses the production plan to determine raw material needs and then uses the material needs to schedule purchases: This ultimately leads to reduced inventory costs: Which of the following is being used to reduce the inventory cost?

According to Porter,to be effective,an organization's goals and activities must be consistent with the organization's strategy.

Which of the following is least likely to be an outcome of organizations forming alliances with each other?

Briefly describe how organizational strategy determines the functions of information systems.

Differentiate between value and margin.

Value chains exist in service-oriented companies.

If customers perceive the benefits of an alternative to be similar to that of a product,then the ________.

Which of the following is true of supporting activities?

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

Two companies with the same value chain activities will have the same business processes.

A firm introduces a new range of laptops that concentrate on delivering good graphics performance: Which of the following competitive strategies has the firm adopted if these laptops have relatively low prices?

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