Deck 3: Information Systems for Competitive Advantage

Question 1

The value of accumulating raw materials is in the value of the raw materials itself.

Answer 1

False

Question 2

A business that selects a differentiation strategy would necessarily structure itself around least-cost activities.

Answer 2

False

Question 3

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

Answer 3

True

Question 4

A generic value chain consists of five primary activities and four support activities.

Question 5

Each stage of the generic value chain accumulates costs and adds value to the product.The net result of this process is the total margin of the chain.

Question 6

Porter's five forces model that is used to assess an industry structure is also referred to as the value chain model.

Question 7

The primary activity of sales and marketing is the collection,storage,and physical distribution of the products to the buyers.

Question 8

An organization responds to the structure of its industry by choosing a competitive strategy.

Question 9

The structure of business processes determines the design of supporting information systems.

Question 10

The value chain of an organization determines its competitive strategy.

Question 11

In the value chain,the primary activity of customer service is concerned with inducing the buyers to purchase the product and providing a means for them to do so.

Question 12

Porter defines value as the amount of money that a customer is willing to pay for a resource,product,or service.

Question 13

Organizational strategy begins with an assessment of the fundamental characteristics of a business process.

Question 14

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

Question 15

According to Porter's five forces model,the examination of the forces is the result of the competitive strategy.

Question 16

A telecom service provider focusing on high-end users is following an industry-wide differentiation strategy.

Question 17

According to Porter's five forces model,the intensity of each of the forces determines the characteristics of the industry,how profitable it is,and how sustainable that profitability will be.

Question 18

Porter's definition of human resources includes general management and government affairs.

Question 19

In the inbound logistics activity of a value chain,the manufacturer receives,stores,and disseminates inputs to the product.

Question 20

A furniture dealer offering a wide variety of new designs is following an industry-wide cost leadership strategy.

Question 21

Manufacturing systems use linkages to reduce inventory costs.

Question 22

It would be difficult to calculate the margin of supporting activities because the specific value added by supporting activities is difficult to know.

Question 23

The central idea of business process design is that organizations should automate or improve their existing functional systems.

Question 24

In Porter's model of business activities,business processes are interactions across value activities.

Question 25

Streamlining of business processes to increase margin is key to competitive advantage.

Question 26

The primary activities in the generic value chain contribute indirectly to the production,sale,and service of the product.

Question 27

"Facilities" may be considered as resources at rest.

Question 28

In a manufacturing business,the materials ordering process transforms cash into raw materials inventory.

Question 29

The manufacturing process transforms finished goods into cash.

Question 30

Business processes that span value-generating activities determine the scope and requirements of each organization's information systems.

Question 31

Porter's definition of human resources includes general management,finance,accounting,legal,and government affairs.

Question 32

Support activities in a value chain may include the processes of finding vendors,setting up contractual arrangements,and negotiating prices.

Question 33

Each activity in a business process transforms input resources into output resources.

Question 34

Most of the value in a service company is generated by inbound and outbound logistics.

Question 35

Supporting functions of the value chain generally do not add value to the product.

Question 36

In a manufacturing company,inbound and outbound logistics do not impact the value generated.

Question 37

An organization's bank accounts are an example of a facility of cash at rest.

Question 38

Business process design favors the creation of new,more efficient business processes that integrate the activities of all departments involved in a value chain.

Question 39

Porter's attempt to create integrated,cross-departmental business systems led to the creation of a new discipline called business process design.

Question 40

A flow is a network of activities that generate value by transforming inputs into outputs.

Question 41

An organization's goals and objectives are determined by its ________.

A)information systems
B)business processes
C)competitive strategy
D)brand image

Question 42

The newly implemented information system at HTM Logistics Inc.makes it easy to place an order and reduces error.This is an example of how information systems can help in the competitive strategy by enhancing the service.

Question 43

Organizational strategy begins with an assessment of the ________.

A)organizational goals and objectives
B)organizational strategy
C)fundamental characteristics and structure of an industry
D)business processes of the organization

Question 44

The digital divide separates those who have Internet access and those who don't.

Question 45

Which of the following represent the correct sequence of events in the value chain?

A)competitive strategy;value chain;business process;information systems
B)business process;information systems;value chain;competitive strategy
C)value chain;competitive strategy;information process;business process
D)information systems;business process;competitive strategy;value chain

Question 46

The competitive strategy of locking in customers is sometimes called establishing high switching costs.

Question 47

Organizations can lock in customers by making it difficult or expensive for them to move to another product.

Question 48

Porter's five forces model states that the intensity of the competitive forces determines all of the following except industry ________.

A)competition
B)profitability
C)segmentation
D)characteristics

Question 49

Which of the following has a high threat of substitution?

A)Darunavir,an anti-HIV treatment
B)Dell's purchase of hard drives
C)choice of a ticket for the 2012 Olympics
D)choice of domestic airlines

Question 50

Which of the following situations represents a strong bargaining power of suppliers?

A)oil-exporting countries during a low price season for gas
B)coffee farmers during a frost season
C)fashion outlet during recessionary times
D)bank liquidating during fire sale

Question 51

N-joi Ice Creams was facing competition to their flagship brand of "black sesame soft ice-cream" from their immediate competition which offered three varieties of "black sesame soft ice-cream." N-joi decides to counter the threat by bringing out five new variants at a reduced introductory price.Which competitive strategy is N-joi implementing?

A)cost leadership
B)product differentiation
C)cost differentiation in the segment
D)service focus

Question 52

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

A)margin
B)break-even point
C)revenue
D)value-addition

Question 53

An organization responds to the structure of its industry by choosing a ________.

A)brand image
B)competitive strategy
C)business process
D)media policy

Question 54

Which of the following is incorrect with regard to the process of organizational strategy formulation?

A)Organizational goals and objectives determine the competitive strategy.
B)The strategy determines the value chains.
C)The value chains determine the business processes.
D)The business processes determine the structure of the information systems.

Question 55

KlenZing Services,a pest control firm,aims to increase customer loyalty by offering extra services like fumigation and window cleaning free for three months after an order.Which of the five forces in Porter's model is Klenzing addressing here?

A)threat of new entrants
B)bargaining power of suppliers
C)bargaining power of customers
D)threat of substitution

Question 56

A GPS-powered navigation system fitted to a new brand of car is an example of using product implementation principle for competitive strategy.

Question 57

The threat of new entrants is low for ________.

A)used car dealerships
B)convenience store
C)ivy league universities
D)corner latte shops

Question 58

An information system implemented to enhance a service does not allow for service differentiation.

Question 59

The competitive strategy of creating entry barriers can increase cash which can fund further infrastructure development for even greater competitive advantage.

Question 60

Porter defined ________ as the amount of money that a customer is willing to pay for a resource,product,or service.

A)price
B)premium
C)value
D)markup

Question 61

In a business process,each ________ transforms input resources into output resources.

A)flow
B)activity
C)design
D)department

Question 62

Which activity does ordering and receiving agreement-based materials belong to in the value chain?

A)inbound logistics
B)procurement
C)operations
D)outbound logistics

Question 63

Lynn is going through this week's delivery schedule.She calls her team and assigns territories for each executive.She contacts the fleet supervisor to arrange trucks for transportation.Which activity of the value chain is Lynn executing?

A)marketing
B)customer service
C)outbound logistics
D)marketing

Question 64

The new discipline that evolved out of Porter's work on value chains is called ________.

A)business process design
B)value-addition chain
C)value engineering
D)business reengineering

Question 65

The central idea of business process design is that ________.

A)existing processes should be improved or automated to create a new value chain.
B)business processes should be delinked to focus on their core competencies.
C)organizations should not automate or improve existing functional systems.
D)integrated,cross-functional business systems decrease efficiency of existing functional systems.

Question 66

Which of the following is true of value chain analysis in a service organization?

A)Value chain analysis has no direct application to service businesses.
B)Most of the value in a manufacturing company is generated by the operations,marketing and sales,and service activities.
C)Inbound logistics is the function that creates most value in service organizations.
D)Outbound logistics is the function that creates most value in service-oriented companies.

Question 67

Mae manages delivery at a custom-kitchen outlet.Working on her customer's specifications,she contacts Gem Cabinets and places an order for a full-motion type wall mount.Which of the primary activities is Mae executing here?

A)inbound logistics
B)operations
C)customer service
D)marketing

Question 68

All of the following are examples of support activities except ________.

A)procurement
B)customer service
C)contract negotiation
D)price negotiation

Question 69

________ can be considered resources at rest.

A)Processes
B)Facilities
C)Inputs
D)Outputs

Question 70

In a manufacturing business scenario,the ________ process transforms cash into a raw material inventory and the ________ process transforms finished goods into cash.

A)manufacturing;outbound logistics
B)sales;inbound logistics
C)materials ordering;sales
D)inbound logistics;materials ordering

Question 71

Which of the following is not part of Porter's definition of human resource management?

A)general management
B)compensation
C)recruitment
D)employee evaluation

Question 72

Which of the following is not an example of primary activities in the value chain?

A)operations
B)procurement
C)marketing
D)customer service

Question 73

A ________ is a network of value-creating activities.

A)value pyramid
B)value system
C)value network
D)value chain

Question 74

According to Porter's model of business activities,________ are interactions across value activities.

A)value-additions
B)support activities
C)linkages
D)cross-functionalities

Question 75

Which of the following is not an example of a facility?

A)contractual agreement with a vendor
B)current account with a bank
C)candidates appearing for recruitment
D)stockholding in a startup company

Question 76

Porter's definition of firm infrastructure includes all of the following except ________.

A)general management
B)finance and accounting
C)employee evaluation
D)government affairs

Question 77

The net result of the difference between the total value added and the total costs incurred is the ________ of the chain.

A)value
B)total margin
C)total premium
D)profit

Question 78

Which of the following is a support activity in the value chain?

A)receiving inputs to operationalize the production
B)distributing the products to the buyers
C)assisting customer's use of the service
D)setting up contractual arrangements for production

Question 79

________ argues that firms should create new,more efficient business processes that integrate the activities of all departments involved in a value chain.

A)Value chain model
B)Business process design
C)Business process reengineering
D)Five forces model

Question 80

The ________ activities in the generic value chain contribute indirectly to the production.

A)primary
B)marginal
C)direct
D)support