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Primary activities are activities where value is added directly to the product. (T/F) - ANS T The increasing reliance on the web for information has created a digital divide between those who have Internet access and those who do not. (T/F) - ANS T Threat of government regulation is one of the five forces in Porter's model. (T/F) - ANS F Sustaining technologies are changes in technology that maintain the rate of improvement in customer value. (T/F) - ANS T Disruptive technologies introduce a very new package of attributes to the accepted mainstream products. (T/F) - ANS T An organization responds to the structure of its industry by choosing a competitive strategy. (T/F) - ANS T The productivity paradox suggests IT investments do not create business value. (T/F) - ANS T
A value chain is a network of activities that improve the effectiveness of a good or service. (T/F) - ANS T Porter's concept of a value chain is crucial for developing a competitive strategy. (T/F) - ANS F As defined by Porter, a value chain is a network of value-creating activities. (T/F) - ANS T Sales and service would be examples of supporting activities in Porter's value chain model. (T/F) - ANS F Accounting functions like accounts receivables would be an example of a supporting activity in Porter's value chain model. (T/F) - ANS T An organization's goals and objectives are determined by the structure of its value chain. (T/F) - ANS F One way of assessing the structure of the adventure travel industry is to apply Porter's five forces model. - ANS T In a large city, the threat of new entrants for the sandwich shop business is probably high. - ANS T
Switching costs are those associated with network switches. (T/F) - ANS F An information system that allows suppliers to view a company's inventory in real- time would provide a competitive advantage due to product differentiation. (T/F) - ANS F General Motors' OnStar system was developed so that car drivers could easily get help in emergency situations. This would be an example of an information system being used to differentiate a product. (T/F) - ANS T Which of the following is an example of a primary activity in a value chain? A) A manager preparing a production schedule B) A CFO preparing a budget C) An accountant preparing an income statement D) A computer technician backing up a file server E) A worker spray painting a car - ANS E A primary activity in a value chain is best described as A) an activity that uses only raw materials. B) an activity that involves customer service and sales. C) an activity that requires the use of information systems. D) an activity which value is directly added to a product.
E) the first activity in which value is created. - ANS D The physical assembly of a notebook computer is considered to be A) a support activity in a value chain. B) a production activity in a value chain. C) a primary activity in a value chain. D) a secondary activity in a value chain. E) a value adding activity in a value chain. - ANS C Which of the following is an example of a supporting activity in a value chain? A) An accountant filing an income tax statement B) Assembling a product C) Product package design D) A bottle of wine being shipped to a warehouse E) Product safety tests - ANS A A supporting activity in a value chain is best described as A) information technology related activities. B) activities that do not require manual labor. C) activities that support the primary activities in a value chain. D) activities that add no value to a value chain. E) maintenance related activities. - ANS C
The measure of the value that Canadian workers generate per hour is A) innovation quotient. B) labour productivity. C) corporate valuation. D) divested ratio. E) one of Porter's five forces. - ANS B IT investments can generate value by A) limiting the opportunities for creating competitive advantages. B) decreasing productivity. C) creating larger and larger service based economies. D) limiting the ways corporations can compete. E) creating more efficient and effective business processes that lead to lower prices. - ANS E Increasing efficiency means A) generating better quality products with less resources. B) maximizing the cost of production. C) shorter production times. D) accomplishing business processes with less input and/or higher speeds. E) higher speed processes at the cost of more resources and lower quality. - ANS D
"Doing things right" refers to A) efficiency. B) value creation. C) effectiveness. D) social responsibility. E) sustainability. - ANS A "Doing the right things" refers to A) efficiency. B) social responsibility. C) improved quality. D) effectiveness. E) sustainability. - ANS D A value chain (is) A) a group of activities that improve the effectiveness of a good or service. B) describes how a product moves through a distribution channel. C) a group of activities that improve the efficiency of a good or service. D) describes the total amount of money spent on making a product. E) describes the transactions that occur between the vendor and the consumer. - ANS A
C) The ability to negotiate better terms with a commodity producer after a competitive bidding process D) The ability of a customer to shop around for suppliers E) The inability for a customer to terminate a supply contract - ANS B Which of the following is a fundamental competitive strategy suggested by Porter? A) Growing the diversity of the products and/or service offered B) Providing the best customer service C) Creating alliance partners D) Developing innovative products E) Differentiating its products - ANS E Which of Porter's five forces best describes the decline of film-based photography? A) Threat of substitute products B) Bargaining power of suppliers C) Threat of new entry D) Bargaining power of customers E) Rivalry among existing firms - ANS A High switching cost refers to A) a service charge that discourages customers from switching service providers.
B) a strategy employed by companies to prevent customers from renegotiating service contracts. C) an illegal tactic that prevents customers from leaving by charging a prohibitive service termination fee. D) a strategy employed by companies to lock in customers by making it difficult or expensive to switch to another product. E) a strategy used by telecom providers to retain customers. - ANS D Which of the following best describes Bower and Christensen's idea of a sustaining technology? A) A technology innovation that increases the rate of improvement in customer value B) A technology innovation that provides a very new package of attributes from the accepted mainstream products C) A technology innovation that ensures environmental sustainability D) A technology innovation that decreases the rate of improvement in customer value E) A technology innovation that maintains the rate of improvement in customer value - ANS E Which of the following can be considered a sustaining technology? A) An internal antenna for cell phones B) A BlackBerry device C) MP3 file format D) A typewriter
D) Can be done from home E) Low labour costs - ANS B In "IT doesn't Matter," Nicholas Carr argues that A) disruptive technologies tend to be commoditized over time and hence provides less strategic advantage. B) companies are spending too much money on IT. C) there are no productivity gains for any amount of IT investments. D) the marginal benefits of an IT investment decreases over time. E) technology adds no value to companies. - ANS A Sustained competitive advantage requires A) companies to find a distinctive way to compete. B) the elimination of the dominant firm. C) companies to seek patent protection for their products. D) the creation of barriers of entry. E) companies to use more than one competitive strategy. - ANS A Information systems can change industry structure by A) using sustaining technologies. B) using technologies that have become commodities. C) using competitive strategies.
D) using the Internet. E) using disruptive technologies. - ANS E A company can use products to create competitive advantage by A) differentiating its products. B) raising prices. C) adding products to its product line. D) increasing brand awareness. E) lowering prices. - ANS A A company can create competitive advantage by A) lowering switching costs. B) refusing alliances. C) staying with the "tried and true" processes that competitors use. D) reducing barriers to entry. E) adding technology to its business process. - ANS E How can competitive advantage through IT be sustained? A) Competitive advantage through IT cannot be sustained. B) By using as much proprietary technologies as possible C) By making all employees sign nondisclosure agreements D) By suing any competitor whom your firm suspect is copying its systems
E) The introduction of automatic teller machines - ANS E The network of activities that improve the effectiveness of a good or service is called A) a value chain. B) a supplier network. C) competitive strategies. D) a supply chain. E) a value web. - ANS A What term is given to Robert Solow's quote, "We see computers everywhere except in the productivity statistics"? A) The productivity divide B) The digital divide C) The efficiency paradox D) The productivity gap E) The productivity paradox - ANS E A network of value-creating activities is called a A) business strategy. B) value network. C) value chain. D) competitive advantage.
E) primary value activities. - ANS C ________ is an example of a primary activity in Porter's value chain model. A) New IS development B) Shipping and receiving C) HR planning D) Strategic planning E) Accounting - ANS B ________ is an example of a support activity in Porter's value chain model. A) HR benefits management B) Production C) Raw materials acquisition D) Customer service E) Sales - ANS A Receiving and storing raw materials for production would be an example of a(n) ________ in Porter's value chain model. A) support activity B) primary activity C) linkage D) integrated activity
D) shared with partners. E) sustainable. - ANS E The threat of new entrants in an industry is high when A) entry and exit costs are low. B) entry costs are high. C) distribution channels are few. D) entry and exit costs are high. E) few suppliers exist. - ANS A Porter's five competitive forces include new vendors, suppliers, substitute vendors, customers, and A) finance. B) rivalry of firms. C) economic pressures. D) efficiency of production. E) marketing. - ANS B ________ would be an example of using an information system to gain competitive advantage. A) Automating the general ledger system B) Developing a web service to share information with a supply chain partner C) Using PowerPoint for company presentations
D) Using instant messaging while at work E) Printing internal reports in colour - ANS B Competitive ________ refers to a significant and sustainable benefit to a company over its competition. A) commerce B) strategy C) planning D) advantage E) disintermediation - ANS D ________ is an example of a support activity in Porter's value chain model. A) Goods production B) Warranty service C) Finished goods inventory management D) Payroll management E) Raw material acquisition Answer: D - ANS D If Goodyear Tires buys a rubber plantation, this is an example of A) departmental integration. B) quality controls.
