Washington State University MIS 250 Chapter 2: Gaining Competitive Advantage Through Information Systems 1)At the_level of a firm, the routine, day-to-day business processes and interactions with customers occur

Washington State University

MIS 250

Chapter 2: Gaining Competitive Advantage Through Information Systems

1)At the_level of a firm, the routine, day-to-day business processes and interactions with customers occur.

A)           strategic

B)            tactical

XC) operational

D)           managerial

E)            executive

 

2)            Information systems at the         level are designed to automate repetitive activities, such as sales transaction processing, and to improve the efficiency of business processes and the customer interface.

A)           tactical

B)            executive

C)            strategic

D)           managerial XE) operational

 

3)            Which of the following actions can be included as a part of operational planning? XA) making day-to-day decisions that are highly structured and recurring

 

B)            effectively utilizing and deploying organizational resources to achieve strategic objectives

C)            focusing on long-term strategic questions facing the organization

D)           dealing with complex problems with broad and long-term ramifications for the organization

E)            focusing on balancing performance across the organization

 

4)            At the   level, information systems are typically used to optimize processes and to better understand the underlying causes of any performance problems.

A)           tactical

B)            executive

C)            managerial XD) operational

E) strategic

 

5)            Ben White is the manager of a retail store. His work typically includes the routine, day-to-day interactions with customers and, once in a while, solving a customer's problem or dealing with a dissatisfied customer. Additionally, he has to keep track of inventory and issue an order for additional inventory with levels below a specified level. Ben is a(n)           level manager. XA) operational

B)            tactical

C)            strategic

D)           managerial

E)            executive

 

6)            The managerial level of the organization is also known as the      level.

A)           functional XB) tactical

C)            executive

D)           operational

E)            strategic

 

7)            Managers at the tactical level of the organization focus on           .

XA) deploying organizational resources to achieve the objectives of the organization

B)            routine, day-to-day business processes, and interactions with customers

C)            long-term strategic questions facing the organization

D)           complex problems with broad and long-term ramifications for the organization

E)            the efficiency of business processes and the customer interface

 

8)            Jane Estroisch works as a manager in a multidomestic firm. She focuses on the long-term questions facing the organization such as which countries to compete in and what organizational policies to follow. Jane is in the the                level of the organization.

A)           operational

B)            tactical XC) executive

D)           functional

E)            managerial

 

9)            Managers in the               level are referred to as "executives."

A)           operational

B)            tactical

C)            functional XD) strategic

E) managerial

 

10)                         decisions deal with complex problems with broad and long-term ramifications for the organization.

XA) Executive-level

B)            Functional-level

C)            Tactical-level

D)           Operational-level

E)            Managerial-level

 

11)          To assist               decision making, information systems are used to obtain aggregate summaries of trends and projections of the future.

A)           managerial-level

B)            functional-level

C)            tactical-level

D)           operational-level XE) executive-level

 

12)          faster is associated with information systems for              .

A)           learning XB) automating

C)            supporting

D)           initiating

E)            negotiating

 

13)          Information systems at the         level of an organization often help in automating repetitive activities.

A)           tactical

B)            strategic

C)            managerial XD) operational

E) executive

 

14)          "Doing Things Smarter" is associated with information systems for           .

A)           automating

B)            organizational learning

C)            encrypting

D)           networking

XE) supporting strategy

 

15)          Which of the following actions would an organization take if it decides to pursue a best-cost provider strategy?

A)           offering the best prices in its industry on its goods and/or services

B)            providing better products or services than its competitors

XC) offering products or services of reasonably good quality at competitive prices

D)           providing high quality products at low prices in specific markets

E)            offering low quality products at low prices with high quality after-sales services

 

16)          Tere'OWind, a fashion apparel company, provides numerous low-cost products to a broad range of customers. Tere'OWind is pursuing a      strategy.

A)           focused low-cost

B)            best-cost provider

C)            broad differentiation XD) low-cost leadership

E) focused differentiation

 

17)          Which of the following is an example of a focused differentiation strategy?

XA) Manufacturers like Ferrari, Aston Martin, and Lamborghini compete in the tiny super car category with prices starting at $150,000 and running as high as $600,000.

B)            Global furniture retailer Ikea provides customers with "affordable solutions for better living" by offering home furnishings that combine good design, function, and quality with low prices.

C)            McDonald's has extended its appeal across age groups, social groups, and national boundaries by emphasizing a few qualities with universal appeal: speed, consistency, value, hygiene, and family lifestyles.

D)           Wal-Mart's every day low prices (EDLP) strategy hinges upon Wal-Mart's ability to obtain consumer goods at the cheapest possible price and pass these savings on to consumers.

E)            Toyota's Lexus brand is considered a luxury car. Some of Lexus' models like the ES model, however, are in the midrange of prices for cars.

 

18)          Which of the following is an example of a focused low-cost strategy?

A)           McDonald's has extended its appeal across age groups, social groups, and national boundaries by emphasizing a few qualities with universal appeal: speed, consistency, value, hygiene, and family lifestyles.

B)            Toyota's Lexus brand is considered a luxury car. Some of Lexus' models like the ES model, however, are in the midrange of prices for cars.

XC) Global furniture retailer Newton provides customers who live in high-altitude areas with "affordable solutions for better living" by offering home furnishings that combine good design, function, and quality with low prices.

D)           Walmart's every day low prices (EDLP) strategy hinges upon Walmart's ability to obtain consumer goods at the cheapest possible price and pass these savings on to consumers.

E)            Big Dog builds motorcycles that target only the very high end of the heavyweight market— the high-end premium cruiser market—with names such as Pitbull, Wolf, Mastiff, and Bulldog.

 

19)          Which of the following is an example of a best-cost provider strategy?

A)           Manufacturers like Ferrari, Aston Martin, and Lamborghini compete in the tiny super car category with prices starting at $150,000 and running as high as $600,000.

 

B)            Toyota's Lexus brand is considered a luxury car. Some of Lexus' models like the ES model, however, are in the midrange of prices for cars.

XC) Global furniture retailer Ikea provides customers with "affordable solutions for better living"by offering home furnishings that combine good design, function, and quality with low prices.

D)           Big Dog builds motorcycles that target only the very high end of the heavyweight market— the high-end premium cruiser market—with names such as Pitbull, Wolf, Mastiff, and Bulldog.

E)            Wal-Mart's every day low prices (EDLP) strategy hinges upon Wal-Mart's ability to obtain consumer goods at the cheapest possible price and pass these savings on to consumers.

 

20)          Firms targeting a niche market with low cost products are pursuing a      strategy.

A)           best-cost provider

B)            broad differentiation XC) focused low-cost

D)           focused differentiation

E)            low-cost leadership Answer: C

 

21)          A             strategy can also be referred to as a middle-of-the-road strategy. XA) best-cost provider

B)            focused low-cost

C)            low-cost leadership

D)           broad differentiation

E)            focused differentiation

 

22)          Which of the following is an implication for firms that have a threat of new entrants in their market?

A)           increased cost

B)            reduced quality

C)            increased demand for services

D)           increased price

XE) decreased market share

 

23)          Reduced prices, need for increased quality, and demand for more services would result due to high       .

A)           threat of substitute products from other industries XB) customers' bargaining power

C)            threat of new entrants into the market

D)           traditional rivals within the industry

E)            increased suppliers' bargaining power

 

24)          With reference to assessing value for the IS infrastructure,          value is the contribution an investment makes toward improving the infrastructure's ability to enhance the profitability of the business.

A)           architectural

B)            operational

 

C)            regulatory

D)           compliance XE) economic

 

25)          With reference to assessing value for the IS infrastructure, architectural value is derived from

                .

A)           the infrastructure's ability to enhance the profitability of the business

XB) an investment's ability to extend the infrastructure's capabilities to meet business needs today and in the future

C)            an investment's impact on enabling the infrastructure to better meet business processing requirements

D)           assessing the extent to which an investment helps to meet requirements for control, security, and integrity as required by a governing body or a key customer

E)            the infrastructure's ability to improve product quality and customer satisfaction

 

26)          While assessing value of the IS infrastructure, "before-and-after" assessments of infrastructure characteristics such as interoperability, portability, scalability, recoverability, and compatibility can be taken to measure              value.

A)           economic

B)            operational

C)            regulatory XD) architectural

E) compliance

 

27)          While assessing value of the IS infrastructure,    value is derived from assessing an investment's impact on enabling the infrastructure to better meet business processing requirements.

A)           architectural

B)            regulatory XC) operational

D)           economic

E)            compliance

 

28)          While assessing value of the IS infrastructure, if we measure the impact of not investing in a particular project, we are deriving the        value.

XA) operational

B)            economic

C)            compliance

D)           regulatory

E)            architectural

 

29)          While assessing value of the IS infrastructure,    value is derived from assessing the extent to which an investment helps to meet requirements for control, security, and integrity as required by a governing body or a key customer.

A)           architectural

B)            tactical

 

C)            operational

XD) regulatory and compliance

E) economic

 

30)          Which of the following international business strategies is associated with low degree of global integration and high degree of local responsiveness?

A)           global strategy

B)            home-replication strategy

C)            international strategy XD) multidomestic strategy

E) transnational strategy

 

31)          A global strategy is associated with          .

A)           low degree of global integration and high degree of local responsiveness

B)            low degree of global integration and lack of local responsiveness

C)            high degree of global integration and high degree of local responsiveness

D)           low degree of global integration and low degree of local responsiveness XE) high degree of global integration and low degree of local responsiveness

 

32)          A firm that enjoys high degree of global integration and local responsiveness is pursuing a(n)

                strategy.

XA) transnational

B)            global

C)            international

D)           multidomestic

E)            home-replication

 

33)          Which of the following statements is true about firms pursuing a home-replication strategy?

A)           They attempt to achieve economies of scale by producing identical products in large quantities for a variety of different markets.

B)            They develop products for the global market.

XC) They focus on their domestic customers' needs and wants and merely export their products to generate additional sales.

D)           They have a need to create integrated networks between the home office and the multiple local subsidiaries.

E)            They leverage the flexibility offered by a decentralized organization while at the same time reaping economies of scale enjoyed by centralization.

 

34)          Companies pursuing a(n)             strategy attempt to achieve economies of scale by producing identical products in large quantities for a variety of different markets.

XA) global

B)            international

C)            export

D)           multidomestic

E)            home-replication

 

35)          While pursuing a global business strategy, the    prohibit(s) the implementation of local strategies, and thus a global company cannot quickly react to local challenges and opportunities.

A)           increased bargaining power of customers

B)            threat of new entrants into the market

C)            increased bargaining power of suppliers XD) need to achieve economies of scale

E) threat of substitute products from other industries

 

36)          Which of the following statements is true about organizations pursuing a global business strategy?

A)           They use a loose federation of associated business units, each of which is rather independent in their strategic decisions.

XB) They attempt to achieve economies of scale by producing identical products in large quantities for a variety of different markets.

C)            They are extremely flexible and responsive to the needs and demands of local markets.

D)           They focus on their domestic customers' needs and wants and merely export their products to generate additional sales.

E)            They leverage the flexibility offered by a decentralized organization while at the same time reaping economies of scale enjoyed by centralization.

 

37)          Which of the following is a disadvantage of firms that pursue a global strategy?

A)           lack of control over subsidiaries

B)            limited knowledge transfer between individual subsidiaries

C)            lack of interest in obtaining additional knowledge about foreign operations

D)           inability to control decentralization

XE) inability to react quickly to local challenges and opportunities

 

38)          Which of the following statements is true about firms pursuing a multidomestic business strategy?

A)           They leverage the flexibility offered by a decentralized organization while at the same time reaping economies of scale enjoyed by centralization.

B)            They focus on their domestic customers' needs and wants and merely export their products to generate additional sales.

C)            They cannot react quickly to local challenges and opportunities.

XD) They are extremely flexible and responsive to the needs and demands of local markets.

E) They work in a centralized fashion and the home location exerts strong control on the subsidiaries.

 

39)          Which of the following is a disadvantage for firms pursuing a multidomestic business strategy?

XA) limited knowledge transfer between individual subsidiaries

B)            exerting unnecessary control over subsidiaries

C)            lack of interest in obtaining additional knowledge about foreign operations

D)           inability to react quickly to local challenges and opportunities

E)            restriction of decision-making ability of subsidiaries

 

 

43)          The        business strategy allows companies to leverage the flexibility offered by a decentralized organization while at the same time reaping economies of scale enjoyed by centralization.

A)           international

B)            global

C)            multidomestic XD) transnational

E) home-replication

 

44)          Which of the following actions distinguish firms pursuing a transnational business strategy?

A)           responding to local challenges and opportunities quickly

B)            exerting strong control over its subsidiaries

XC) striking a balance between centralization and decentralization

D)           responding to global challenges and opportunities quickly

E)            standardizing product offerings to achieve economies of scale

 

45)          Mystic, a Texas-based fashion apparel company with subsidiaries in more that 25 countries across the world, is one of the most recognized brands in the global and domestic markets. In a recent interview with The New York Times, the CEO and the spearhead of Mystic Co. Burt Swager said, "The secret of the company's success is its ability to strike the right balance between centralization and decentralization." Mystic Co. is a firm that successfully pursues a(n)

                business strategy.

A)           global

XB) transnational

C)            home-replication

D)           multidomestic

E)            international

 

46)          According to       , the number of transistors that could be squeezed onto a silicon chip would double every 18 months.

A)           Metcalfe's law

B)            Megan's law

C)            Murphy's law XD) Moore's law

E) Ashby's law

 

47)          To deploy innovative information systems well, people in the organization must be willing to do whatever they can to bypass and eliminate internal bureaucracy, set aside political squabbles, and pull together for the common good. These requirements can be categorized as            requirements.

XA) process

B)            customer

C)            resource

D)           quality

E)            risk tolerance

 

 

48)          Which of the following actions would fulfill the process requirements for the deployment of an innovative information system?

A)           hiring the necessary human capital

B)            finding system partners

C)            concentrating on economies of scale XD) eliminating internal bureaucracy

E) discouraging decentralization

 

49)          Organizations deploying innovative information systems must have the human capital necessary to deploy the new systems. These requirements can be categorized as      requirements.

XA) resource

B)            process

C)            risk tolerance

D)           customer

E)            quality

 

50)          Which of the following actions would fulfill the resource requirements for the deployment of an innovative information system?

A)           discouraging decentralization

B)            evaluating the risk tolerance of employees

C)            concentrating on economies of scale

D)           eliminating internal bureaucracy XE) finding system partners

 

51)                         are new technologies, products, or services that eventually surpass the existing dominant technology or product in a market.

A)           Constructive innovations

B)            Destructive innovations XC) Disruptive innovations

D)           Facultative innovations

E)            Extensive innovations

 

52)          Which of the following statements is true about disruptive innovations?

A)           They have a very short life span and are discarded quickly.

XB) They surpass the existing dominant technology or product in a market.

C)            They are innovations used to incapacitate a rival firm.

D)           They lack the ability to destroy an organization or industry.

E)            They are innovations created or used with the intention of harming the human race.

 

53)          The innovator's dilemma refers to how disruptive innovations   .

A)           force rival firms to copy the innovations, often leading to intellectual property violations

B)            cause the failure of the firm that created it

C)            encourage firms to make heavy investments that result in losses when these innovations fail XD) cause established firms or industries to lose market dominance when ignored

 

E) lead to loss of government control in these industries

 

54)          According to the disruptive growth engine, executive leadership will allow a firm to

                .

A)           effectively identify and evaluate potential disruptive innovations

XB) gain credibility and to bridge sustaining and disruptive product development

C)            gain the greatest opportunities

D)           build a competent team of expert innovators

E)            educate those closest to customers and competitors in order to identify opportunities

 

55)          According to the disruptive growth engine, firms need to build a team of expert innovators to

                .

XA) effectively identify and evaluate potential disruptive innovations

B)            gain credibility and to bridge sustaining and disruptive product development

C)            gain the greatest opportunities

D)           educate those closest to customers and competitors in order to identify opportunities

E)            build a competent team of expert innovators

 

56)          Which of the statements explains the difference between "e-commerce" and "e-business?"

A)           E-commerce is the use of nearly any information technologies or systems to support commerce, e-business is the use of the Internet and related technologies to support every part of the business.

B)            E-commerce is the use of nearly any information technologies or systems to support commerce, e-business is the use of nearly any information technologies or systems to support every part of the business.

C)            E-commerce is the use of nearly any information technologies or systems to support commerce, e-business is the use of e-commerce to support every part of the business.

D)           E-commerce is the use of the Internet and related technologies to support commerce, e- business is the use of nearly any information technologies or systems to support e-commerce. XE) E-commerce is the use of the Internet and related technologies to support commerce, e- business is the use of nearly any information technologies or systems to support every part of the business.

 

57)          Which of the following statements is true about the e-business innovation cycle?

A)           The vertical dimension of the cycle shows the life expectancy of a particular information technology, and the horizontal dimension shows time.

XB) The vertical dimension of the cycle shows the extent to which an organization derives value from a particular information technology, and the horizontal dimension shows time.

C)            The vertical dimension of the cycle shows the expected investments required for a particular information technology, and the horizontal dimension shows time.

D)           The vertical dimension of the cycle shows the efficiency of a particular information technology, and the horizontal dimension shows time.

E)            The vertical dimension of the cycle shows the user-friendliness of a particular technology, and the horizontal dimension shows the amount of investment in that technology.

 

58)          In an e-business innovation cycle, after an organization scans the environment for new emerging and enabling technologies, the next step is to             .

A)           create jobs, groups, and processes that are all devoted to scanning the environment

B)            select the database and data storage advances

C)            address the current opportunity to grab customers and market share

XD) match the most promising new technologies with current economic opportunities

E) assess the value of the use of technology for customers and internal clients

 

59)          In an e-business innovation cycle, after a firm executes business innovation for growth, the next step is to                .

XA) assess the value of the use of technology for customers and internal clients

B)            create jobs, groups, and processes that are all devoted to scanning the environment

C)            select the database and data storage advances

D)           match the most promising new technologies with current economic opportunities

E)            address the current opportunity to grab customers and market share

 

60)          Freeconomics is the leveraging of digital technologies to               .

A)           provide high quality products and services at low prices as a business strategy for gaining a competitive advantage

B)            allow free product information to customers as a business strategy for gaining a competitive advantage

C)            allow dissatisfied customers easy access to business premises and top management of the firm

D)           match customer preferences with product features

XE) provide free goods and services to customers as a business strategy for gaining a competitive advantage

 

61)          According to basic economics within a competitive marketplace, the price of a product is set by its           .

A)           opportunity cost

B)            sunk cost

XC) marginal cost

D)           transaction cost

E)            fixed cost

 

62)          Which of the following defines marginal cost?

A)           It is the cost of an alternative that must be forgone in order to pursue a certain action. XB) It is the cost of producing an additional unit of output.

C)            It is the cost that is not dependent on the level of goods or services produced by the business.

D)           It is the cost that has already been incurred and cannot be recovered.

E)            It is the cost incurred in making an economic exchange.

 

63)          Which of the following actions of a firm suggests that it is using the freemium approach to applying freeconomics?

A)           providing free services to customers and getting paid for it by third parties

B)            reducing the sale price of one item in order to sell something else of value

C)            distributing products to customers without an appreciable cost to anyone

 

XD) offering basic services for free, but charging a premium for special features

E) allowing people to participate and collaborate to create something of value

 

64)          Musicmatch Jukebox is an all-in-one music management tool that was first marketed in 1999. Most users can use the Basic/Free version, but a $19.99 upgrade provides extra features such as supertagging and faster ripping and burning. Which of the following explains this approach to applying freeconomics?

A)           advertising approach XB) freemium approach

C)            zero marginal cost approach

D)           cross subsidies approach

E)            gift economy approach

 

65)          Tele'Wire, a mobile manufacturer, offers free connections to customers who buy its mobile phones. This cost of connection is actually included in the price of the mobile phone. Tele'Wire is pursuing a(n)            approach to applying freeconomics.

XA) cross subsidies

B)            gift economy

C)            zero marginal cost

D)           advertising

E)            freemium

 

66)          Web sites like ez-tracks and beemp3 pursue a(n)             approach to applying freeconomics when they offer free music downloads for users because reproduction and distribution of these products come at no cost.

A)           gift economy

XB) zero marginal cost

C)            advertising

D)           cross subsidies

E)            freemium

 

67)          Wikipedia is a free, web-based, collaborative, multilingual encyclopedia project supported by the non-profit Wikimedia Foundation. Its 17 million articles have been written collaboratively by volunteers around the world, and almost all of its articles can be edited by anyone with access to the site. This allows people to participate and create something of value for everyone. Wikipedia is pursuing a(n)       approach to applying freeconomics.

XA) gift economy

B)            zero marginal cost

C)            advertising

D)           cross subsidies

E)            freemium