Question 1

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

Accepted Answer

This is a commonly used tactic known as "vendor lock-in" where organizations create barriers for customers to switch to competitors, often by offering proprietary software or hardware that is not compatible with other products or services. This can make it costly and time-consuming for customers to switch, leading to longer-lasting relationships and increased profitability for the organization.

Question 2

Which of the following factors determines the structure, features, and functions of an information system used in a company?

Accepted Answer

The competitive strategy of a company is the key factor that determines the structure, features, and functions of an information system used in the organization. The information system must align with the company's strategic goals and support its competitive advantage. Factors such as the size of the company, the value of its brands, and the technology used by competitors are important but can be variable and influenced by the company's competitive strategy.

Question 3

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

Accepted Answer

Business processes are the activities that create value for an organization, and these processes determine the scope and requirements for the organization's information systems. Therefore, the statement is true.

Question 4

To determine if an information system delivers a net savings in costs, the cost of developing and operating the information system will need to be offset against the gains in reduced errors and paper, ink, and printing costs.

Accepted Answer

In order to determine if an information system delivers a net savings in costs, the costs associated with developing and operating the system must be compared to the cost savings achieved through reduced errors and paper, ink, and printing costs.

Question 5

Establishing alliances with other organizations increases the cost of operations, though they do provide competitive advantages.

Accepted Answer

The answer of Establishing alliances with other organizations increases the...

Question 6

According to Porter's five forces model, which of the following firms would be least affected by the threat of substitutes?

Accepted Answer

A firm that sells the only drug for a disease would be least affected by the threat of substitutes, as there are no other alternatives available for customers. This gives the firm significant pricing power and bargaining leverage. The other three options have more substitutes available and, therefore, would be more affected by the threat of substitutes.

Question 7

An organization that minimizes the costs associated with the delivery of its products uses a product implementation tactic to obtain competitive advantage.

Accepted Answer

The answer of An organization that minimizes the costs associated...

Question 8

Porter's five forces model is used to assess ________.

Accepted Answer

Porter's five forces model is specifically designed to analyze and assess the structure and competitive dynamics of an industry, including the threats and opportunities facing the businesses operating within it.

Question 9

According to Porter's five forces model, in which of the following situations would the suppliers have the highest bargaining power?

Accepted Answer

When a single vendor provides raw materials to many department stores, the vendor has high bargaining power due to the lack of alternative suppliers for the department stores.

Question 10

Organizations cannot gain a competitive advantage by enhancing existing products or services.

Accepted Answer

Organizations can gain a competitive advantage by enhancing existing products or services through innovation, differentiation, improved quality or customer service, cost efficiency, etc. This allows them to meet changing market demands and stay ahead of competitors.

Question 11

An organization is using product implementation to achieve competitive advantage when it tries to reduce operational costs.

Accepted Answer

Reducing operational costs is a strategy for cost leadership, not product implementation, which focuses on developing new products or improving existing ones to gain a competitive edge.

Question 12

A new drug that has shown promise in curing lung cancer has been discovered by a famous chemical laboratory.This is the only drug effective for treatment of this disease.The laboratory obtains a patent for the product and decides to sell it.This situation is characterized by ________.

Accepted Answer

The fact that this drug is the only one effective for treatment of lung cancer implies that there are no substitutes available, therefore there is a low threat of substitutions.

Question 13

According to Porter's five forces model, which of the following would be most affected by the threat of substitutes?

Accepted Answer

The answer of According to Porter's five forces model, which...

Question 14

Creating a new product to add value to customers is an example of using product implementations to achieve competitive advantage.

Accepted Answer

Creating a new product that adds value to customers can differentiate a company from its competitors, making it more competitive and providing a competitive advantage. This is an example of using product implementation to achieve a competitive advantage.

Question 15

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

Accepted Answer

Locking in customers by establishing high switching costs is a common competitive strategy used by businesses. This entails making it difficult or expensive for customers to switch to a competitor by creating barriers such as contracts or exclusive deals. By doing so, companies hope to retain their customers by making it too costly or inconvenient for them to switch to another product or service.

Question 16

Information systems create competitive advantage by providing support to a product rather than by becoming a part of the product.

Accepted Answer

Information systems can create competitive advantage both by supporting a product and by becoming an integral part of the product itself, enhancing its value and differentiation in the market.

Question 17

According to Porter's five forces model, in which of the following examples would rivalry be considered as a weak force affecting the market?

Accepted Answer

Military services typically have limited competition due to government control and regulation, making rivalry a weak force in this market.

Question 18

A group of grain farmers in a surplus year will have reduced ________.

Accepted Answer

In a surplus year, there is an excess supply of grains, which leads to a decrease in the price of grains. This puts the farmers at a disadvantage while negotiating with buyers, reducing their bargaining power.

Question 19

Bargaining power of customers is likely to be the highest for markets involving ________.

Accepted Answer

In markets involving industrial products, customers often have higher bargaining power due to the availability of multiple suppliers and the ability to negotiate prices and terms.

Question 20

The automobile industry is characterized by many manufacturers and intense competition among them.This statement illustrates ________.

Accepted Answer

The statement describes the intense competition among the automobile manufacturers, which indicates a high level of rivalry in the industry.

Quiz 3: Strategy and Information Systems