BIS 111 Chapter 1

(T/F) Companies today are successful when they combine the power of the information age with traditional business methods.

True

(T/F) Competitive intelligence is information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making.

False. Definition of business intelligence.

(T/F) The information age is the present time, during which infinite quantities of facts are widely available to anyone who can use a computer.

True

(T/F) Technology provides countless business opportunities, but can also lead to pitfalls and traps for a business.

True

(T/F) Top managers use social intelligence to define the future of the business, analyzing markets, industries and economies to determine the strategic direction the company must follow to remain unprofitable.

False. Use business intelligence.

(T/F) A variable is a business intelligence characteristic that stands for a value that cannot change over time.

False

Companies update business strategies continuously as internal and external environments change.

True

For an organization to succeed, every department or functional area must work independently to be most effective.

False

Porter’s Five Forces Model analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry.

True

With the Five Forces Model, companies should watch the forces in the market. If the forces are strong competition generally increases and if the forces are weak competition typically decreases.

True

Successful companies today operate cross-functionally, integrating the operations of all departments.

True

An overview of systems thinking includes input, process, output, and finances.

False. Feedback not finances.

MIS is a tool that is most valuable when it leverages the talents of people who know how to use and manage it effectively.

True.

The chief technology officer is responsible for ensuring the security of business systems and developing strategies and safeguards against attacks from hackers and viruses.

False. is responsible for ensuring the speed, accuracy, availability, and reliability for MIS.

A leadership plan that achieves a specific set of goals or objectives is a business strategy.

True

When a company is the first to market with a competitive advantage, it gains a particular benefit known as competitive intelligence.

False. First mover advantage.

Over the past decade the United States has lost an estimated 2.4 million factory jobs to Nepal.

False. China

Two ways to reduce buyer power is through switching costs and loyalty programs.

True

Mark Peterson identified the Porter’s Five Forces Model which analyzes the competitive forces within a business environment.

False. Michael Porter

There are many challenges to changing doctors, including transferring medical records and losing the doctor patient relationship along with the doctor’s knowledge of the patient’s history. Changing doctors provides a great example of switching costs.

True

Supplier power is one of Porter’s five forces and it measures the suppliers’ ability to influence the prices they charge for supplies (including materials, labor, and services).

True

Polaroid had a unique competitive advantage for many years until it forgot to observe competitive intelligence. The firm went bankrupt when people began taking digital pictures. Polaroid provides a great example of Porter’s threat of new entrants.

False. Threat of substitute products or services.

Product differentiation occurs when a company develops unique differences in its products or services with the intent to influence demand.

True

Buyer power is the ability of buyers to affect the price they must pay for an item.

True

Tiffany & Company competes in the marketplace by offering high cost custom jewelry. Tiffany & Company is following a broad market and cost leadership strategy.

False. Focused market with high cost differentiation strategy.

Porter has identified three generic business strategies including focused, broad cost leadership, and switching strategy.

False. : 1) broad cost leadership, 2) broad differentiation, and 3) focused strategy.

According to Porter’s three generic strategies, Walmart is following a business strategy that focuses on ‘broad market and low cost’.

True

Value chain analysis views a firm as a series of business processes that each adds value to the product or service.

True

A standardized set of activities that accomplish a specific task is called a supply chain component.

False. business process

The value chain will group a company’s activities into two categories: primary value activities and support value activities.

True

Which of the following is not considered a core driver of the information age?
A. Information.
B. Business Intelligence.
C. Competitive Intelligence.
D. Data.

C. Competitive Intelligence The core drivers of the information age include data, information, business intelligence, and knowledge.

Which of the following is not included as one of Friedman’s 10 forces that flattened the world?
A. Systems Thinking.
B. Outsourcing.
C. Informing.
D. Supply Chaining.

A. Systems Thinking The 10 forces are Fall of the Berlin Wall, Netscape IPO, Work flow software, Open sourcing, Outsourcing, Offshoring, Supply chaining, In-sourcing, Informing, and Wireless.

Why do students need to study information technology?
A. Information technology is everywhere in business
B. Information technology is rarely discussed in business
C. Information technology is rarely used in organizations
D. Information technology is found in only a few businesses

A. Information technology is everywhere in business.

Which of the following is considered information?
A. Quantity sold
B. Date sold
C. Best selling item by month
D. All of the above

C. Best selling item by month

Which of the following is considered data?
A. Quantity sold
B. Best customer by month
C. Best selling item by month
D. Worst selling item by month

A. Quantity sold

Cheryl Steffan is the operations manager for Nature’s Bread Company, which specializes in providing natural products for health conscious individuals. Cheryl is responsible for compiling, analyzing, and evaluating daily sales numbers to determine the company’s profitability and forecast production for the next day. Which of the following is an example of a piece of data Cheryl would be using to successfully perform her job?
A. Craig Newmark is customer number 15467.
B. Compare the costs of supplies including energy over the last five years to determine the best-selling product by month.
C. Best-selling product by day.
D. Best-selling product changes when Tony the best baker is working.

A. Craig Newmark is customer number 15467 Data is raw facts that describe the characteristics of an event or object. Data for Cheryl would include Craig Newmark is customer number 15467.

Cheryl Steffan is the operations manager for Nature’s Bread Company, which specializes in providing natural products for health conscious individuals. Cheryl is responsible for compiling, analyzing, and evaluating daily sales numbers to determine the company’s profitability and forecast production for the next day. Which of the following is an example of the type of information Cheryl would be using to successfully perform her job?
A. Craig Newmark is customer number 15467.
B. Compare the costs of supplies including energy over the last five years to determine the best-selling product by month.
C. Best-selling product by day.
D. Best-selling product changes when Tony the best baker is working.

C. Best-selling product by day

Data is useful for understanding individual sales, but to gain deeper insight into a business data needs to be turned into information. Which of the following offers an example of turning data into information?
A. Who are my best customers?
B. What is my best-selling product?
C. What is my worst-selling product?
D. All of the above

D. All of the above.

Which of the following provides an example of information?
A. Who is customer number 12345XX?
B. What is product number 12345XX?
C. What customer number is Bob Smith?
D. What is my worst-selling product?

D. What is my worst-selling product? Taking data and turning it into information.

Which of the following provides an example of data?
A. Who are my best customers?
B. What is my best-selling product?
C. What is my worst-selling product?
D. Who is customer number 12345XX?

D. Who is customer number 12345XX

Business intelligence is information collected from multiple sources. Which of the following provides an example of a source that would be included in business intelligence?
A. Suppliers.
B. Customers.
C. Competitors.
D. All of the above.

D. All of the above.

Knowledge includes the skills, experience, and expertise coupled with information and _________ that creates a person’s intellectual resources.
A. Resources.
B. Intelligence.
C. Expectations.
D. Enterprise information.

B. Intelligence

Which of the following is not a topic associated with the information age?
A. Collection of data.
B. Storage of data.
C. College statistics for data.
D. Use of data.

C. College statistics for data.

Which of the following represents the core drives of the information age?
A. Data, Information, Business Intelligence, Knowledge.
B. Fact, Data, Intelligence, Experience.
C. Fact, Intelligence, Business Skills, Knowledge.
D. Data, Intelligence, Business Information, Knowledge.

A. Data, Information, Business Intelligence, and Knowledge.

Which of the following is not a core driver of the information age?
A. Information.
B. Knowledge.
C. Fact.
D. Data.

C. Fact

Which of the following represents the definition of a variable?
A. A data characteristic that is collected through competitive intelligence and cannot change over time.
B. A data characteristic that stands for a value that changes or varies over time.
C. A data characteristic that stands for a value that does not change or vary over time.
D. A data characteristic that is collected only through competitive intelligence and can change over time.

B. A data characteristic that stands for a value that changes or varies over time. Can be manipulated to improve profits.

Today’s workers are referred to as _______________ and they use BI along with personal experience to make decisions based on both information and intuition, a valuable resource for any company.
A. Knowledge workers
B. Knowledge thinkers
C. Knowledge resources
D. All of the above

A. Knowledge workers

What is information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making?
A. Supplier’s intelligence.
B. Social intelligence.
C. Employee intelligence.
D. Business intelligence.

D. Business intelligence

Information is data converted into useful, meaningful context. What are data characteristics that change or vary over time?
A. Facts.
B. Variables.
C. Supplies.
D. Vulnerable.

B. Variables

When Friedman describes Globalization 3.0 he discusses 10 forces that ________ the world.
A. Increased the world
B. Shrunk the world
C. Prioritized the world
D. Flattened the World

D. Flattened the World

Which of the below is the key term that defines the confirmation or validation of an event or object?
A. Buyer power.
B. Data.
C. Fact.
D. Entry barrier.

C. Fact

Which of the following is included as one of Friedman’s 10 Forces that flattened the world?
A. Wireless technologies.
B. Global warming impacts.
C. Social environmental technologies.
D. Hazardous waste environmental impacts.

A. Wireless technologies.

What is data converted into a meaningful and useful context?
A. Competitive intelligence.
B. Information.
C. Buyer power.
D. First-mover advantage.

B. Information

As companies move from data to knowledge they will start to include more and more variables for analysis resulting in better, more precise support for _____________.
A. Decision making
B. Problem solving
C. Both A & B
D. None of the above

C. Both A & B

How are the majority of companies today typically organized?
A. By departments or functional areas.
B. By departments or financial areas.
C. By degree or financial areas.
D. All of the above.

A. By departments or functional areas.

How does the text recommend that a company operate if it wants to be successful in the information age?
A. Functionally independent between departments.
B. Interdependently between departments.
C. Together as one department with little or no independence.
D. Each department acting as its own individual business unit.

B. Interdependently between departments.

Most companies are typically organized by departments or functional areas. Which of the following is not a common department found in a company?
A. Accounting.
B. Payroll.
C. Marketing.
D. Human Resources.

B. Payroll Part of accounting department.

Which of the following is typically performed by the sales or marketing department?
A. Manage enterprise-wide processes.
B. Maintain employment policies.
C. Manage cross-enterprise processes.
D. Maintain transactional data.

D. Maintain transactional data.

The sales department needs to rely on information from operations to understand ________.
A. Inventory
B. Customer orders
C. Demand forecasts
D. All of the above

D. All of the above.

Which of the following represents the department that maintains policies, plans, and procedures for the effective management of employees?
A. Human Resources.
B. Sales.
C. Employee Resources.
D. Employee Relations.

A. Human Resources

Greg works for Geneva Steel Corporation. Greg’s duties include managing the overall processes for the company and transforming the steel resources into goods. Which department would Greg most likely work in?
A. Accounting Manager.
B. Operations Manager.
C. Marketing Manager.
D. CIO.

B. Operations Manager

Information technology can enable departments to more efficiently and effectively perform their core ____________.
A. Facts
B. Feedback mechanisms
C. Business operations
D. Media issues

C. Business operations

The department within a company that records, measures, and reports monetary transactions is called ______________.
A. Accounting
B. Marketing
C. Finance
D. Operations Management

A. Accounting

The department within a company that performs the function of selling goods or services is called ________________:
A. Marketing
B. Sales
C. Finance
D. Operations Management

B. Sales

The department within a company that supports the sales by planning, pricing, and promoting goods or services is called __________.
A. Sales
B. Operations Management
C. Accounting
D. Marketing

D. Marketing

Which of the following represents the relationship between functional areas in a business?
A. Independent
B. Autonomous
C. Interdependent
D. Self-sufficient

C. Interdependent

Which of the following statements is true?
A. IT equals business success.
B. IT equals business innovation.
C. IT represents business success and innovation.
D. IT enables business success and innovation.

D. IT enables business success and innovation

What is the name of a company’s internal MIS department?
A. Management information systems (MIS)
B. Information systems (IS)
C. Information technology (IT)
D. All of the above

D. All of the above.

A system is a collection of parts that link together to __________.
A. Monitor the company
B. Gather experience
C. Achieve a common purpose
D. Implement solutions

C. Achieve a common purpose.

Which of the following does not offer a good example of a system?
A. A car.
B. A laptop.
C. The light-rail tram.
D. A pencil.

D. a pencil A system is a collection of parts that link to achieve a common purpose. A pencil does not link together to achieve a common purpose.

Which four elements are included in systems thinking?
A. Output, Process, Feedback, and Accounting.
B. Process, Output, Operations, and Accounting.
C. Input, Process, Output, and Feedback.
D. Input, Output, Sales, and Feedback

C. Input, process, output, and feedback.

MIS is a business function, like accounting or sales, which moves information about people, products, and processes across the company to facilitate decision making and problem solving. What does MIS stands for?
A. Management Information Strategy.
B. Management Intelligence System.
C. Management Information System.
D. Management Information Strategist.

C. Management Information System

. Shelby Black runs a very successful hair salon in downtown Los Angeles. One of Shelby’s tasks is to input positive and negative customer reviews into her computer system. What type of information is Shelby gathering?
A. Feedback.
B. Processing.
C. Output management.
D. Sales processing.

A. Feedback

Trina Hauger works for Johnson Electric as a corporate lawyer and part of her duties are to ensure the ethical and legal use of information within the company. Which of the following represents Trina’s role at Johnson Electric?
A. Chief Knowledge Officer (CKO).
B. Chief Privacy Officer (CPO).
C. Chief Technology Officer (CTO).
D. Chief Information Officer (CIO).

B. CPO

The challenge that companies today sometimes have is that they are departmentalized and act independently of each other. One solution that can help a company work interdepartmentally includes __________.
A. System processes.
B. Human resources.
C. Management information systems.
D. Resource information systems.

C. Management information systems. Management information systems is a business function, like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision-making and problem-solving.

Susan Stewart is an executive at Equity Title where she is responsible for collecting, maintaining and distributing knowledge for the company. What is Susan’s role at Equity Title?
A. Chief Knowledge Officer (CKO).
B. Chief Technology Officer (CTO).
C. Chief Information Officer (CIO).
D. Chief Security Officer (CSO).

A. CKO

What is the primary responsibility of the CTO?
A. Overseeing all uses of MIS.
B. Ensuring the security of business systems.
C. Ensuring speed, accuracy, and reliability for MIS.
D. Collecting and distributing company information.

C. Ensuring speed, accuracy, and reliability for MIS

What is a way of monitoring the entire system in a company, by viewing the multiple inputs being processed to produce outputs?
A. Feedback thinking.
B. Systems thinking.
C. Output management.
D. Operational thinking.

B. Systems thinking.

Jeremy Bridges is an executive for Green Web Designs, where his primary role is to ensure the security of business systems and develop strategies to protect the company from online viruses and hackers. What is Jeremy’s role within the company?
A. Chief Executive Officer (CEO).
B. Chief Security Officer (CSO).
C. Chief Procurement Officer (CPO).
D. Chief Technology Officer (CTO).

B. CSO

Feedback is information that returns to its original transmitter and modifies the transmitter’s actions. What would the original transmitter include?
A. Input, Transform, Output.
B. Input, Transform, Outnumber.
C. Output, Input, Performer.
D. Input, Process, Transform.

A. Input, transform, output

MIS is a business function. Which of the following does MIS perform to help aid the company in decision making and problem solving?
A. Moves information about people.
B. Moves processes across the company to improve systems.
C. Moves information about products.
D. All of the above.

D. All of the above

A system is a collection of parts that link to achieve a common purpose. Systems thinking is a way of monitoring _______________.
A. The entire system
B. A division within the sales role
C. The executive team
D. The company’s competitors

A. the entire system

MIS can be an important enabler of business success and innovation. Which of the below statements is accurate when referring to MIS?
A. MIS equals business success and innovation.
B. MIS represents business success and innovation.
C. MIS is not a valuable tool that leverages talent.
D. MIS is a valuable tool that can leverage the talents of people who know how to use and manage it effectively.

D. MIS is a valuable tool that can leverage the talents of people who know how to use and manage it effectively.

Which role within a company is responsible for overseeing all uses of MIS and ensuring that MIS strategic aligns with business goals and objectives?
A. Chief knowledge officer (CKO).
B. Chief privacy officer (CPO).
C. Chief information officer (CIO).
D. Chief security officer (CSO).

C. CIO The Chief information officer (CIO) is responsible for (1) overseeing all uses of MIS and (2) ensuring that MIS strategic aligns with business goals and objectives.

Which of the following provides an accurate definition of systems thinking?
A. A way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part.
B. A way of monitoring individual components including an input, the process, and an output, while continuously gathering feedback on the entire system.
C. A way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on the entire system.
D. A way of monitoring singular parts of a system by viewing a single input that is processed or transformed to produce an entire system that is continuously monitored to gather feedback on each individual part.

A. A way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part.

If you were thinking about a washing machine as a system which of the following represents the inputs?
A. The dirty clothes, water, and detergent.
B. The clean clothes.
C. The wash and rinse cycle.
D. The light indicating that the washer is off balance and has stopped.

A. dirty clothes, water, and detergent.

If you were thinking about a washing machine as a system which of the following represents the process?
A. The dirty clothes, water, and detergent.
B. The clean clothes.
C. The wash and rinse cycle.
D. The light indicating that the washer is off balance and has stopped.

C. the wash and rinse cycle

If you were thinking about a washing machine as a system which of the following represents the feedback?
A. The dirty clothes, water, and detergent.
B. The clean clothes.
C. The wash and rinse cycle.
D. The light indicating that the washer is off balance and has stopped.

D. the light indicating that the washer is off balance and has stopped.

If you were thinking about a washing machine as a system which of the following represents the outputs?
A. The dirty clothes, water, and detergent.
B. The clean clothes.
C. The wash and rinse cycle.
D. The light indicating that the washer is off balance and has stopped.

B. the clean clothes

If you were thinking about an oven as a system which of the following represents the input?
A. The uncooked food.
B. The cooked food.
C. A light indicating that the oven has reached the preheated temperature.
D. The oven running at 350 degrees for 20 minutes.

a. the uncooked food

Which of the following is not a typical way that a company would duplicate a competitive advantage?
A. Acquiring the new technology.
B. Copying the business operations.
C. Hiring away key employees.
D. Carrying large product inventories.

D. carrying large product inventory Ways that companies duplicate competitive advantages include acquiring new technology, copying the business operations, and hiring away key employees.

When a company is the first to market with a competitive advantage, this is called a first-mover advantage. All of the following companies were first-movers except ___________.
A. FedEx-the online self service software
B. Apple-iPad
C. Apple-iPod
D. Microsoft-Bing Search Engine

D. Microsoft Bing

A business strategy achieves a specific set of goals which include _________.
A. Developing new products or services, attracting new competition
B. Increasing costs, attracting new competition
C. Attracting new customers, developing new products or services
D. All of the above

C. Attracting new customers, developing new products or services

Competitive intelligence is the process of gathering information about the competitive environment, including ________.
A. Competitors’ employees
B. Competitors’ differentiated processes
C. Competitors’ plans
D. All of the above

C. Competitor’s plans

Which of the following is a tool a manager can use to analyze competitive intelligence and identify competitive advantages?
A. The three generic strategies.
B. The threat of substitute buyer power.
C. Differentiated costs.
D. Supplier loyalty.

A. the three generic strategies. Managers utilize three common tools to analyze competitive intelligence and develop competitive advantages including: 1) the five forces model, 2) the three generic strategies, and 3) value chain analysis.

Identifying competitive advantages can be difficult and explains why they are typically ______.
A. Temporary.
B. Satisfactory.
C. Terminated.
D. Unsuccessful.

A. temporary

Updating business strategies is a continuous undertaking as internal and external environments _______.
A. Become less competitive
B. Remain stagnant
C. Rapidly change
D. Become more consistent

C. Rapidly change

Which of the following represents a reason why competitive advantages are typically temporary?
A. The competitor will hire away your key employees.
B. The competitor quickly seeks ways to duplicate your business operations.
C. The competitor will purchase new technology.
D. All of the above.

D. All the above.

What is a competitive advantage?
A. A product that an organization’s customers place a lesser value on than similar offerings from a competitor.
B. A feature of a product or service on which customers place a lesser value than they do on similar offerings from a supplier.
C. A service that an organization’s customers place a lesser value on than similar offerings from a supplier.
D. A feature of a product or service on which customers place a greater value than they do on similar offerings from competitors.

D. a feature of a product or service on which customers place a greater value than they do on similar offerings from competitors.

All of the following are common tools used in industry to analyze and develop competitive advantages, except:
A. Five Forces Model
B. Three Generic Strategies
C. Competitive analysis model
D. Value chain analysis

C. Competitive analysis model

Greg Provenzo owns and runs a Blockbuster video store. Greg is implementing a drive-thru rental process that is the same as you would find at a fast food restaurant. Customers can pick-up and drop-off their videos without leaving their cars. Greg’s new system has become so popular that Videos Plus, a competitor down the street, is attempting to recreate Greg’s video drive-thru rental process. Greg’s system is an example of a ________.
A. Supply chain power
B. First-mover advantage
C. Business processing strategy
D. Business Intelligence

B. first-mover advantage

The process of gathering information about the competitive environment, including competitors’ plans, activities, and products, to improve a company’s ability to succeed is the definition of __________.
A. Feedback
B. Information
C. Competitive intelligence
D. Data

C. Competitive intelligence

Steve Jobs and Apple created a big advantage in the technology industry with the introduction of the iPod, iPhone, and iPad. What are these all examples of?
A. Competitive advantage
B. Competitive intelligence
C. First-mover advantage
D. All of the above

D. All of the above

Paula Logston is the owner and operator of a high-end online custom clothing company. Paula has never heard of Porter’s Five Forces model and she wants to understand why she would perform an analysis using it. If you were tasked with explaining Porter’s Five Forces model to Paula what would be the primary reason she would want to use this type of analysis?
A. To help Paula choose a clothing business focus.
B. To help Paula evaluate the attractiveness of the clothing industry.
C. To help Paula evaluate and execute business goals.
D. All of the above.

B. to help paula evaluate the attractiveness of the clothing industry

A __________ features a product or service on which customers place a greater value than they do on similar offerings from competitors.
A. Competitive advantage
B. Competitor advantage
C. Power advantage
D. First mover advantage

A. competitive advantage

The Victory Wireless store in Denver is currently offering a fabulous marketing strategy for potential new iPhone customers. Victory Wireless offers customers who purchase an iPhone with a 2 year subscription a free Otter phone case, car charger, ear phones, and speakers. In terms of Porter’s Five Forces what is Victory Wireless attempting to achieve with this marketing strategy?
A. Increase buyer power.
B. Increase substitute products.
C. Decrease supplier power.
D. Decrease buyer power.

D. decrease buyer power

Gina Brooks works for Aquarium Retail Services selling high-end salt water fish and tank supplies. Aquarium Retail Services is the current market leader in Gina’s city. Gina has recently been approached by Deep Blue Incorporated with an opportunity to run its corporate nation-wide marketing and sales division. Gina decides to jump at the opportunity! Deep Blue is attempting to gain a competitive ________ by stealing its competitor’s key employees.
A. Power
B. Entry Barrier
C. Advantage
D. Loyalty

C. advantage

The banking industry has implemented several competitive advantages including ATM’s, online bill pay services, and electronic statements. Of course, these competitive advantages were quickly duplicated by any competitor that wanted to remain in the banking industry. These were all examples of ___________ competitive advantages.
A. Acquiring new technology products and services
B. Hiring new employees
C. Reducing expenses
D. Gaining invaluable feedback from customers

A. acquiring new technology products and services

Michael Porter defined the Five Forces Model and the potential pressures that can hurt sales. Which of the following is not one of the potential pressures that can hurt sales?
A. Suppliers can drive down profits by charging more for supplies.
B. New market entrants can steal potential investment capital.
C. Substitute products can steal customers.
D. Competition can steal customers.

A. suppliers can drive down profits by charging more for supplies Michael Porter defined the Five Forces Model. Before formally presenting his model, he identified pressures that can hurt potential sales, which include: 1) knowledgeable customers can force down prices by pitting rivals against each other, 2) influential suppliers can drive down profits by charging higher prices for supplies, 3) competition can steal customer, 4) new market entrants can steal potential investment capital, and 5) substitute products can steal customers.

Which of the following is included in Porter’s Five Forces Model?
A. Loyalty expenses.
B. Supply chain management.
C. The power of competitors.
D. Systems thinking.

C. the power of competitors

Kevin Campbell is an incoming freshman at your college. Kevin is frustrated by the cost of books, tuition, and expenses and he also needs to purchase a rather expensive laptop. In an effort to save money, Kevin beings a Facebook group finding other college students who need to purchase laptops. Soon, Kevin’s Facebook group has close to 100,000 students. Kevin decides to collectively approach different computer companies to see if his group qualifies for a special discount. What business strategy is Kevin using to purchase laptops?
A. Collecting business intelligence.
B. Decreasing entry barriers.
C. Purchasing a substitute product.
D. Increasing buyer power.

D. Increasing buyer power

What are costs that make customers reluctant to switch to another product or service?
A. Support activities.
B. Switching costs.
C. Loyalty rewards.
D. Value chain activities.

B. Switching costs

Callie Crystal owns and operates one of the most successful local coffee shops in Denver, called The Edgewater Café. Each time a customer purchases their 100th cup of coffee at The Edgewater Café they receive a free pound of coffee of their choice. What is Callie attempting to create with her unique "Free Pound of Coffee" marketing program?
A. Reducing buyer power with a loyalty program.
B. Increasing buyer power with a loyalty program.
C. Decreasing supplier power with a differentiated product.
D. Creating a substitute product.

A. reducing buyer power with a loyalty program

What includes all parties involved, directly or indirectly, in obtaining raw materials or a product?
A. Support chain.
B. Supply chain.
C. System chain.
D. Supply choice.

B. supply chain

Which of the below represents a company in a supply chain?
A. Customer and competitor.
B. Supplier and competitor.
C. Knowledge worker and supplier.
D. Supplier and customer.

D. supplier and customer

In the center of Porter’s Five Forces model is competition. Which of the below represents the four outer boxes?
A. Buyer power, systems power, threat of false entrants, and threat of substitute products or services
B. Buyer power, systems power, threat of new entrants, and threat of substitute products or services
C. Buyer power, supplier power, threat of new entrants, and threat of substitute products or services
D. Business power, supplier power, threat of new entrants, and threat of powerful services

C. buyer power, supplier power, threat of new entrants, and threat of substitute products or services

Shawn McGill is on the executive board for ABC pharmaceuticals. The company produces the number one selling cancer fighting drug on the market. Due to its incredible success ABC pharmaceuticals has decided to increase the cost of the drug from $8 a pill to $15 a pill. Which force is ABC pharmaceutical using to increase its drug price?
A. Supplier power.
B. Buyer power.
C. Threat of false entrants.
D. Business power.

A. supplier power

What is one of the most common ways a company can decrease supplier power?
A. Charge lower prices.
B. Charge higher prices.
C. Use MIS to find and create alternative products.
D. Companies cannot impact supplier power.

C. use MIS to find and create alternative products

If a supplier has high power what can it do to influence its industry?
A. Charge higher prices.
B. Shift costs to industry participants.
C. Limit quality or services.
D. All of the above.

D. all of the above

When buyer power is low, supplier power is typically _____.
A. Identical
B. High
C. Low
D. Unstable

B. high

How can a company reduce the threat of substitute products or services?
A. Market the product to less than ten customers.
B. Ignore competitive forces.
C. Offer additional value through wider product distribution.
D. Offer less value making the product far more generic and similar to the competition.

C. offer additional value through wider product distribution.

Which one of Porter’s five forces is high when it is easy for new competitors to enter a market and low when there are significant entry barriers to joining a market?
A. Threat of new entrants.
B. Threat of substitute products or services.
C. Threat of buyer power.
D. Supply chain competition.

A. threat of new entrants

John Cleaver is the CEO of Tech World, which is a retail store that sells computers, monitors, cameras, televisions and many other electronic products. John and his executive team are meeting to brainstorm new ideas on how to grow the business. One idea is to mimic a competitor’s product that is attempting to sell a new product in a different industry. After performing a Porter’s Five Forces analysis John determines that all of the forces are high in this new industry. What should John do?
A. Explode into the market with an overflow of the product.
B. Contemplate other products to introduce at the same time in this new market.
C. Compare the competitor’s prices and offer his product lower in this new market.
D. Not introduce the product because all five forces are strong and this would be a highly risky business strategy.

D. not introduce the product because all five forces are strong this would be a highly risky business strategy when the forces are low, this is a great time to execute the business strategy.

What is a feature of a product or service that customers have come to expect and entering competitors must offer the same if they want to survive?
A. Significant barrier.
B. Entry barrier.
C. Product differentiation.
D. Entry chain.

B. entry barrier

Which of the following represents a typical supply chain?
A. Company-Customers-Suppliers.
B. Company-Suppliers-Customers.
C. Suppliers-Company-Customers.
D. Suppliers-Customers-Company.

C. Suppliers-company-customers

Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be easy for you as the new entrants to compete in this market?
A. The threat of new entrants force is high in the up-and-coming market.
B. The threat of new entrants force is low in the up-and-coming market.
C. The threat of new entrants force is impossible to define in the up-and-coming market.
D. All of the above depending on the time of year.

A. the threat of new entrants force is high in the up-and-coming market low when there are significant entry barriers to joining a market.

Imagine you are creating a new product to sell in an up-and-coming market. Which of the below statements indicates that it would be difficult for you to enter this new market?
A. The threat of new entrants force is high in the up-and-coming market.
B. The threat of new entrants force is low in the up-and-coming market.
C. The threat of new entrants force is high during the summer months in the up-and-coming market.
D. All of the above depending on the time of year.

B. the threat of new entrants force is low in the up-and-coming market

Which of the following offers an example where Porter’s five forces are mostly strong and competition is high?
A. A dog walking business.
B. A ski resort.
C. A professional hockey team.
D. All of the above.

A. a dog walking business With Porter’s five forces model, these are all examples of strong forces, where it increases competition: 1) a single consumer purchasing milk, 2) a company that makes pencils, 3) coffee from McDonalds, 4) a dog walking business, and 5) a coffee shop.

Which of the following offers an example where Porter’s five forces are mostly weak and competition is low?
A. An international hotel chain purchasing milk.
B. A coffee shop.
C. A single consumer purchasing milk.
D. A dog walking business.

A. an international hotel chain purchasing milk With Porter’s five forces model, these are all examples of weak forces, where it decreases competition: 1) an international hotel chain purchasing milk, 2) a company that makes airline engines, 3) cancer drugs from a pharmaceutical company, 4) a professional hockey team, and 4) department of Motor Vehicles.

Some industries’ competition is much more intense than others. Retail grocery stores such as Kroger, Safeway, and Albertson’s in the United States experience fierce competition and offer similar marketing campaigns to compete. What is this an example of in terms of Porter’s Five Forces?
A. Rivalry among new entrants.
B. Rivalry among existing competitors.
C. Threat of substitute products or services.
D. Buyer power.

B. rivalry among existing competitors

Amazon.com uses a customer profiling system whenever a customer visits its website. Using this system, Amazon can offer products tailored to that particular customer’s profile and buying pattern. What is Amazon using to achieve this competitive advantage?
A. Rivalry.
B. Buyer power.
C. Product differentiation.
D. Substitute product.

C. product differentiation

Your boss, Ty Jacob, has asked you to analyze the music industry using Porter’s five forces model. Which of the following represents supplier power in the music industry?
A. Established record labels like EMI, Sony, Universal.
B. Walmart, Target, iTunes.
C. Game systems like Wii, social networks like Facebook.
D. Taylor Swift, Beyonce, The Beatles, The Stones.

A. established record labels like EMI, Sony, Universal

Your boss, Ty Jacob, has asked you to analyze the music industry using Porter’s five forces model. Which of the following represents buyer power in the music industry?
A. Established record labels like EMI, Sony, Universal.
B. Walmart, Target, iTunes.
C. Independent record labels.
D. Game systems like Wii, social networks like Facebook.

B. Walmart, Target, iTunes who purchase music from record labels to sell online and in their stores.

Your boss, Ty Jacob, has asked you to analyze the music industry using Porter’s five forces model. Which of the following represents the threat of substitute products or services in the music industry?
A. Established record labels like EMI, Sony, Universal.
B. Independent record labels.
C. Game systems like Wii, social networks like Facebook.
D. Taylor Swift, Beyonce, The Beatles, The Stones.

C. Game systems like Wii, social networks like Facebook offer alternatives or substitute products to purchasing music for a consumer.

Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter’s five forces model. Which of the following represents supplier power in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, coffee.

A. pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.

Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter’s five forces model. Which of the following represents buyer power in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, coffee.
E. Coke and Pepsi submit bids to the owner of a football stadium for the exclusive sale of their products during games.

B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store

Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter’s five forces model. Which of the following represents a threat of a new entrant in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, coffee.

C. Zevia Natural Diet Soda begins selling directly over the internet.

Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter’s five forces model. Which of the following represents a substitute product in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, coffee.

D. Vitamin water, fruit juice, coffee

Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter’s five forces model. Which of the following represents rivalry in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Coke and Pepsi submit bids to the owner of a football stadium for the exclusive sale of their products during games.

D. coke and pepsi submit bids to the owner of a football stadium for the exclusive sale of their products during games.

Porter identified three generic strategies that a business could follow after identifying a market it wanted to enter. Which of the following is not included as one of Porter’s three generic strategies?
A. Broad differentiation.
B. Supplier cost differentiation.
C. Focused strategy.
D. Broad cost leadership.

B. supplier cost differentiation Porter has identified three generic business strategies for entering a new market: 1) broad cost leadership, 2) broad differentiation, and 3) focused strategy.

When analyzing Porter’s three generic strategies for entering a market, if you have a focused strategy what market should you target?
A. A niche market.
B. A broad market.
C. Neither niche nor broad markets.
D. Both niche and broad markets.

A. a niche market

Which of the following offers an example of a company operating in a narrow focused-market operating as the low-cost provider?
A. Walmart.
B. Tiffany & Co.
C. Neiman Marcus.
D. Payless Shoes.

D. payless shoes

Broad differentiation, broad cost leadership, and _________ create the three generic strategies identified by Porter.
A. Narrow market leadership
B. High cost versus low cost
C. Focused strategy
D. None of the above

C. focused strategy

Jennifer Bloom is writing a paper and she must determine which of Porter’s three generic strategies The Museum Company has implemented. Jennifer finds out that The Museum Company offers specialty products found only in museums around the world to affluent customers. What would Jennifer determine The Museum Company is using as its generic strategy?
A. Broad market, low cost.
B. Narrow market, high cost.
C. Broad market, high cost.
D. Narrow market, low cost.

B. narrow market, high cost

According to Porter companies that wish to dominate broad markets should operate using a ________ strategy.
A. Cost leadership with a low cost
B. Differentiation with a low cost
C. Cost leadership with a high cost
D. All of the above

A. cost leadership and low cost

Which of the following demonstrates a company that has implemented a low cost, broad market strategy?
A. Neiman Marcus.
B. Payless Shoes.
C. The Sharper Image.
D. Walmart.

D. Walmart

If a business is following a focused strategy then its competitive scope is _______.
A. Broad market
B. Narrow market
C. Broad range products
D. Broad range of services

B. Narrow market

When applying Porter’s three generic strategies, Tiffany & Co. has a competitive scope and cost strategy that is _________.
A. Broad market-high cost strategy
B. Narrow market-low cost strategy
C. Narrow market-high cost strategy
D. Broad market-low cost strategy

C. Narrow market-high cost strategy

When analyzing the book store industry, some of today’s businesses compete with different business strategies and cost strategies. Which of the following is using a broad market competitive scope along with a low cost strategy?
A. Amazon.com.
B. Any local independent book store that specializes in antique books.
C. Barnes & Noble.
D. Borders books.

A. Amazon.com

Which of the below is similar to focused strategy versus broad strategy?
A. Large market versus leadership.
B. Large market versus uniqueness.
C. Niche market versus large market.
D. Niche market versus generic.

C. niche market vs. large market

Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter’s three generic strategies. Which of the following companies are using a cost leadership strategy?
A. Southwest, Horizon, Frontier, JetBlue.
B. British Airways, Singapore Airlines, Virgin Atlantic.
C. Sky Taxi-a rent by the hour personal plane service.
D. All of the above.

A. southwest, horizon, frontier, jet blue

Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter’s three generic strategies. Which of the following companies are using a differentiation strategy?
A. Southwest, Horizon, Frontier, JetBlue.
B. British Airways, Singapore Airlines, Virgin Atlantic.
C. Sky Taxi-a rent by the hour personal plane service.
D. All of the above.

B. british airways, sngapore airlines, virgin atlantic

Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter’s three generic strategies. Which of the following companies are using a focused strategy?
A. Southwest, Horizon, Frontier, JetBlue.
B. British Airways, Singapore Airlines, Virgin Atlantic.
C. Sky Taxi-a rent by the hour personal plane service.
D. All of the above.

C. sky taxi, a rent by the hour personal plane service

When reviewing Porter’s value chain analysis, which of the below provides customer support after the sale of goods and services?
A. Inbound logistics.
B. Outbound logistics.
C. Operations.
D. Service.

D. service

Which of the below represents procurement as part of the support value activities in a value chain analysis?
A. Purchases inputs such as raw materials, resources, equipment and supplies.
B. Applies MIS to processes to add value.
C. Distributes goods and services to customers.
D. Promotes, prices, and sells products to customers.

A. purchases inputs such as raw materials, resources, equipment, and supplies

What includes support value activities and primary value activities and is used to determine how to create the greatest possible value for customers?
A. Supplier power.
B. Operations management.
C. Porter’s Five Forces Model.
D. The Value Chain analysis.

D. value chain analysis

What is a standardized set of activities that accomplishes a specific task?
A. Business strategy.
B. Business outcome.
C. Business process.
D. Knowledge process.

C. business process

Which of the following analyzes a company’s business processes and is useful for determining how to create the greatest possible value for customers?
A. Product analysis.
B. Primary supplier power.
C. Value chain analysis.
D. Buyer chain analysis.

C. value chain analysis

The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a ________ or _______________.
A. Focused strategy, product differentiation
B. Focused strategy, cost advantage
C. Cost advantage, primary value activities
D. Cost advantage, product differentiation

D. cost advantage, product differentiation

What are the two main categories in a value chain analysis?
A. Primary value activities & secondary value activities.
B. Primary value activities & support value activities.
C. Primary value activities & strengthening value activities.
D. None of the above.

B. primary value activities, and support value activities

Which of the following is not considered a category within the primary value activities in a value chain analysis?
A. Inbound logistics.
B. Firm infrastructure.
C. Operations.
D. Service.

B. firm infrastructure Primary value activities are found at the bottom of the value chain, these include business processes that acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services.

Which of the following is not considered a category within the support value activities in a value chain analysis?
A. Technology development.
B. Outbound logistics.
C. Human resource management.
D. Firm infrastructure.

B. outbound logistics top of the value chain and includes business processes, such as firm infrastructure, human resource management, technology development, and procurement, that support the primary value activities.

What is the support value activity that provides employees with training, hiring, and compensation?
A. Procurement.
B. Operations resource management.
C. Human resource management.
D. Firm infrastructure.

C. human resources management

Sandy Fiero works as the Chief Knowledge Officer for Bend Lumbar Company. She has been given the responsibility to create a product or service that will bring an added value to its customers to increase the company’s revenue. Sandy determines that the best value she can add is by creating a service that offers free next day shipping on any order over $50. Where in the value chain is Sandy adding value?
A. The primary value activity outbound logistics.
B. The primary value activity inbound logistics.
C. The primary value activity marketing and sales.
D. The primary value activity operations.

A. primary value activity outbound logistics Outbound logistics distributes goods and services to customers.

When evaluating the value chain, all of the following are included in the primary value activities except:
A. Inbound activities.
B. Operations.
C. Service.
D. MIS development.

D. MIS development

When evaluating the value chain, which of the following is included in the support value activities?
A. Inbound activities.
B. Marketing and sales.
C. Firm infrastructure.
D. Finance and sales.

C. firm infrastructure

Which of the following decisions does a firm need to make as soon as it has identified the activities from the value chain that are bringing the highest added value to their customers?
A. Target high value-adding activities to further enhance their value.
B. Target low value-adding activities to increase their value.
C. Perform some combination of the two.
D. All of the above.

D. all of the above

MIS can add value to both primary activities and support activities in the value chain. Which of the following is not an example of a company adding value by the use of MIS in a primary activity?
A. Scottrade Corp. creating an online system for employees to track paychecks, benefits, wellness rewards program, and other employee benefit items.
B. A system for the sales and marketing departments to track specific sales targets and follow up processes.
C. An easy electronic survey, similar to the survey monkey, to be sent to the customer right after a service was completed.
D. Royal Crest Dairy using their custom order and delivery system through an easily accessible Web portal for the customer to track delivery status.

A. scottrade corp. creating an online system – support value activity

MIS can add value to both primary and support activities within a business. Which of the following is not an example of a company adding value by the use of MIS in a support activity?
A. Netflix creating a business strategy for the video rental market that delivers videos via the mail.
B. The human resources department creates a tracking system to efficiently reward employees based on their performance.
C. Scottrade Corp. creating an online system for employees to track paychecks, benefits, wellness rewards program, and other employee benefit items.
D. The University of Forks creates a program to automatically order office supplies such as pens and pads of paper for its employees.

A. netflix creating a business strategy – primary value activity