Week Two

Question 1

What is a strategic information system?

Answer 1

A system that changes the goals, operations, products, services, or environmental relationships of organizations to help them gain an edge over competitors

It provides information for the strategic management of the organization.

Question 2

How does a strategic information system change competition? List the ways.

Answer 2

• Changes industry structure
• Changes the rules of competition
• Changes the basis of competition
• Creates new products and industries

These changes can lead to new ways to compete.

Question 3

What is a competitive necessity?

Answer 3

A system that is necessary to compete in an industry

Just having the system is no real advantage, but not having it keeps you out of the industry.

Question 4

Give two examples of competitive necessities.

Answer 4

• Banks: Online bill pay
• Airplanes: Auto-pilot

These systems are essential for operating in their respective industries.

Question 5

Define competitive advantage.

Answer 5

Significant, long-term benefit to a company over its competition

The ability to establish and maintain a competitive advantage is vital to a company’s success.

Question 6

What are the four factors that affect competition in an industry?

Answer 6

• Rivalry among existing competition
• Threat to new entrants
• Threat to substitute products and services
• Bargaining power of customers and suppliers

These factors are critical in analyzing the competitive environment of a market.

Question 7

What is another term for strategic advantage?

Answer 7

sustainable competitive advantage

This term refers to a firm’s ability to maintain its competitive edge over time.

Question 8

List the requirements for a system to achieve strategic advantage.

Answer 8

• Reduces costs or adds value for customers and users
• Entails substantial switching costs for the customer or user
• Has a small window of opportunity

These requirements help ensure that the strategic advantage is effective and sustainable.

Question 9

What is a source of advantage?

Answer 9

• Build barriers to entry
• Build in switching costs to lock in customers
• Change the basis of competition
• Change the balance of power in supplier relationships
• Differentiate or create new products and services

Sources of advantage help firms establish a stronger position in the market.

Question 10

True or false: Sustaining competitive advantage can only be achieved by reducing costs.

Answer 10

FALSE

A firm can sustain competitive advantage by either reducing costs or increasing revenue through differentiation.

Question 11

A firm is said to have a sustained competitive advantage when it implements a valuable strategy and other firms face a significant disadvantage in acquiring the _______.

Answer 11

resources necessary to implement this strategy

This definition emphasizes the importance of resource acquisition in maintaining competitive advantage.

Question 12

What does Consumer Behavior attempt to explain?

Answer 12

• What consumers purchase
• Where they buy
• When they buy
• How much they buy
• Why they buy

Understanding consumer behavior is crucial for businesses to tailor their marketing strategies effectively.

Question 13

What are the Consumer Behavior Models used for?

Answer 13

• Predicting consumer decisions
• Explaining a wide range of consumer decisions

These models consider demographic factors and other immediate variables influencing consumer behavior.

Question 14

What is a primary reason consumers shop online?

Answer 14

Convenience

Online shopping offers ease of access and time-saving benefits compared to traditional shopping.

Question 15

List the 5 stages of the consumer decision process.

Answer 15

• Awareness of need or want
• Search for more information
• Evaluation of alternatives
• Actual purchase decision
• Post-purchase contact

This decision process is similar for both online and offline consumer behavior.

Question 16

What are the components of the General online behavior model?

Answer 16

• Consumer skills
• Product characteristics
• Attitudes toward online purchasing
• Perceptions about control over Web environment
• Web site features: latency, usability, security

These components influence how consumers interact with online shopping platforms.

Question 17

What does Clickstream Behavior refer to?

Answer 17

The tracking of consumer navigation patterns on the web

Understanding clickstream behavior helps businesses optimize their online presence and improve user experience.

Question 18

What is a clickstream?

Answer 18

The recording of the parts of the screen a computer user clicks on

It involves tracking interactions within the web server, web browser, router, proxy server, or ad server.

Question 19

Name one use of clickstream analysis.

Answer 19

• Web activity analysis
• Software testing
• Market research
• Analyzing employee activity

Clickstream analysis helps understand user behavior and improve services.

Question 20

True or false: Men and women navigate websites in the same patterns.

Answer 20

FALSE

Men tend to navigate in specific, direct patterns, whereas women browse more extensively.

Question 21

What percentage of internet users are classified as shoppers?

Answer 21

89%

This includes both buyers and browsers.

Question 22

What percentage of internet users are buyers?

Answer 22

13%

The remaining users are browsers who may purchase offline.

Question 23

What fraction of offline retail purchases are influenced by online activities?

Answer 23

One-third

This indicates the significant impact of online presence on offline shopping.

Question 24

E-commerce and traditional commerce are part of a continuum of what behavior?

Answer 24

Consuming

This highlights the interconnectedness of online and offline shopping experiences.

Question 25

How do shoppers typically find **online vendors**?

Answer 25

* Search engines * Marketplaces (Amazon, eBay) * Specific retail sites ## Footnote These methods reflect the various ways consumers navigate the online shopping landscape.

Question 26

What percentage of **internet users** do not shop online?

Answer 26

27% ## Footnote This statistic highlights the barriers some consumers face in online shopping.

Question 27

DELETE

Answer 27

* Trust factor * Hassle factors (shipping costs, returns, etc.) ## Footnote These factors contribute to the reluctance of some consumers to shop online.

Question 28

List the four characteristics of **effective internet marketing**.

Answer 28

* More personalized * More participatory * More peer-to-peer * More communal ## Footnote The most effective internet marketing strategies incorporate all four characteristics.

Question 29

What are the components of a **Multi-Channel Marketing Plan**?

Answer 29

* Website * Traditional online marketing (search engine, display, email, affiliate) * Social marketing (social networks, blogs, video games) * Mobile marketing (mobile/tablet sites/apps) * Offline marketing (television, radio, newspapers) ## Footnote A comprehensive marketing plan utilizes multiple channels to reach consumers.

Question 30

What are the **types of online advertising** mentioned?

Answer 30

* Display * Search * Mobile messaging * Sponsorships * Lead generation * Email ## Footnote Online advertising is the fastest growing form of advertising.

Question 31

What is the **fastest growing form** of advertising?

Answer 31

Online advertising ## Footnote This form of advertising targets a predominantly online audience aged 18-34.

Question 32

List the **advantages** of online advertising.

Answer 32

* 18-34 audience is online * Ad targeting * Price discrimination * Personalization ## Footnote These advantages contribute to the effectiveness of online advertising.

Question 33

What are the components of **traditional online marketing**?

Answer 33

* Search engine marketing and advertising * Display ad marketing * Email marketing * Affiliate marketing * Lead generation marketing * Social, mobile, and local marketing and advertising ## Footnote Traditional online marketing encompasses various strategies to reach consumers.

Question 34

DELETE

Answer 34

Overall performance ## Footnote Information systems promote synergies and enhance core competencies.

Question 35

Define **synergies** in the context of business.

Answer 35

When output of some units is used as inputs to others, or organizations pool markets and expertise ## Footnote An example is the purchase of YouTube by Google.

Question 36

What are **core competencies**?

Answer 36

Activity for which a firm is a world-class leader ## Footnote Core competencies rely on knowledge, experience, and sharing this across business units.

Question 37

What is a **business model**?

Answer 37

A summary of a business's strategic direction that outlines how objectives will be achieved ## Footnote It reflects what a company does, how it uniquely does it, how it gets paid, key resources and activities needed, and costs involved.

Question 38

What does a **revenue model** describe?

Answer 38

How the firm will earn revenue, generate profits, and produce a superior return on invested capital ## Footnote It is a crucial component of a business model.

Question 39

Define **freemium**.

Answer 39

A model where an organization gives away limited versions of a product or service to build a large customer base and then charges for unrestricted versions ## Footnote Usually operates on a subscription basis.

Question 40

What is a **platform-based business model**?

Answer 40

A digital platform that enables other businesses or users to co-create value ## Footnote Examples include Amazon, Airbnb, and Uber.

Question 41

List the types of value created/exchanged in a platform-based business model.

Answer 41

* Products * Services * Payments * Investments & Funding ## Footnote These categories illustrate the diverse interactions facilitated by digital platforms.

Question 42

The value of the **app store platform** depends on what?

Answer 42

* The number of users on the same side * The number of users on the other side ## Footnote This highlights the importance of user interaction in platform-based business models.

Question 43

Define **sharing economy**.

Answer 43

An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the internet ## Footnote This model emphasizes the use of technology to facilitate sharing.

Question 44

Under a **service-based business model**, what can a manufacturer offer?

Answer 44

* Equipment services * Maintenance contracts ## Footnote An example is Roll Range selling jet engines near cost while generating revenue from maintenance contracts.

Question 45

What is the role of **innovation** in organizations?

Answer 45

Key for gaining or sustaining a competitive advantage ## Footnote Innovation involves creating new products or services that return value to the organization.

Question 46

What are **radical innovations** also known as?

Answer 46

Disruptive innovations ## Footnote These innovations use markedly new or different technology to access new customer segments and create greater benefits.

Question 47

True or false: **Innovation** can be beneficial when integrating external stakeholders into the innovation process.

Answer 47

TRUE ## Footnote Involving external stakeholders can enhance the innovation process.

Question 48

The value of the **app store platform** depends on what?

Answer 48

* The number of users on the same side * The number of users on the other side ## Footnote This highlights the importance of user interaction in platform-based business models.

Question 49

Define **sharing economy**.

Answer 49

An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the internet ## Footnote This model emphasizes the use of technology to facilitate sharing.

Question 50

Under a **service-based business model**, what can a manufacturer offer?

Answer 50

* Equipment services * Maintenance contracts ## Footnote An example is Roll Range selling jet engines near cost while generating revenue from maintenance contracts.

Question 51

What is the role of **innovation** in organizations?

Answer 51

Key for gaining or sustaining a competitive advantage ## Footnote Innovation involves creating new products or services that return value to the organization.

Question 52

What are **radical innovations** also known as?

Answer 52

Disruptive innovations ## Footnote These innovations use markedly new or different technology to access new customer segments and create greater benefits.

Question 53

True or false: **Innovation** can be beneficial when integrating external stakeholders into the innovation process.

Answer 53

TRUE ## Footnote Involving external stakeholders can enhance the innovation process.

Question 54

What is the purpose of the **Innovation Process**?

Answer 54

To gain a competitive advantage in operational efficiencies ## Footnote If used for innovative products, services, or processes, it creates a longer-lasting competitive advantage.

Question 55

Why is it harder for rivals to compete when using **innovation** for products, services, or processes?

Answer 55

It creates a longer-lasting, sustainable competitive advantage ## Footnote Example: Waze developed a unique algorithm that integrated map data and real-time traffic information.

Question 56

What does the **Lean Startup Methodology** provide?

Answer 56

A framework for continuous innovation ## Footnote It allows for flexible experimentation with different solutions or business models quickly.

Question 57

What is the concept of **crowdfunding** in business financing?

Answer 57

Financing from individuals in the marketplace in exchange for certain benefits ## Footnote Investors and startups can draw on many sources for support.