MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
Social Forces - (answer)-Societal values
-Trends
-Traditions
-Religious practices
-Concern for the environment
Social Forces Case #1 Eating Habits - (answer)-Consumers "super size" at record rates while demanding
healthier foods.
-Many fast food restaurants have been "supersizing" their meal combinations by adding extra fries and
larger drinks, while at the same time expanding alternatives for items such as grilled chicken sandwiches
and salads
Social Forces Case #2 Automobiles - (answer)Contrary to demand patterns in other parts of the world,
demand for large vehicles remains strong in the U.S. amidst cries for greater fuel economy.
Social Forces: Global Concerns - (answer)-Firms operating in multiple countries must address multiple
sets of social forces.
-Social forces are influenced by national culture, the generally accepted values, traditions, and patterns
of behavior in a society. Firms should recognize these cultural differences.
-Some firms struggle because their managers consciously refer to their own cultural values as a standard
of judgment, a phenomenon known as the self-reference criterion.
Technological Forces - (answer)-Scientific improvements & innovations
-The Internet is arguably the most pervasive technological force affecting most industries.
,MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
The World is Flat (Thomas Friedman, 2005) - (answer)During the dot-com bubble of the late 1990s,
telecommunications firms laid fiber optic cables across the oceans to connect the U.S. with China and
India.
Since the dot-com bust, these cables have provided high quality, low cost contact with developing
nations, "leveling the playing field."
"Any activity that can be digitized and moved around will get moved around."
Strategy and The Internet - (answer)-Has the Internet created new business models or just altered the
old ones?
-Although the Internet plays a substantial role, critics challenge the notion that "new business models"
are needed to compete in the "new economy." Michael Porter and others argue that the market forces
that governed the traditional economy have not disappeared in the Internet economy.
Disaggregation & Reaggregation - (answer)-Large firms exist because they can perform most tasks—raw
material procurement, production, human resource management, sales, and so forth—more efficiently
than they would otherwise be performed if they were "outsourced" to the open market.
-Today, many progressive firms have "disaggregated" by no longer perform all of their functional
activities, but instead "reaggregate" by searching for partners who can perform some of the activities
more efficiently.
Strategic Dimensions of the Internet - (answer)-The Internet has influenced strategic management in
very specific ways.
-Contrary to early expectations, the Internet has not always generated greater profits for businesses.
Consumers have benefitted immensely.
-Five Strategic Dimension of the Internet are addressed in the following slides.
,MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
Dimension #1: Movement toward information symmetry- - (answer)Typical markets are characterized by
information asymmetry, whereby sellers control key information that is not available to buyers. The
Internet promotes information symmetry, whereby buyers and sellers share information.
Dimension #2: Internet as distribution channel - (answer)The Internet acts as a distribution channel for
non-tangible goods and services. Consumers can purchase items such as airline tickets, insurance,
stocks, and computer software online without the necessity of physical delivery.
Dimension #3: Speed - (answer)The Internet offers numerous opportunities to improve the speed of the
actual transaction, as well as the process that leads up to and follows it.
Dimension #4: Interactivity - (answer)Consumers discuss their experiences with products and services on
bulletin boards or in chat rooms. Firms can readily exchange information with trade associations that
represent their industries.
Dimension #5: Potential for cost reductions and cost shifting - (answer)The Internet provides many
businesses with opportunities to minimize their costs—both fixed and variable—and thereby enhance
flexibility.
Forms of Electronic Commerce - (answer)B2B, B2C, B2G.
C2B, C2C
Forms of Electronic Commerce - (answer)Many traditional firms are integrating e-commerce into their
existing business models
These firms are attempting to build synergy between traditional and virtual storefronts.
Commoditization & Mass Customization - (answer)-Commoditization—Firms are having a more difficult
time distinguishing their products and services from those of their rivals.
, MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
-Products from digital cameras to cake mix have become more differentiated, creating too many options
for buyers. To simplify, buyers tend to reduce the purchase decision to a few factors such as key
features or quality. If they cannot distinguish among the competitors along these factors, they may view
the product as a commodity and base their final purchase decision on price.
Mass Customization - (answer)is the ability to individualize product and service offerings to meet
specific buyer needs.
-Personalization does not occur at the expense of economies of scale.
-Technology has enabled firms to engage in mass customization.
Environmental Scanning - (answer)-Definition—the systematic collection and analysis of information
about relevant macroenvironmental trends.
}Keeping up with business trends is a form of environmental scanning.
-Today, obtaining key information is often not the problem. The real challenge is making sense of the
deluge of reports, press releases, statistics, and other information.
Case Analysis Steps 7-8Social & Technological Forces - (answer)}Identify the specific social (step 7) and
technological (step 8) forces that affect the industry.
}Specify precisely how the factors identified affect the industry.
}Focus on the industry, not the firm. Specific applications to the firm come later.
Business-to-Business (B2B): - (answer)The segment of electronic commerce whereby businesses utilize
the Internet to solicit transactions from each other.
Business-to-Consumer (B2C): - (answer)The segment of electronic commerce whereby businesses utilize
the Internet to solicit transactions from consumers, also known as etailing.
Social Forces - (answer)-Societal values
-Trends
-Traditions
-Religious practices
-Concern for the environment
Social Forces Case #1 Eating Habits - (answer)-Consumers "super size" at record rates while demanding
healthier foods.
-Many fast food restaurants have been "supersizing" their meal combinations by adding extra fries and
larger drinks, while at the same time expanding alternatives for items such as grilled chicken sandwiches
and salads
Social Forces Case #2 Automobiles - (answer)Contrary to demand patterns in other parts of the world,
demand for large vehicles remains strong in the U.S. amidst cries for greater fuel economy.
Social Forces: Global Concerns - (answer)-Firms operating in multiple countries must address multiple
sets of social forces.
-Social forces are influenced by national culture, the generally accepted values, traditions, and patterns
of behavior in a society. Firms should recognize these cultural differences.
-Some firms struggle because their managers consciously refer to their own cultural values as a standard
of judgment, a phenomenon known as the self-reference criterion.
Technological Forces - (answer)-Scientific improvements & innovations
-The Internet is arguably the most pervasive technological force affecting most industries.
,MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
The World is Flat (Thomas Friedman, 2005) - (answer)During the dot-com bubble of the late 1990s,
telecommunications firms laid fiber optic cables across the oceans to connect the U.S. with China and
India.
Since the dot-com bust, these cables have provided high quality, low cost contact with developing
nations, "leveling the playing field."
"Any activity that can be digitized and moved around will get moved around."
Strategy and The Internet - (answer)-Has the Internet created new business models or just altered the
old ones?
-Although the Internet plays a substantial role, critics challenge the notion that "new business models"
are needed to compete in the "new economy." Michael Porter and others argue that the market forces
that governed the traditional economy have not disappeared in the Internet economy.
Disaggregation & Reaggregation - (answer)-Large firms exist because they can perform most tasks—raw
material procurement, production, human resource management, sales, and so forth—more efficiently
than they would otherwise be performed if they were "outsourced" to the open market.
-Today, many progressive firms have "disaggregated" by no longer perform all of their functional
activities, but instead "reaggregate" by searching for partners who can perform some of the activities
more efficiently.
Strategic Dimensions of the Internet - (answer)-The Internet has influenced strategic management in
very specific ways.
-Contrary to early expectations, the Internet has not always generated greater profits for businesses.
Consumers have benefitted immensely.
-Five Strategic Dimension of the Internet are addressed in the following slides.
,MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
Dimension #1: Movement toward information symmetry- - (answer)Typical markets are characterized by
information asymmetry, whereby sellers control key information that is not available to buyers. The
Internet promotes information symmetry, whereby buyers and sellers share information.
Dimension #2: Internet as distribution channel - (answer)The Internet acts as a distribution channel for
non-tangible goods and services. Consumers can purchase items such as airline tickets, insurance,
stocks, and computer software online without the necessity of physical delivery.
Dimension #3: Speed - (answer)The Internet offers numerous opportunities to improve the speed of the
actual transaction, as well as the process that leads up to and follows it.
Dimension #4: Interactivity - (answer)Consumers discuss their experiences with products and services on
bulletin boards or in chat rooms. Firms can readily exchange information with trade associations that
represent their industries.
Dimension #5: Potential for cost reductions and cost shifting - (answer)The Internet provides many
businesses with opportunities to minimize their costs—both fixed and variable—and thereby enhance
flexibility.
Forms of Electronic Commerce - (answer)B2B, B2C, B2G.
C2B, C2C
Forms of Electronic Commerce - (answer)Many traditional firms are integrating e-commerce into their
existing business models
These firms are attempting to build synergy between traditional and virtual storefronts.
Commoditization & Mass Customization - (answer)-Commoditization—Firms are having a more difficult
time distinguishing their products and services from those of their rivals.
, MBA 705 Exam 2 – Advanced Business Administration Study Guide & Practice
-Products from digital cameras to cake mix have become more differentiated, creating too many options
for buyers. To simplify, buyers tend to reduce the purchase decision to a few factors such as key
features or quality. If they cannot distinguish among the competitors along these factors, they may view
the product as a commodity and base their final purchase decision on price.
Mass Customization - (answer)is the ability to individualize product and service offerings to meet
specific buyer needs.
-Personalization does not occur at the expense of economies of scale.
-Technology has enabled firms to engage in mass customization.
Environmental Scanning - (answer)-Definition—the systematic collection and analysis of information
about relevant macroenvironmental trends.
}Keeping up with business trends is a form of environmental scanning.
-Today, obtaining key information is often not the problem. The real challenge is making sense of the
deluge of reports, press releases, statistics, and other information.
Case Analysis Steps 7-8Social & Technological Forces - (answer)}Identify the specific social (step 7) and
technological (step 8) forces that affect the industry.
}Specify precisely how the factors identified affect the industry.
}Focus on the industry, not the firm. Specific applications to the firm come later.
Business-to-Business (B2B): - (answer)The segment of electronic commerce whereby businesses utilize
the Internet to solicit transactions from each other.
Business-to-Consumer (B2C): - (answer)The segment of electronic commerce whereby businesses utilize
the Internet to solicit transactions from consumers, also known as etailing.
