LSUS MBA 776 EXAM 2 EXAMPREP QUESTIONS
AND DETAILED SOLUTIONS
◉ What is Carr's argument regarding IT in business?
Answer: Carr argues that IT has become a commodity and should be
managed for low cost and efficiency rather than as a source of
strategic advantage.
◉ Define 'Competitive Advantage'.
Answer: A condition where a firm earns above-average profits in its
industry.
◉ What are the two types of Competitive Advantage?
Answer: Cost Advantage (operating more cheaply) and
Differentiation Advantage (offering unique value).
◉ What is the Value Chain model?
Answer: A framework that shows how businesses create value
through primary activities (like logistics and marketing) and
support activities (like HR and technology development).
◉ What are Porter's Five Forces?
,Answer: A framework for analyzing industry competition, including
Threat of New Entrants, Bargaining Power of Suppliers, Bargaining
Power of Buyers, Threat of Substitute Products, and Rivalry Among
Existing Competitors.
◉ What does the Threat of Substitutes refer to?
Answer: Alternative products or services that fulfill the same need,
which can cap industry profits.
◉ How does the Bargaining Power of Suppliers affect businesses?
Answer: Powerful suppliers can demand higher prices or limit
quality, impacting profitability.
◉ What increases the Bargaining Power of Buyers?
Answer: When buyers have many choices, buy in large volumes, or
can easily switch providers.
◉ What are Barriers to Entry?
Answer: Factors that protect existing firms from new competitors,
such as economies of scale and brand loyalty.
◉ What is the impact of Rivalry Among Existing Competitors?
Answer: Intense rivalry can lower profitability due to price
competition and increased marketing costs.
, ◉ What is a Strategic Information System (SIS)?
Answer: An IT system designed to give a business a competitive edge
through lower costs, differentiation, niche focus, or innovation.
◉ What is a Business Process Management System (BPMS)?
Answer: A system that improves business processes by integrating
IT and workflows.
◉ What is Electronic Data Interchange (EDI)?
Answer: A computer-to-computer exchange of standard documents
that reduces costs and errors.
◉ What is a Decision Support System (DSS)?
Answer: An IT system that assists with semi-structured decisions by
combining data with expert judgment.
◉ What is the significance of the Isabel system in healthcare?
Answer: It is an example of a Decision Support System that uses
clinical data to suggest diagnoses and flag critical conditions.
◉ What key insight did Brynjolfsson & McAfee provide regarding IT
investments?
AND DETAILED SOLUTIONS
◉ What is Carr's argument regarding IT in business?
Answer: Carr argues that IT has become a commodity and should be
managed for low cost and efficiency rather than as a source of
strategic advantage.
◉ Define 'Competitive Advantage'.
Answer: A condition where a firm earns above-average profits in its
industry.
◉ What are the two types of Competitive Advantage?
Answer: Cost Advantage (operating more cheaply) and
Differentiation Advantage (offering unique value).
◉ What is the Value Chain model?
Answer: A framework that shows how businesses create value
through primary activities (like logistics and marketing) and
support activities (like HR and technology development).
◉ What are Porter's Five Forces?
,Answer: A framework for analyzing industry competition, including
Threat of New Entrants, Bargaining Power of Suppliers, Bargaining
Power of Buyers, Threat of Substitute Products, and Rivalry Among
Existing Competitors.
◉ What does the Threat of Substitutes refer to?
Answer: Alternative products or services that fulfill the same need,
which can cap industry profits.
◉ How does the Bargaining Power of Suppliers affect businesses?
Answer: Powerful suppliers can demand higher prices or limit
quality, impacting profitability.
◉ What increases the Bargaining Power of Buyers?
Answer: When buyers have many choices, buy in large volumes, or
can easily switch providers.
◉ What are Barriers to Entry?
Answer: Factors that protect existing firms from new competitors,
such as economies of scale and brand loyalty.
◉ What is the impact of Rivalry Among Existing Competitors?
Answer: Intense rivalry can lower profitability due to price
competition and increased marketing costs.
, ◉ What is a Strategic Information System (SIS)?
Answer: An IT system designed to give a business a competitive edge
through lower costs, differentiation, niche focus, or innovation.
◉ What is a Business Process Management System (BPMS)?
Answer: A system that improves business processes by integrating
IT and workflows.
◉ What is Electronic Data Interchange (EDI)?
Answer: A computer-to-computer exchange of standard documents
that reduces costs and errors.
◉ What is a Decision Support System (DSS)?
Answer: An IT system that assists with semi-structured decisions by
combining data with expert judgment.
◉ What is the significance of the Isabel system in healthcare?
Answer: It is an example of a Decision Support System that uses
clinical data to suggest diagnoses and flag critical conditions.
◉ What key insight did Brynjolfsson & McAfee provide regarding IT
investments?
