ITM EXAM 1 Study Guide Questions with
All Accurate Answers 2026-2027
Updated.
What is MIS? - Answer the management and use of processes, information systems, and
information to help organizations achieve their strategies
Determining Industry Structure and Competitive Strategy - Answer Industry structure:
defining characteristics of an industry
determining potential for profitability in an industry
determining sustainability.
A. Existing competitive rivalry- - Answer how intense is the competition? How many existing
competitors? High = few competitors equally selling, easy switching costs, advertising and price
wars hurt bottom line.
B. threat of new entrants- - Answer how easy or difficult to join the marketplace? Easy =
greater risk of market share being depleted. Barriers to entry: cost advantages, access to inputs,
brand recognition, economies of scale, regulatory barriers.
C. threat of substitutes - - Answer how easy is it for consumers to switch to a competitor or a
similar product/service? How many competitors/substitutes? How do prices and quality
compare? Switching costs & buyers inclination to change.
E. bargaining of customers- - Answer how much power does the consumer have to affect
pricing and quality? High power→ less consumers, many sellers, easy switching costs. Low
power→ purchase products in small volume, seller's product vary different from competitors.
D. bargaining of suppliers- - Answer How much power does the supplier have? Power to raise
prices on inputs, number of suppliers available, switching costs, substitutes.
Porter's Four Competitive Strategies: - Answer cost, differentiation, industry wide, focus
Industry wide cost → lowest cost in whole industry
Industry wide differentiation → doesn't have lowest cost but offers something else, like better
customer service
, Focus cost → lowest cost within an industry segment
Focus differentiation → doesn't have lowest cost but offers something else, like better customer
service.
Value Chains - Answer Value → is the amount of money a customer is willing to pay
Margin → is the difference between value and cost
Value chain → is the network of activities to create value
5 Primary Activities : - Answer Inbound logistics : receiving, storing, and disseminating inputs
to products
operations/ manufacturing : transforming inputs into final products
Outbound logistics : collecting, storing, and physically distributing products to buyers
Sales and marketing: inducing buyers to purchase products and providing a means for them to
do so
Customer service : assisting customers use of products and thus maintaining and enhancing the
products value
Secondary Activities: - Answer Procurement→ time spent finding suppliers
Technology → computer systems
Human resources
Firm infrastructure
Value Chain Linkages - Answer A value chain is a set of activities that a firm operating in a
specific industry performs in order to deliver a valuable product or service for the market. ... In
Porter's value chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales,
and Service are categorized as primary activities.
*Competitive strategy drives value chain activities → value chain activities determine business
processes → business processes are supported by information systems
What is a business process? - Answer A sequence of activities for accomplishing a function
Activities are tasks within a process
How much detail is enough? - Answer Doesn't need to be a detailed instruction manual
Provide enough granularity to fully describe the process
Include enough activities to avoid ambiguity
All Accurate Answers 2026-2027
Updated.
What is MIS? - Answer the management and use of processes, information systems, and
information to help organizations achieve their strategies
Determining Industry Structure and Competitive Strategy - Answer Industry structure:
defining characteristics of an industry
determining potential for profitability in an industry
determining sustainability.
A. Existing competitive rivalry- - Answer how intense is the competition? How many existing
competitors? High = few competitors equally selling, easy switching costs, advertising and price
wars hurt bottom line.
B. threat of new entrants- - Answer how easy or difficult to join the marketplace? Easy =
greater risk of market share being depleted. Barriers to entry: cost advantages, access to inputs,
brand recognition, economies of scale, regulatory barriers.
C. threat of substitutes - - Answer how easy is it for consumers to switch to a competitor or a
similar product/service? How many competitors/substitutes? How do prices and quality
compare? Switching costs & buyers inclination to change.
E. bargaining of customers- - Answer how much power does the consumer have to affect
pricing and quality? High power→ less consumers, many sellers, easy switching costs. Low
power→ purchase products in small volume, seller's product vary different from competitors.
D. bargaining of suppliers- - Answer How much power does the supplier have? Power to raise
prices on inputs, number of suppliers available, switching costs, substitutes.
Porter's Four Competitive Strategies: - Answer cost, differentiation, industry wide, focus
Industry wide cost → lowest cost in whole industry
Industry wide differentiation → doesn't have lowest cost but offers something else, like better
customer service
, Focus cost → lowest cost within an industry segment
Focus differentiation → doesn't have lowest cost but offers something else, like better customer
service.
Value Chains - Answer Value → is the amount of money a customer is willing to pay
Margin → is the difference between value and cost
Value chain → is the network of activities to create value
5 Primary Activities : - Answer Inbound logistics : receiving, storing, and disseminating inputs
to products
operations/ manufacturing : transforming inputs into final products
Outbound logistics : collecting, storing, and physically distributing products to buyers
Sales and marketing: inducing buyers to purchase products and providing a means for them to
do so
Customer service : assisting customers use of products and thus maintaining and enhancing the
products value
Secondary Activities: - Answer Procurement→ time spent finding suppliers
Technology → computer systems
Human resources
Firm infrastructure
Value Chain Linkages - Answer A value chain is a set of activities that a firm operating in a
specific industry performs in order to deliver a valuable product or service for the market. ... In
Porter's value chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales,
and Service are categorized as primary activities.
*Competitive strategy drives value chain activities → value chain activities determine business
processes → business processes are supported by information systems
What is a business process? - Answer A sequence of activities for accomplishing a function
Activities are tasks within a process
How much detail is enough? - Answer Doesn't need to be a detailed instruction manual
Provide enough granularity to fully describe the process
Include enough activities to avoid ambiguity
