ISTM 209 - Chapter 3 Questions and
Answers
Michael Porter's Competitive Forces Mode - correct answer-✅Michael Porter's competitive forces
model. This model provides a general view of the firm, its competitors, and the firm's environment.
Recall in Chapter 2 we described the importance of a firm's environment and the dependence of firms
on environments. Porter's model is all about the firm's general business environment.
Efficient Customer Response System - correct answer-✅efficient customer response system. An efficient
customer response system directly links consumer behavior to distribution and production and supply
chains.
Mass Customization - correct answer-✅This ability to offer individually tailored products or services
using the same production resources as mass production is called mass customization.
INFORMATION SYSTEM STRATEGIES FOR DEALING WITH COMPETITIVE FORCES - correct answer-✅1)
Align the IT with the Business Objectives
2) Low-Cost Leadership
3) Product Differentiation
4) Focus on Market Niche
5) Strengthen Customer and Supplier Intimacy
Benchmarking - correct answer-✅Benchmarking involves comparing the efficiency and effectiveness of
your business processes against strict standards and then measuring performance against those
standards.
Best practices - correct answer-✅Industry best practices are usually identified by consulting companies,
research organizations, government agencies, and industry associations as the most successful solutions
or problem- solving methods for consistently and effectively achieving a business objective.
Value Web - correct answer-✅A value web is a collection of independent firms that use information
technology to coordinate their value chains to produce a product or service for a market collectively. It is
more customer driven and operates in a less linear fashion than the traditional value chain.
Synergies - correct answer-✅The idea of synergies is that when the output of some units can be used as
inputs to other units, or two organizations can pool markets and expertise, these relationships lower
costs and generate profits.
Core Competency - correct answer-✅A core competency is an activity for which a firm is a world- class
leader. Core competencies may involve being the world's best miniature parts designer, the best package
delivery service, or the best thin- film manufacturer. In general, a core competency relies on knowledge
that is gained over many years of experience and a first- class research organization, or simply key people
who follow the literature and stay abreast of new external knowledge.
Network Economics - correct answer-✅Business models based on a network may help firms
strategically by taking advantage of network economics. In traditional economics— the economics of
factories and agriculture— production experiences diminishing returns. The more any given resource is
applied to production, the lower the marginal gain in output, until a point is reached where the
additional inputs produce no additional outputs. This is the law of diminishing returns, and it is the
foundation for most of modern economics.
Virtual Company - correct answer-✅A virtual company, also known as a virtual organization, uses
networks to link people, assets, and ideas, enabling it to ally with other companies to create and
distribute products and services without being limited by traditional organizational boundaries or
physical locations. One company can use the capabilities of another company without being physically
tied to that company. The virtual company model is useful when a company finds it cheaper to acquire
Answers
Michael Porter's Competitive Forces Mode - correct answer-✅Michael Porter's competitive forces
model. This model provides a general view of the firm, its competitors, and the firm's environment.
Recall in Chapter 2 we described the importance of a firm's environment and the dependence of firms
on environments. Porter's model is all about the firm's general business environment.
Efficient Customer Response System - correct answer-✅efficient customer response system. An efficient
customer response system directly links consumer behavior to distribution and production and supply
chains.
Mass Customization - correct answer-✅This ability to offer individually tailored products or services
using the same production resources as mass production is called mass customization.
INFORMATION SYSTEM STRATEGIES FOR DEALING WITH COMPETITIVE FORCES - correct answer-✅1)
Align the IT with the Business Objectives
2) Low-Cost Leadership
3) Product Differentiation
4) Focus on Market Niche
5) Strengthen Customer and Supplier Intimacy
Benchmarking - correct answer-✅Benchmarking involves comparing the efficiency and effectiveness of
your business processes against strict standards and then measuring performance against those
standards.
Best practices - correct answer-✅Industry best practices are usually identified by consulting companies,
research organizations, government agencies, and industry associations as the most successful solutions
or problem- solving methods for consistently and effectively achieving a business objective.
Value Web - correct answer-✅A value web is a collection of independent firms that use information
technology to coordinate their value chains to produce a product or service for a market collectively. It is
more customer driven and operates in a less linear fashion than the traditional value chain.
Synergies - correct answer-✅The idea of synergies is that when the output of some units can be used as
inputs to other units, or two organizations can pool markets and expertise, these relationships lower
costs and generate profits.
Core Competency - correct answer-✅A core competency is an activity for which a firm is a world- class
leader. Core competencies may involve being the world's best miniature parts designer, the best package
delivery service, or the best thin- film manufacturer. In general, a core competency relies on knowledge
that is gained over many years of experience and a first- class research organization, or simply key people
who follow the literature and stay abreast of new external knowledge.
Network Economics - correct answer-✅Business models based on a network may help firms
strategically by taking advantage of network economics. In traditional economics— the economics of
factories and agriculture— production experiences diminishing returns. The more any given resource is
applied to production, the lower the marginal gain in output, until a point is reached where the
additional inputs produce no additional outputs. This is the law of diminishing returns, and it is the
foundation for most of modern economics.
Virtual Company - correct answer-✅A virtual company, also known as a virtual organization, uses
networks to link people, assets, and ideas, enabling it to ally with other companies to create and
distribute products and services without being limited by traditional organizational boundaries or
physical locations. One company can use the capabilities of another company without being physically
tied to that company. The virtual company model is useful when a company finds it cheaper to acquire
