Chapter 12 Information Technology and Value Chains

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Information Technology and Value Chains

1. Technological change is a major factor in gaining competitive advantage. Answer: True Reference: Introduction Difficulty: Easy Keywords: technological, change, competitive, advantage 2. Advances in technology spawn new products and services. Answer: True Reference: Introduction Difficulty: Easy Keywords: technology, products, services 3. Technology is the now!how, physical e"uipment, and procedures used to produce products and services. Answer: True Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, e"uipment, procedures %. The most widespread view of technology is process technology. Answer: &alse Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, process '. A support networ comprises physical, informational, and organi(ational relationships. Answer: True Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: support, networ , physical, informational, organi(ational ). *roduct technology translates the methods +y which an organi(ation does things. Answer: &alse Reference: The #eaning and $ole of Technology Difficulty: #oderate
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Chapter 12 Information Technology and Value Chains

Keywords: product, technology ,. *rocess technology is the method +y which an organi(ation does things. Answer: True Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: process, technology, methods -. #anagers use information technology to ac"uire, process, and transmit information. Answer: True Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: information, technology .. Technology is pro+a+ly the most important force driving the increase in glo+al competition. Answer: True Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, glo+al 1/. #any consider the most important component of information technology to +e hardware. Answer: &alse Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: information, technology, hardware 11. The relationship +etween technology and competitive advantage is well understood. Answer: &alse Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, competitive, advantage 12. An internet is an internal networ surrounded +y a firewall for security purposes. Answer: &alse Reference: Information Technology Difficulty: #oderate Keywords: intranet, internet, networ , firewall, internal 13. A data+ase is a collection of interrelated data or information stored on a data storage device such as a computer hard drive, floppy dis , or tape. Answer: True Reference: Information Technology Difficulty: #oderate Keywords: data+ase, data 1%. E!commerce is limited to the Internet. Answer: &alse Reference: E!0ommerce Difficulty: #oderate Keywords: E!commerce, internet
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Chapter 12 Information Technology and Value Chains

1'. 1usiness!to!+usiness E!commerce offers individual consumers a new +uying alternative. Answer: &alse Reference: E!0ommerce Difficulty: #oderate Keywords: +usiness, E!commerce 1). Encryption in E!commerce is the process of coding customer information and sending it over the Internet in 2scram+led3 form. Answer: True Reference: E!0ommerce Difficulty: #oderate Keywords: encryption, E!commerce 1,. 1usiness!to!+usiness E!commerce dwarfs +usiness!to!consumer E!commerce. Answer: True Reference: E!0ommerce Difficulty: moderate Keywords: +usiness, E!commerce, consumer 1-. A catalog hu+ is an approach to e!purchasing that is used to reduce the costs of placing orders to suppliers as well as to reduce the costs of the goods or services themselves. Answer: True Reference: E!0ommerce Difficulty: #oderate Keywords: catalog, hu+, e!purchasing 1.. An auction is an electronic mar etplace where +uying firms and selling firms come together to do +usiness. Answer: &alse Reference: E!0ommerce Difficulty: #oderate Keywords: e4change, auction, electronic, mar etplace 2/. An e4change is an e4tension of the auction in which firms place competitive +ids to +uy something. Answer: &alse Reference: E!0ommerce Difficulty: #oderate Keywords: e4change, auction 21. Enterprise resource planning 5E$*6 refers to large, integrated information systems that support many enterprise processes and data storage needs. Answer: True Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning, data, information

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Chapter 12 Information Technology and Value Chains

22. In many cases, a company7s processes must +e reengineered +efore the company can enjoy the +enefits of an integrated information system. Answer: True Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: processes, integrated, information, E$* 23. E$* systems allow a firm to concentrate on functional processes rather than on enterprise processes. Answer: &alse Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning 2%. #ost E$* systems use te4t!+ased interfaces. Answer: &alse Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning 2'. Interopera+ility refers to the a+ility of one piece of software to interact with other software. Answer: True Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: interopera+ility, software 2). E$* solves the pro+lem of information fragmentation. Answer: True Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning, information, fragmentation 2,. The installation of E$* is ine4pensive. Answer: &alse Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning 2-. Increasing the value of a product to a customer or reducing the costs of +ringing the product to the mar et creates competitive advantage. Answer: True Reference: Technology 8trategy Difficulty: #oderate Keywords: competitive, advantage 2.. A disruptive technology is one that has performance attri+utes that are not valued yet +y e4isting customers or for current products. Answer: True Reference: Technology 8trategy Difficulty: #oderate Keywords: disruptive, technology
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Chapter 12 Information Technology and Value Chains

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3/. 9hich of the following is :;T a view of +usiness technology< a. *roduct technology +. =igital technology c. *rocess technology d. Information technology Answer: + Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, view 31. 9hich +est descri+es the function of the support networ of a technology< a. A support networ comprises the physical, informational, and organi(ational relationships that ma e a technology complete and allow it to function as intended. +. The function is to offer a networ of support to help wor ers who have +een displaced +y the implementation of a new technology. c. A support networ is the infrastructure that disseminates information and products through the supply chain. d. It is to provide technical e4pertise should the system have a failure. Answer: a Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, support, networ 32. 9ithin a supply chain, which of the following technologies is :;T related to purchasing< a. Electronic data e4change 5E=I6 +. 8torage c. 9arranty registration d. #aterials handling Answer: c Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, purchasing 33. 9hich of the following is :;T a component of information technology< a. >ardware +. 8oftware c. Telecommunications d. =ata Answer: d Reference: Information Technology Difficulty: #oderate Keywords: information, technology

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Chapter 12 Information Technology and Value Chains

3%. 9hich of the following is :;T considered information technology hardware< a. #onitor +. #emory c. Internal dis drive d. ?A@A Answer: d Reference: Information Technology Difficulty: #oderate Keywords: technology, information, hardware 3'. Electronic commerce can +est +e descri+ed asA a. the +usiness name for the com+ination of email with the 9orld 9ide 9e+. +. the selling of 9e+ site construction tools such as >T#B. c. the application of information and communication technology anywhere along the entire supply chain of +usiness processes. d. a specific technology used on the 999. Answer: c Reference: E!0ommerce Difficulty: #oderate Keywords: electronic, commerce, E!commerce 3). Encryption is the process ofA a. manufacturing a product with near (ero tolerances. +. coding customer information and sending it over the Internet in 2scram+led3 form. c. designing a software product that uses previously written code that has +een catalogued in the software 2li+rary.3 d. programming a computeri(ed numerically controlled 50:06 milling machine. Answer: + Reference: E!0ommerce Difficulty: #oderate Keywords: encryption, coding 3,. 9hich of the following is :;T a way +usiness!to!+usiness E!commerce is conducted< a. 0atalog hu+ +. #ercada c. Auction d. E4change Answer: + Reference: E!0ommerce Difficulty: #oderate Keywords: +usiness, E!commerce 3-. 9hich of the following is a front!office module in an E$* system< a. #anufacturing +. 0ustomer service c. Accounting d. >uman resources Answer: + Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: front, office, E$*, module
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Chapter 12 Information Technology and Value Chains

3.. Enterprise resource planning 5E$*6A a. refers to a large, integrated information system that supports many enterprise processes and data storage needs. +. can readily +e implemented +ecause it is easily adapted to a +usiness7s current processes. c. tends to fragment information. d. tends to use te4t!+ased interfaces. Answer: a Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: enterprise, resource, planning, E$* %/. 9hich of the following is :;T a draw+ac of enterprise resource planning 5E$*6< a. The cost of implementation is relatively large. +. &ull implementation can ta e several years. c. Implementation may re"uire reengineering of processes. d. It features a single source of data so everyone has access to the same data and information. Answer: d Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning, integration %1. 9hich of the following sentences +est descri+es how a manager should evaluate a potential technology investment< a. 9e need to see how much faster we can manufacture our product without sacrificing our a+ility to still command a high price in the mar et. +. 1eyond a +asic costC+enefit of the actual implementation, our organi(ation needs to consider the impact on our customer service, resource fle4i+ility, inventories, and product delivery timeta+le. c. The design team must ma e sure the service technology is applied as top management has dictated. d. 9e must ma e sure that we have the latest technology +efore any of our competitors has it. Answer: + Reference: Technology 8trategy Difficulty: #oderate Keywords: technology, investment %2. 9hich of the following statements a+out first!movers is &AB8E< a. The financial investment in new technology can +e outweighed +y the advantages of +eing first to mar et. +. A first!mover may +e a+le to gain an early large mar et share that creates a +arrier to entry for other firms. c. A company that pursues a first!mover strategy faces ris s that can jeopardi(e its financial and mar et position. d. A new product or process technology will last for some time, so an investment in new technology will put a company at an advantage for some time to come. Answer: d Reference: Technology 8trategy Difficulty: #oderate Keywords: first, mover, first!mover, technology

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Chapter 12 Information Technology and Value Chains

%3. 9hich of the following characteristics is typical of a disruptive technology< a. Its performance attri+utes are highly valued +y current customers. +. The short term is li ely to +e sacrificed for long!term returns. c. It is not a sustaina+le piece of +usiness that should +e developed further. d. It currently performs +etter than e4isting technologies. Answer: + Reference: Technology 8trategy Difficulty: #oderate Keywords: disruptive, technology %%. 9hich of the following is an appropriate response to a disruptive technology< a. The technology must +e developed in the same section of the organi(ation that handles the current technology. +. A constant method of management should +e employed so the new technology is treated e4actly the same as the e4isting technology. c. It needs to +e recogni(ed as a disruptive rather than a sustaining technology. d. The li ely slope of performance improvement must +e compared with the performance! improvement slope of the current technology. Answer: c Reference: Technology 8trategy Difficulty: #oderate Keywords: disruptive, technology, response

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%'. DDDDDDDDDDDD is the now!how, physical e"uipment, and procedures used to produce products and services. Answer: Technology Reference: The #eaning and $ole of Technology Difficulty: #oderate Keyword: technology %). A5n6 DDDDDDDDDDDD comprises the physical, informational, and organi(ational relationships that ma e a technology complete and allow it to function as intended. Answer: support networ Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: support, networ %,. DDDDDDDDDDDD technology translates ideas into new product and services. Answer: *roduct Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: product, technology

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Chapter 12 Information Technology and Value Chains

%-. The methods +y which an organi(ation does things rely on the application of DDDDDDDDDDDD. Answer: process technology Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: process, technology %.. #anagers use DDDDDDDDDDDD to ac"uire, process, and transmit information with which to ma e more effective decisions. Answer: information technology Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: information, technology '/. DDDDDDDDDDDD is pro+a+ly the most important force driving the increase in glo+al competition. Answer: Technology Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: technology, glo+al '1. A computer and the devices connected to it are called DDDDDDDDDDDD. Answer: hardware Reference: Information Technology Difficulty: #oderate Keywords: hardware, computer, devices '2. DDDDDDDDDDDD is the application of information and communication technology anywhere along the entire supply chain of +usiness processes. Answer: E!commerce Reference: E!0ommerce Difficulty: #oderate Keywords: E!commerce, +usiness, information, communication, technology '3. DDDDDDDDDDDD is a technology that ena+les the transmission of routine +usiness documents having a standard format from computer to computer over telephone or direct leased lines. Answer: Electronic data interchange 5E=I) Reference: E!0ommerce Difficulty: #oderate Keywords: E=I, electronic, data, interchange '%. An e4tension of the e4change in which firms place competitive +ids to +uy something is a5n6 DDDDDDDDDDDD. Answer: auction Reference: E!0ommerce Difficulty: #oderate Keywords: auction, electronic, mar etplace

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Chapter 12 Information Technology and Value Chains

''. An electronic mar etplace where +uying firms and selling firms come together to do +usiness is a5n6 DDDDDDDDDDDD. Answer: e4change Reference: E!0ommerce Difficulty: #oderate Keywords: e4change, electronic, mar etplace '). A5n6 DDDDDDDDDDDD is an approach to E!commerce that is used to reduce the costs of placing orders to suppliers as well as to reduce the costs of the goods or services themselves. Answer: catalog hu+ Reference: E!0ommerce Difficulty: #oderate Keywords: catalog, hu+, electronic, mar etplace ',. DDDDDDDDDDDD refers to a large, integrated information system that supports many enterprise processes and data storage needs. Answer: Enterprise resource planning, E$* Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning '-. DDDDDDDDDDDD is the a+ility of one piece of software to interact with others. Answer: Interopera+ility Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: interopera+ility, software, interact '.. DDDDDDDDDDDD is created +y increasing the value of a product to a customer or reducing the costs of +ringing the product to mar et. Answer: 0ompetitive advantage Reference: Technology 8trategy Difficulty: #oderate Keywords: competitive, advantage )/. The earliest adopters of a new technology are nown as DDDDDDDDDDDD. Answer: first movers Reference: Technology 8trategy Difficulty: #oderate Keywords: first, movers, adopters )1. A5n6 DDDDDDDDDDDD might have performance attri+utes that are not valued yet +y e4isting customers, or it might perform worse than e4isting technologies +ut will "uic ly surpass them once it is refined. Answer: disruptive technology Reference: Technology 8trategy Difficulty: #oderate Keywords: disruptive, technology

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Chapter 12 Information Technology and Value Chains

)2. 9hat are the three primary areas of technology and how do they relate< Answer: The three primary areas of technology are product, process, and information. *roduct technology consists of ideas that are developed within the organi(ation and translated into new products and services. *rocess technology consists of the methods +y which an organi(ation does things. Information technology is used to ac"uire, process, and transmit information with which to ma e more effective decisions. To oversimplify, product technology is what the firm is selling, process technology is how the firm ma es what it sells, and information technology is a tool used +y +oth those processes. Reference: The #eaning and $ole of Technology Difficulty: #oderate Keywords: product, process, information, technology )3. Identify and descri+e the four su+!technologies of information technology. Answer: The four su+!technologies of information technology are hardware, software, data+ases, and telecommunications. >ardware consists of a computer and the devices that are attached to it. 8oftware consists of the computer programs that ma e the hardware wor and carry out different application tas s. =ata+ases are collections of interrelated data or information stored on a data storage device. Telecommunications ma es electronic networ s possi+le. Reference: Information Technology Difficulty: #oderate Keywords: information, technology, hardware, software, telecommunications, data+ase )%. 9hat is an enterprise resource planning 5E$*6 system and what advantages can +e reali(ed +y its implementation< Answer: An enterprise resource planning 5E$*6 system is a large, integrated information system that supports many enterprise processes and data storage needs. Enterprise resource planning integrates all 5or as many as are installed6 functional areas and allows a true systems 5or enterprise6 view of a firm7s +usiness activities. Enterprise $esource *lanning depends on a single source of data that is availa+le to all users in a firm. Information flows are automated and are availa+le in real time for decision ma ing +y all levels of a firm. Reference: Enterprise $esource *lanning Difficulty: #oderate Keywords: E$*, enterprise, resource, planning )'. 9hat is a disruptive technology< Answer: =isruptive technology is such that all of its attri+utes are not yet valued +y e4isting customers or for current products, or perform much worse on some performance attri+utes that e4isting or future customers value +ut will "uic ly surpass e4isting technology on such attri+utes when it is refined. Reference: Technology 8trategy Difficulty: #oderate Keywords: disruptive, technology )). In your words, how does technology strategically fit with a firm7s core competencies< Answer: 0ertain technologies can help a firm adapt "uic ly to changing opportunities. The firm7s core competencies are thus enhanced, giving rise to a new generation of products and processes. Reference: Technology 8trategy Difficulty: #oderate Keywords: technology, core, competency
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Chapter 12 Information Technology and Value Chains

),. >ow can a technological change achieve competitive priorities of cost, "uality, time, and fle4i+ility< Eive an e4ample of each. AnswerA Technological change can improve a firm7s products, processes, and services. E4amples will vary. Reference: 0reating and Applying Technology Difficulty: >ard Keywords: technology, change, cost, "uality, time, fle4i+ility )-. =efine the term 2first mover3 and discuss the +enefits and draw+ac s of this position for a company. Answer: A first mover is the first to mar et with a new technology. If the technology catches on "uic ly, a first mover may set standards that others will +e forced to adopt. The first mover may +e fortunate enough to capture such a large mar et share that it may erect +arriers to entry for other firms. ;n the other hand, a first!mover strategy poses an investment ris +ecause the technology is not guaranteed to ta e off. &irst!mover positions can +e more e4pensive and, as more people e4plore the new technology, a +etter standard can +e developed that puts all of the first mover7s initial investment at ris . Reference: Technology 8trategy Difficulty: #oderate Keywords: first, mover ).. 9hat is 2economic justification3 and how does it apply to decisions a+out technological choice< Answer: #anagers should ma e every effort to translate considerations of sources of competitive advantage, fit with competitive priorities, e4istence of core competencies, and first!mover strategy into a financial analysis to estimate whether investment in a new technology is economically justified. Reference: Technology 8trategy Difficulty: #oderate Keywords: economic, justification

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