Core Competencies and Network-Based Strategies Quiz

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What does a virtual company model do?

Avoids using networks to ally with other companies

Manages production and shipment for major fashion companies (correct)

Grows in value with the size of its community

Limits itself to traditional organizational boundaries and physical locations

How is the value of software in network economics compared to traditional economics?

Traditional economics has a lower law of diminishing returns compared to network economics

Software value decreases with the size of the customer base

Software value grows as the installed customer base grows (correct)

The more participants, the lower the marginal gain in network economics

What is a characteristic of network economics regarding adding new participants?

Adding new participants has no impact on the community

Each participant reduces the value for existing participants

Marginal cost of adding new participants is high

Marginal cost of adding new participant is almost zero (correct)

Which company exemplifies a virtual company model in the text?

Li & Fung Signup and view all the answers

What does a world-class leader in core competencies rely on according to the text?

Knowledge, experience, and sharing across business units Signup and view all the answers

How does a network-based strategy take advantage of a firm's abilities?

By exploiting network economics and virtual company models Signup and view all the answers

What is the main focus of the Business Value Chain Model?

Adding value to products or services Signup and view all the answers

In the context of the Value Web, what does the term 'value chain' refer to?

Collection of activities adding value to products Signup and view all the answers

How does the Value Web differ from the traditional value chain model?

It involves independent firms using synchronized IT Signup and view all the answers

What is a key advantage of achieving synergies in business?

Improved operational efficiency and market expertise Signup and view all the answers

Which action exemplifies a synergy in the context of strategic mergers and acquisitions?

Purchase of a competitor to expand market reach Signup and view all the answers

How can information systems contribute to improving customer intimacy in the Value Chain Model?

By improving operational efficiency and customer service Signup and view all the answers

What are the four generic strategies for dealing with competitive forces, enabled by using IT?

Low-cost leadership, product differentiation, focus on market niche, strengthen customer and supplier intimacy Signup and view all the answers

In Porter's Competitive Forces Model, what do substitute products refer to?

Products that can replace the firm's offerings if prices become too high Signup and view all the answers

How does low-cost leadership strategy differ from product differentiation strategy?

Low-cost leadership aims to offer products at a lower price than competitors, while product differentiation emphasizes creating unique products and experiences. Signup and view all the answers

What role do suppliers play in the context of competitive forces?

Suppliers can exert market power if a firm cannot raise prices as fast as them Signup and view all the answers

Which of the following is NOT one of the information system strategies for dealing with competitive forces?

Market development Signup and view all the answers

How does strengthening customer and supplier intimacy contribute to dealing with competitive forces?

By enhancing relationships and loyalty, which can lead to competitive advantages Signup and view all the answers