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Exam 2: Strategic Uses of Information Systems

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Question 1

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Give an example of companies establishing high switching costs to gain competitive advantage.

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Manufacturers of laser and ink-jet printers sell their printers at cost or below cost.However,once you purchase a printer,you must replace a depleted ink or toner cartridge with one that the printer manufacturer sells,or take a risk with other cartridges whose quality is often low.As a cartridge customer,you face high costs if you consider switching to another brand.Even if comparable cartridges from another manufacturer are less expensive,you cannot use them;and if you decide to use those cartridges,you will lose your investment in the printer,because you must buy a new one.Thus,establishing high switching costs often locks in customers.Locking in customers by any means is a way to accomplish a strategic advantage.

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Practically any mobile-based system that gives a company competitive advantage is a strategic information system.

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The essence of strategy is innovation,so___________ is often gained when an organization tries a strategy that no one has tried before.

Companies raise barriers to entrants by obtaining legal protection of intellectual property.

The goal of ___________is not to gain small incremental cost savings,but to achieve great efficiency leaps-of 100 percent and even 1000 percent.

___________are expenses incurred when a customer stops buying a product or service from one business and starts buying it from another.

Which of the following statements is true of explicit switching costs?

Strategic information systems are defined by their technical features per se,and not by how they are used.

The goal of reengineering is to gain small incremental cost savings.

The larger the number of companies competing within an industry,the better off each company is.

Ford created a joint venture with General Motors Corp.and DaimlerChrysler to establish ___________,a website that serves as an electronic market for parts suppliers who can bid online on requests for proposals posted by the automakers.

In a highly competitive industry that traditionally has had a narrow profit margin,JetBlue managed to gain strategic advantage by___________ .

___________involves adoption of new machinery and elimination of management layers.

___________is software that the developer gives to potential adopters for trial use.

One way to lock in buyers in a free market is to create a situation in which customers fear high switching costs.

___________refers to the competitive advantage that a company can achieve by persuading customers that its product or service is better than its competitors'.

Which of the following is a result of forming strategic alliances?

Instead of differentiating a product or service,an organization can add to the product or service to increase its value to the consumer.

Information systems that help seize opportunities are called ___________.

Switching costs can be explicit or implicit.