MIS 6713 FINAL EXAM QUESTIONS WELL ANSWERED LATEST UPDATE 2026
economic value - Answers worthwhile things that customers are willing to pay
supplier opportunity cost (SOC) - Answers minimum amount of money suppliers will accept to
provide the firm with the needed resources
firm cost (FC) - Answers the actual amount of money the firm disbursed to acquire the resources
needed to create its product or service
price - Answers what your customer pays you for products or service
willingness to pay (WTP) - Answers maximum amount of money the firm's customers are willing to
spend in order to obtain the firm;s product or service
total value created (TVC) - Answers the difference between customer willingness to pay and supplier
opportunity cost (TVC = WTP - SOC)
added value - Answers the portion of the total value created that would be lost if the firm did not
take part in the exchange
IT-dependent strategic initiatives - Answers identifiable competitive moves and projects that enable
the creation of added value and that rely heavily on the use of information technology to be
successfully implemented (i.e., they cannot feasibly be enacted without investments in IT)
strategic information system - Answers IS that add value to the firm
tactical information system - Answers systems that do not position the firm to create added value. In
other words, they do not enable distinctive initiatives that allow the firm to create unique economic
value
ways to create value - Answers increase WTP and/or decrease SOC
why do we do industry analysis - Answers understand the industry, understand the forces that drive
the different players in the industry, develop strategy
Porter's five forces - Answers threat of entry, threat of substitute, supplier power, buyer power, and
competitive rivalry
Threat of Entry - Answers This force represents the extent to which the
industry is open to entry by new competitors or whether significant barriers
to entry make it so that the existing firms need not worry about competition
from outside.
Ex: car manufacturing.
Threat of Substitutes - Answers This force represents the extent
to which the products or services marketed by the firm in the industry of
interest are subject to potential substitution by different products or services
that fulfill the same customer needs.
ex: In a clear
sign of the times, Sony announced in October 2010 that it would stop
manufacturing the iconic Walkman cassette player. Music cassette players
have now been fully substituted by digital music and streaming services.
Bargaining power of buyers - Answers This force represents the extent to which
customers of those organizations in the industry have the ability to put
downward pressure on prices.
ex: Walmart, which because of huge
sales in its more than 11,500 stores worldwide can purchase the bulk of a manufacturer's production
capacity. With its size and focus on low prices,
Walmart is famous for influencing prices set by its suppliers—some would
even say dictating prices to them!
Bargaining power of suppliers - Answers This force represents the extent to which
those individuals and firms who sell production inputs to the organizations in
the industry have the ability to maintain high prices.
ex: If you can put yourself in a position of bargaining power toward the industry of your interest (e.g.,
by choosing to concentrate in a field of study that is highly sought after but in short supply), you stand
to reap
, significant benefits in terms of salary.
Rivalry among existing competitors - Answers This force represents the extent to
which fierce battling for position and aggressive competition occur in the industry.
ex: The search engine industry, consumer electronics industry.
customer service life cycle - Answers a framework designed to draw managers attention to the
portential for value creation offered by the relationship between the firm and its customers
4 phases of CSLC - Answers Framework that suggests that managers step into their customers' shoes
and think about the needs and problems that customers
experience at each of four major phases in their relationship and interaction
with the firm
1)requirements
2)acquisition
3)ownership
4)retirement
stage 1 requirements - Answers 1) establish requirements
2) specification
Stage 2 acquisition - Answers 1) source selection
2) ordering
3) authorization and payment
4) acquisition
5) testing and acceptance
stage 3 ownership - Answers 1) integration
2) usage-monitoring
3) upgrading
4) maintain
stage 4 retirement - Answers 1) transfer or disposal
2) auditing and accounting
value chain analysis - Answers maps out business processes, both primary and support processes,
with the goal of identifying and introducing new activities/areas where value is created or lost in the
way the firms activities are currently performed.
sustainable competitive advantage - Answers the extent to which you can prevent your competitors
from catching up with you
response lag - Answers a measure of the delay in competitive response
response lag drivers - Answers The characteristics of the technology, the firm, its competitors, or the
value system in which the firm is embedded that combine to make replication of the IT-dependent
strategic initiative difficult and costly; combine their effect to levy barriers to erosion.
capabilities - Answers the process by which a firm becomes more effective over time of utilizing and
managing information systems and technology
asset-stock accumulation - Answers the process by which a firm accrues or builds up a resource over
time
4 barriers to erosion of IT dependent competitive advantage: - Answers IT resources, complementary
resources, IT project, preemption
IT-Resources Barrier 1 - Answers Assets: available IT resources (technical, information), what the firm
has
Capabilities: skills and abilities of firms workforce, what the firm can do
Complementary resources barrier 2 - Answers To implement an IT-dependent strategic initiative, the
firm must develop or acquire the necessary complementary resources.
*the analysis is important because during the design of the initiative, it is often possible to use IT to
leverage the impact of some idiosyncratic complementary resources
IT Project barrier 3 - Answers First mover "advantage"; if an IT dependent strategic initiative really is
innovative and does create competitive advantage, it is a barrier itself; the sustainability of this
advantage depends on the IT and the implementation process.
Preemption barrier 4 - Answers all about first mover advantage; switching costs
economic value - Answers worthwhile things that customers are willing to pay
supplier opportunity cost (SOC) - Answers minimum amount of money suppliers will accept to
provide the firm with the needed resources
firm cost (FC) - Answers the actual amount of money the firm disbursed to acquire the resources
needed to create its product or service
price - Answers what your customer pays you for products or service
willingness to pay (WTP) - Answers maximum amount of money the firm's customers are willing to
spend in order to obtain the firm;s product or service
total value created (TVC) - Answers the difference between customer willingness to pay and supplier
opportunity cost (TVC = WTP - SOC)
added value - Answers the portion of the total value created that would be lost if the firm did not
take part in the exchange
IT-dependent strategic initiatives - Answers identifiable competitive moves and projects that enable
the creation of added value and that rely heavily on the use of information technology to be
successfully implemented (i.e., they cannot feasibly be enacted without investments in IT)
strategic information system - Answers IS that add value to the firm
tactical information system - Answers systems that do not position the firm to create added value. In
other words, they do not enable distinctive initiatives that allow the firm to create unique economic
value
ways to create value - Answers increase WTP and/or decrease SOC
why do we do industry analysis - Answers understand the industry, understand the forces that drive
the different players in the industry, develop strategy
Porter's five forces - Answers threat of entry, threat of substitute, supplier power, buyer power, and
competitive rivalry
Threat of Entry - Answers This force represents the extent to which the
industry is open to entry by new competitors or whether significant barriers
to entry make it so that the existing firms need not worry about competition
from outside.
Ex: car manufacturing.
Threat of Substitutes - Answers This force represents the extent
to which the products or services marketed by the firm in the industry of
interest are subject to potential substitution by different products or services
that fulfill the same customer needs.
ex: In a clear
sign of the times, Sony announced in October 2010 that it would stop
manufacturing the iconic Walkman cassette player. Music cassette players
have now been fully substituted by digital music and streaming services.
Bargaining power of buyers - Answers This force represents the extent to which
customers of those organizations in the industry have the ability to put
downward pressure on prices.
ex: Walmart, which because of huge
sales in its more than 11,500 stores worldwide can purchase the bulk of a manufacturer's production
capacity. With its size and focus on low prices,
Walmart is famous for influencing prices set by its suppliers—some would
even say dictating prices to them!
Bargaining power of suppliers - Answers This force represents the extent to which
those individuals and firms who sell production inputs to the organizations in
the industry have the ability to maintain high prices.
ex: If you can put yourself in a position of bargaining power toward the industry of your interest (e.g.,
by choosing to concentrate in a field of study that is highly sought after but in short supply), you stand
to reap
, significant benefits in terms of salary.
Rivalry among existing competitors - Answers This force represents the extent to
which fierce battling for position and aggressive competition occur in the industry.
ex: The search engine industry, consumer electronics industry.
customer service life cycle - Answers a framework designed to draw managers attention to the
portential for value creation offered by the relationship between the firm and its customers
4 phases of CSLC - Answers Framework that suggests that managers step into their customers' shoes
and think about the needs and problems that customers
experience at each of four major phases in their relationship and interaction
with the firm
1)requirements
2)acquisition
3)ownership
4)retirement
stage 1 requirements - Answers 1) establish requirements
2) specification
Stage 2 acquisition - Answers 1) source selection
2) ordering
3) authorization and payment
4) acquisition
5) testing and acceptance
stage 3 ownership - Answers 1) integration
2) usage-monitoring
3) upgrading
4) maintain
stage 4 retirement - Answers 1) transfer or disposal
2) auditing and accounting
value chain analysis - Answers maps out business processes, both primary and support processes,
with the goal of identifying and introducing new activities/areas where value is created or lost in the
way the firms activities are currently performed.
sustainable competitive advantage - Answers the extent to which you can prevent your competitors
from catching up with you
response lag - Answers a measure of the delay in competitive response
response lag drivers - Answers The characteristics of the technology, the firm, its competitors, or the
value system in which the firm is embedded that combine to make replication of the IT-dependent
strategic initiative difficult and costly; combine their effect to levy barriers to erosion.
capabilities - Answers the process by which a firm becomes more effective over time of utilizing and
managing information systems and technology
asset-stock accumulation - Answers the process by which a firm accrues or builds up a resource over
time
4 barriers to erosion of IT dependent competitive advantage: - Answers IT resources, complementary
resources, IT project, preemption
IT-Resources Barrier 1 - Answers Assets: available IT resources (technical, information), what the firm
has
Capabilities: skills and abilities of firms workforce, what the firm can do
Complementary resources barrier 2 - Answers To implement an IT-dependent strategic initiative, the
firm must develop or acquire the necessary complementary resources.
*the analysis is important because during the design of the initiative, it is often possible to use IT to
leverage the impact of some idiosyncratic complementary resources
IT Project barrier 3 - Answers First mover "advantage"; if an IT dependent strategic initiative really is
innovative and does create competitive advantage, it is a barrier itself; the sustainability of this
advantage depends on the IT and the implementation process.
Preemption barrier 4 - Answers all about first mover advantage; switching costs
