Multiple Choice Answers

Question 1
All of the following about the strategic planning process are true EXCEPT:
A. the strategic planning process is cyclical and continuous.
B. the process of developing a strategy may be even more important than the strategy.
C. the strategic planning process forces corporate executives, a company’s general manager, or a small business owner to assess the current position of the firm, where it should be, and how to achieve objectives.
D. the strategic planning process begins with strategy formulation.

Question 2
A specific outcome of the strategy initiation phase is a clear statement of the company’s __________, which summarizes the customer segment, competitor target, and the core differentiation of one’s product from the offerings of competitors.
A. company analysis
B. value proposition
C. core competency
D. functional strategy

Question 3
All of the following are situations when a business plan should be done EXCEPT:
A. when an existing business is deploying a CRM system.
B. when a new business is seeking start-up funds and other resources.
C. when an existing company is planning to create a separate division.
D. when an existing company is planning to launch the company in a new direction.

Question 4
Which of the following about business plans and business cases is NOT correct?
A. The content of a business case is similar to that of a business plan.
B. One difference is that the business plan concentrates on the viability of a company, whereas a business case assesses both viability of the project and the fit of the initiative with the firm’s mission and goals.
C. The audiences are the same—senior management and the board of directors.
D. The purposes are the same—to justify a specific investment of funds.

Question 5
The risks of being a first mover include all of the following EXCEPT:
A. the high cost of pioneering EC initiatives.
B. the chance that a second wave of competitors will eliminate a first mover’s lead through lower cost and innovation.
C. the risk that the move will be too late.
D. over the long run first movers are substantially less profitable than followers.

Question 6
The most efficient way to expand an organization’s scope is:
A. to introduce new products or services into new or existing markets without increasing production facilities or staff.
B. by increasing the size or scale of the business.
C. by expanding the firm’s appeal to a new set of customers.
D. to buy a company with complementary products or services.

Question 7
Incorrect approaches to EC strategy selection include all of the following EXCEPT:
A. “trend-surfing,” or following the crowd to the newest and most fashionable idea.
B. indiscriminately funding many projects and hoping for a few winners.
C. betting it all in a single, high-stakes initiative.
D. using a late-mover strategy.

Question 8
CIOs need to effectively communicate the value of proposed EC projects in order to gain approval for all of the following reasons EXCEPT:
A. companies now realize that EC is not necessarily the solution to all problems.
B. some large companies, and many public organizations, mandate a formal evaluation of requests for funding.
C. the success of EC projects may be assessed in order to pay bonuses to those involved with the project.
D. demand for expanding or initiating e-business projects is no longer strong so there are fewer requests for funding.
Question 9
EC costs and benefits can be classified into two broad categories:
A. direct and routine.
B. short-term and capital.
C. tangible and intangible.
D. operational and strategic.

Question 10
The New York Metropolitan Transit Authority (MTA) did not need to open another airport for almost two decades, even though air traffic had tripled because of productivity gains derived from improved IT systems. IT systems added by the MTA played critical roles in ticket reservations, passenger and luggage check-in, crew assignment and scheduling, runway maintenance and management, and gate assignments. This case illustrates that:
A. intangible benefits can be complex, yet substantial.
B. tangible benefits can be complex, yet substantial.
C. tangible costs can be high, yet payoffs can be achieved quickly.
D. intangible costs can be high, yet payoffs can be achieved quickly.

Question 11
Justifying information security projects:
A. is not needed because it is well-known that preventing network security problems is less labor-intensive than cleaning up virus infections.
B. is not done because ROI calculators are not available.
C. should focus on defending against external threats such as hackers and malware.
D. should be done because employee security training is usually poorly executed.

Question 12
The average-cost curves (AVC) of physical products and digital products:
A. are different because the AVC of digital products declines as quantity increases, forming an L-shape, while the AVC of physical products is U-shaped.
B. are both U-shaped.
C. are both L-shaped.
D. are different because the AVC of physical products declines as quantity increases, forming an L-shape, while the AVC of digital products is U-shaped.

Question 13
When computing agency cost, companies should consider:
A. both production-related costs and transaction costs.
B. only production-related costs and ignore transaction costs.
C. only transaction costs and ignore production-related costs.
D. ignore production-related costs and transaction costs.

Question 14
When creating a new business, the first step is to:
A. write a business case or plan.
B. acquire financing needed to make the business successful.
C. investigate all existing opportunities.
D. identify a consumer or business need that isn’t presently being met.

Question 15
The principle reason for writing a business plan is to:
A. help the founders remember what they are trying to accomplish.
B. provide an operational framework for the business.
C. acquire external funding.
D. provide strategic direction to employees.

Question 16
Chaplin’s Pet Store has been in business for many years. Chaplin, the present owner, decides to open an online sales channel where he can advertise and sell the same gourmet pet food. This is an example of adding:
A. a storefront.
B. e-procurement.
C. a portal.
D. a reverse auction.

Question 17
Reprise Electronics, a conglomerate that manufactures and sells all kinds of electronic goods under several brand names, currently has separate Web sites for each of its brands. The company decides to bring all of the Web sites together through a single site that, in addition to providing links to the brand pages, will also provide general information about how to select electronic merchandise and informational pages about the Reprise company today and its management team. This is an example of adding:
A. a storefront.
B. e-procurement.
C. a portal.
D. a reverse auction.

Question 18
One of the first decisions to be made in building a Web site is:
A. the domain name.
B. whether to provide personalized content.
C. how to protect the Web site from hackers.
D. who will host it.

Question 19
A __________ is an exact duplicate of the original Web site physically located on a Web server on another continent.
A. backup site
B. mirror site
C. download site
D. hot site

Question 20
The Web-hosting option under which the business acquires the hardware, software, staff, and dedicated telecommunications services needed to host a Web site is called:
A. self-hosting.
B. mirror hosting.
C. using a storebuilder.
D. ISP hosting.