Chapter 5: E-business strategy

Multiple choice questions: set A

Try the following questions to test your understanding of this chapter. Once you have finished,
click on the 'Submit Answers for Grading' button to get your results.

A business strategy is taken to define the future direction and actions

of an organisation or part of an organisation. What would the
definition of the approach by which applications of internal and
external electronic communications can support and influence
corporate strategy be referred to as?
None of the below

E-mission statement

Corporate strategy

E-business strategy

An e-business strategy is subsumed under the organisation's business strategy.

What could be an implication for an organisation if an e-business

strategy is not clearly defined?
Greater opportunities from evaluation of opportunities

Effective integration of e-business at a technical level

Clear direction of e-business strategy

None of the above are applicable

The opposite of the first three answers could be implications.

Before developing any type of strategy, a management team needs to

agree the process they will follow for generating and then
implementing the strategy. A framework that gives a logical sequence
to follow to ensure inclusion of all key activities of an e-business
strategic development is generally known as:
Multi-channel e-business strategy

An E-channel strategy

E- business stratification process

A strategy process model

A strategy process model acts as a framework for approaching strategy development.

Regarding resource analysis, this is primarily concerned with

examining e-business capability and includes examining the degree to
which a company has the appropriate technological and applications
infrastructure in place. What more is required so that these resources
can work together to provide efficient business processes?
 Strategic situation scanning and monitoring

Organisational analysis at micro level

Application portfolio analysis

Human and financial resources

The technology may be available but this still requires human and financial resources to make it
work.

SWOT analysis can be used in many different areas of business and

can help organisations analyse their internal resources in terms of
strengths and weaknesses then match them against the external
environment in terms of opportunities and threats. However, it may be
of greatest value when it is used to:
Promote strengths and reduce weaknesses

Formulate future strategies in addition to analysing the current situation

Minimise threats and maximize opportunities

None of the above - it is too vague to be of any real use

Not just examine the current situation but look to develop future strategies.

External factors need to be assessed as an integral part of strategic

analysis and this could examine many areas including competitor (as
against competitive) threats. A competitor analysis can be conducted
which involves a review of e-business services offered by existing and
new competitors and the adoption of these by their customers.
Resource-advantage mapping is one suggestion but why would this be
useful?
To identify where competitors are weak and exploit this

So that internal resource strengths can be assessed against external threats

To assess customer value provided relative to competitors

Actually, all of the above have a part to play

To understand how the organisation is differentiated from competitors and use this to
advantage.

Defining a specific company vision for e-business helps to

contextualise e-business in relation to a company's strategic
initiatives and its marketplace. In 2008, Jelassi and Enders suggested
that an e-business mission statement should include three of the
following points but which one is FALSE?
Business scope

Unique competencies

Values
 Cost

Cost would not be a usual feature of a mission or vision statement.

Much of the organizational value created by e-business is due to more

effective use of information. An analytical tool developed by Marchand
and others can be used to illustrate different ways in which
information can create value for organisations. There are four methods
or axes used to analyse information but which does not fit in with
Marchand's model?
Manage risks

Create new reality

Adding value

Accept costs

None of the above

The model looks to reduce costs of transactions and processes rather than accept them.

Effective strategies link objectives and performance together, while

prioritising objectives can facilitate and communicate an e-business
vision. As such, e-business objectives should be SMART but within this
acronym, what does R stand for?
Responsible

Relevant

Representative

Reliable

None of the above

Specific Measureable Actionable RELEVANT Time-related.

As the definition of strategy is driven by the objectives and vision or

mission, these will need reviewed and significant key e-business
decisions taken. One decision will include examining market strategy,
specifically a target marketing strategy of customers. Which of the
following would represent the evaluation and selection of customer
segments?
None of the below

Customer loyalty improvement

Customers who are brand loyal

Customer value improvement

Market share growth

Apart from customers difficult to reach using other media, the other strategies refer more to
market and product development strategies.
 Once segments have been identified, organisations need to define how
best to position their online services relative to competitors according
to four main variables: product quality, service quality, and fulfillment
time. Which variable is missing?
After sales service

Brand perception

Price

Customer value

Price - it's seems obvious now doesn't it.

Another aspect of Internet strategy formulation closely related to

product development is the review of opportunities from new business
and revenue models. Constantly reviewing innovation in services to
improve the quality of experience offered is also important to e-
businesses. So while there is a view that 'only the paranoid will
survive', which of the following options should managers avoid?
Wait-and-see option

Do-nothing option

Fast-follower option

None of the above

With all strategy options, managers should balance risks and all of the options have a place.
Flexibility does not have to mean shifting from core business and it can be cheaper to let others
make mistakes.

Much can be learned from e-business failures as well as successes and

Miller's (2003) analysis of Internet company failures pointed the
major overall mistake was to:
Offering free services

Massively overestimate the speed at which the marketplace would adopt dot com
innovations
Over-ambition

Corporate greed

An assessment of MSE success factors was produced by Jeffcoate and

others in 2002 and they suggested critical success factors applicable
to larger organisations. Which of the following could be usefully
applied?
Content, convenience, control, community, and commitment

Interaction and integration

Brand, price sensitivity, partnerships, and process improvement

 All of the above are applicable

Actually, all of the factors are applicable. Contrast Boo.com's demise with Firebox.com's
development.

When considering the alignment and impact of e-business strategies,

an essential element is to consider how the information system
strategy supports change. It has been observed in a study of major
leading corporations that they distinguished between information and
technology and the contributions both made. Essentially, competitive
advantage came from how information is:
All of the below

Applied

Stored

Analysed

None of the above

Willcocks and Plant in 2002 considered 58 major organisations in the USA, Europe and Australasia
competitive advantage came not from technology itself but how the information was collected,
stored and applied.
Multiple choice questions: set B
Try the following questions to test your understanding of this chapter. Once you have finished,
click on the 'Submit Answers for Grading' button to get your results.

This activity contains 15 questions.

The approach by which applications of internal and external

electronic communications can support and influence strategy is a
definition of:
Corporate Strategy

E-business responsibility

E-channel strategy

E-business strategy

When considering strategy, the matching of internal resources

against external demands forms part of:
Strategic objectives

Strategic implementation

Strategic analysis

Strategic definition

None of the above

Which of the following is NOT regarded as an implication of a weak

e-business strategy?
Resource wastage

Greater opportunities

Inappropriate direction of e-business strategy

Limited integration

Before developing any type of strategy for e-business, a

management team needs to agree the process they will follow for
generating and implementing the strategy. Which of the following
represents a structure that provides a logical framework to follow?
All of the below

Parallel corporate strategy model

Sequential marketing strategy model

E-business strategy framework

Within a strategy process model, strategic option, evaluation, plus

selection forms part of:
Strategic analysis

Strategic definition

Strategic objectives

Strategic implementation

Stage models indicate how advanced a company is in its use of ICT.

For an existing organization, typical stages of e-commerce
development are in which sequence?
Image and product information, customer support and service, transactions,
information collection, internal support and service
Transactions, image and product information, information collection, customer
support and service, internal support and service
Image and product information, information collection, customer support and
service, internal support and service, transactions
Internal support and service, information collection, image and product
information, customer support and service, transactions

A SWOT analysis is a simple but effective technique to help

organisations analyse their internal resources in terms of strengths
and weaknesses to identify opportunities and:
Time line

Technological status

Threats

Total income
When assessing competitive threats, an example of the greatly
increased bargaining power of customers online is:
Soft-lock-in created by use of e-business applications

Competitors from overseas can enter market with lower entry costs

Commoditisation makes it less easy to differentiate products

Wider product choice and more price transparency

An example of the threat of new e-commerce entrants from

established or new companies online is:
Threat of new digital products

Commoditisation makes it less easy to differentiate products

Potential loss of partners

Soft-lock-in created by use of e-business applications

Interactions between competitors and marketplace intermediaries

which can mutually improve the attractiveness of a marketplace is
known as:
Co-commerce

Co-operation

Co-opetition

Consolidation

Effective strategies link objectives and performance together, while

prioritising objectives can facilitate and communicate an e-business
vision. As such, e-business objectives should be SMART but within
this acronym, what does R stand for?
Relevant

Representative
 Responsible

Reliable

None of the above

Strategic decisions will need to be made including examining market

growth strategies. Developing new digital products is an example of
what type of strategy?
Market development strategy

Diversification strategy

Product development strategy

Market penetration strategy

Using the Internet to target new customer and new geographic

segments is which type of growth strategy?
Diversification strategy

Market development strategy

Product development strategy

Market penetration strategy

Poor strategic decisions have been the downfall of many well-known

Internet companies. One view is that the biggest mistake failed
companies made was to:
Massively overestimate the speed at which the marketplace would adopt dot
coms
A lack of creativity

To offer free services

That new innovations would replace conventional shopping

Research results have indicated that there has been a poor
correlation between organisational investment in information
systems and organisational performance measured by return on
equity. This has been known as:
Internet outage

The information performance conundrum

The productivity plateau

The productivity paradox

None of the above