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review04 - Chapter 4 The Digital Firm Electronic Business...

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Chapter 4 The Digital Firm: Electronic Business and Electronic Commerce 4- 1 Chapter 4 “The Digital Firm: E-Business and E-Commerce” Sample Review Questions True-False Questions 1. Transaction costs are higher in Internet business. 2. One advantage of using Internet technology is that it provides the infrastructure to allow information to flow seamlessly from one part of the organization to another. 3. The Internet can replace existing distribution channels or extend them. 4. The Internet breaks the traditional link between the flow of the product and the flow of product-related information. 5. Information asymmetry refers to the situation where the relative bargaining power of two parties in a transaction is determined by one party in the transaction possessing more information essential to the transaction than the other party. 6. The time and money spent locating a suitable product and determining the best price for that product defines location costs. 7. Before the Internet, businesses had to make tradeoffs between the richness and the reach of information. 8. Some companies use internal portals to give employees streamlined access to specialized information resources. 9. A syndicator is a business that aggregates content or applications from multiple sources, packaging them for distribution, and reselling them to third-party Web sites. 10. Disintermediation provides major benefits to the distributor. 11. Because personal information is often gathered without the customer’s knowledge, it is illegal to use such information to personalize a Web page. 12. Suppliers have been reluctant to participate in Internet exchanges because competitive bidding drives prices down without the normal benefits of cutting prices. 13. Intranets are becoming the technology of choice for electronic business. 14. Intranets and extranets can be used to electronically coordinate cross-functional processes inside and outside the organization. 15. Channel conflict can create negative repercussions, especially when commission sales to area sales representatives are involved. Multiple- Choice Questions
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4-2 The Digital Firm: Electronic Business and Electronic Commerce Chapter 4
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