The use of Internet technologies allows companies to more easily sustain competitive advantagE.

True

False

Internet shopping produces cost transparency

Internet technologies are universal, and therefore usable by all companies

The Internet enables the production or sales of substitute products or services

E-commerce is affected by the law of diminishing returns

The Internet increases switching costs

True

False

Uber is an example of a business model that is based on the principle of network economics

Information technology can be strategically useful from a network economics perspective

The law of diminishing returns does not always apply to every situation

From a network economics perspective, the value of a community of people grows as the number of participants in the community increases

In network economics, the marginal cost of adding new members to the network is higher than the marginal gain

customer intimacy

operational excellence

survival

improved decision making

By the development of new information technologies

Solely by the decision making of middle and senior managers

By the rate of growth of the organization

By two main macroeconomic forces: capital and labor

By many factors, including structure, politics, culture, and environment

Transaction costs

Procurement

Switching costs

Agency costs

Network costs

Customers, suppliers, new market entrants, and substitute products

Low-cost leadership, substitute products and services, customers: and suppliers

Low-cost leadership, new market entrants, product differentiation, and focus on market niche

New market entrants, substitute products and services, customers, and suppliers

Low-cost leadership, product differentiation, focus on market niche, and customer and supplier intimacy

It sees the organization as a social structure similar to a machine

It focuses on how inputs are combined to create outputs when technology changes are introduced into a company

It sees the firm as being infinitely malleable

It emphasizes group relationships, values and structures

It sees capital and labor as being easily substituted for one another