Chapter 3

Question 1

Productivity Paradox:

Answer 1

Productivity = Output/Input (does IS help increase output / reduce input)
Ex. Investment in IT but small changes in worker productivity

Question 2

Porter’s Value Chain?

Answer 2

IS helps to reduce cost/time for all processes in value chain:

Inbound logistics, Ops, Outbound logistics, Marketing & Sales, & Service

Primary activities: Direct benefit to customers
Support activities: Indirectly benefiting customers

Question 3

Porter’s 5 Competitive forces

Answer 3

1. Threat of new vendors
2. Bargaining powers of customers
3. Rivalry among existing firms
4. Bargaining power of suppliers
5. Threat of substitution

Question 4

What is Disruptive Tech? What are its characteristics?

Answer 4

• Creates a new market and disrupts an existing market
• Lower margins - Higher risks

Ex. increased productivity/efficiency

Question 5

Nurturing DT

Answer 5

Create heavyweight teams (has budget & personnel authority)

Question 6

Best Non-consumption market for DT?

Answer 6

• Those who want job but lack money, skills, (simple inexpensive solutions needed)
• > They will be happy because they compare new DT to having nothing
• Higher-end (sustaining) are available to richer/skilled customers so DT is perfect, no competition because using DT is modest.

Question 7

What should we target for a Competitive advantage in DT?

Answer 7

2 Areas:

— Products: Create New, upgrade, or differentiate product

— BUS Processes: Keep loyal customers and suppliers

Question 8

What is a non-consumption market?

Answer 8

Those who purchase an item to fulfill a job to be done but current options were too expensive and/or over engineered (needed skill to use)