Class 3, chapter 5 from class Flashcards
what are the types of business pressures
Market Pressures
Technology Pressures
Societal/Political/Legal Pressures
market and economic pressures
global economy and strong competition
need for real time operations
changing workforce
powerful customers
technological pressures
information overload
technological innovations and obsolescence
Societal/Political/Legal Pressures
terrorist attacks and homeland security
ethical issues
compliance with government regulations and deregulations
social responsibility
do large organizations usually do calm innovation or radical disruptive innovation? why
they do it calm because they have too much to lose
do startups usually do calm innovation or radical disruptive innovation? why
radical innovation because they have nothing to lose
information overload
so much info out there its impossible for us to get it all
makes it difficult to make a decision as manager
what are the 3 areas IT assists in going green?
- Facilities design and management
- Carbon management
- International and U.S. environmental laws
what is the digital divide?
not everyone has same access to IT innovation
for ex: here in mtl, internet is gyuuu, but in the north of qc and Africa c’est dead
organizational responses to business pressures
Strategic Systems
Customer Focus
Make-to-Order and Mass Customization
E-Business and E-Commerce
strategic systems
think about and test and put in place different type of strategies to improve profits, negotiate with suppliers, and gaining market share
customer focus
going to try to restructure how people in and out of the organization think about the business
want to make people always think positive about the company
it requires everyone to properly know their role
Make-to-Order and Mass Customization
taking advantage of new technologies
being able to more easily provide small customizations of our different products
using AI, all kinds of different racking technologies, computers
E-Business and E-Commerce
taking advantage of capabilities of doing business online
covid boomed this even more
Porter’s Competitive Forces Model
- The threat of new competitors
- The bargaining power of suppliers
- The bargaining power of customers (buyers)
- The threat of substitute products or services
- The rivalry among existing firms in the industry
Micheal E. Porter
big influence in business
when is the threat from rivalry high?
when there is intense competition among many firms in an industry
threat of entry of new competitors
The threat that new competitors will enter your market is high when entry is easy
low when there are significant barriers to entry
barrier to entry
A product or service feature that customers have learned to expect from organizations in a certain industry
A competing organization must offer this feature in order to survive in the marketplace
Threat of Substitute Products or Services
If there are many alternatives to an organization’s products or services, then the threat of substitutes is high
If there are few alternatives, then the threat is low
switching costs
The costs, in money and time, imposed by a decision to buy elsewhere
ex: contracts with smartphone providers
ways to limit power of competitors or new entrants?
switching costs
barriers to entry
Bargaining Power of Suppliers
Supplier power is high when buyers have few choices from whom to buy
low when buyers have many choices
ability to negotiate with suppliers is crucial
Bargaining Power of Customers (Buyers)
Buyer power is high when buyers have many choices from whom to buy
low when buyers have few choices
something like elasticity
What composes Porter’s Value Chain?
support activities
primary activities
margin section
support activities
are providing services to the whole of the organization
there to support the whole business
sometimes can create value, and have a cost
primary activities
activities that are creating value
how we build a product or service
have a cost and create value
what are the components of support activities
firm infrastructure
human resource management
technology development
procurement
firm infrastructure components
management
finance
legal
planning
human resource management components
professional development
employee relations
performance appraisals
recruiting
competitive wages
training programs
technology development components
integrated supply chain system
real time sales information
procurement components
real time inventory
communication with suppliers
purchases, supplies, and materials
primary activities components
inbound logistics
operations
outbound logistics
marketing and sales
service
inbound logistics components
real time inbound inventory data
location of distribution facilities
trucks
material handling
warehouse
inbound logistics components
real time inbound inventory data
location of distribution facilities
trucks
material handling
warehouse
outbound logistics components
oder processing. full delivery trucks
marketing and sales components
pricing
communication
products based on community needs
low prices
service components
delivery
installation
repair
greets
customer service focus
value chain
a sequence of activities
inputs are transformed into more valuable outputs
this chain of events create value
how does the value system work? or value chain?
The suppliers that provide the inputs
The firm creates products
These products pass through the value chains of distributors
how does the value system work? or value chain?
The suppliers that provide the inputs
The firm creates products
These products pass through the value chains of distributors
Then it makes it way to the end customers
do one’s distributor have their own value chain?
yeee
inbound logistics
how we are going to be getting the raw materials or raw input they we need to do what it is we have to be doing
operations
the factory
outbound logistics
shipping out whatever we created and built
marketing and sales
allows to sell whatever it is we have to sell
how do services add value in the value chain?
support the products you created
the firm’s infrastructure
buildings
different departments
human resource management
hires employees
take care of employee benefits
pay employees
product and technology development
research and development
procurement
purchasing department to get everything we need
how do you take advantage of the value chain?
you see what takes too many costs
you try to reduce the most unless costs and make it more efficient
Strategies for Competitive Advantage
- Cost leadership strategy
- Differentiation strategy
- Innovation strategy
- Organizational effectiveness strategy
- Customer orientation strategy
cost leader
I can sell at a lower cost than you can
Produce products and/or services at the lowest cost in the industry
ex: Walmart’s automatic inventory replenishment system
differentiation
I am better because I am different
Offering different products, services, or product features than your competitors
ex: Southwest Airlines has differentiated itself as a low-cost, short- haul, express airline
innovation
im doing something new and you can’t catch up
Introduce new products and services
add new features to existing products and services
develop new ways to produce them
ex: the first introduction of automated teller machines (ATMs) by Citibank
operational effectivness
I can do the same as you, but way more efficiently
Improve the manner in which a firm executes its internal business processes so that it performs these activities more effectively than its rivals
Such improvements increase quality, productivity, and employee and customer satisfaction while decreasing time to market
customer orientation strategy
I treat customers better than you do
Concentrate on making customers happy
how are web based systems good for the customer orientation strategy?
they can create a personalized, one-to-one relationship with each customer
how is business information technology alignment a strategic alignment
IT supports the business
IT enables to do business
cost optimization and ration benefits
how do organizations with a good Business-IT alignment view IT?
view IT as an engine of innovation that continually transforms the business
view it as something that often creating new revenue streams
how do organizations with a good Business-IT alignment view their internal & external customers & their customer service function?
as supremely important
sometimes, IT department is going to be considering that the organization is a customer
make sure to provide best possible service at the lower cost even inside the organization
how do organizations with a good Business-IT alignment rotate business & IT professionals?
they rotate them across departments and job functions
they have to understand business people understand IT and the IT people understand business
all in all, what are the components of organizations with good Business-IT alignments?
view IT as an engine of innovation that continually transforms the business
view internal & external customers & their customer service function as supremely important
know that business people have to understand IT and the IT people have to understand business
organization goals have to be completely clear to each IT and business employee
IT employees have to understand how the company makes (or loses) money
there has to be a vibrant and inclusive company culture
