GROUP 2 UNIT 3: COMPETING WITH IT

Question 1

information technology can change the way businesses compete.

Answer 1

Strategic IT

Question 2

We should also view information systems ______ , that is, as vital competitive networks, as a means of organizational renewal, and as a necessary investment in technologies; such technologies help a company adopt strategies and business processes that enable it to reengineer or reinvent itself to survive and succeed in today’s dynamic business environment.

Answer 2

strategically

Question 3

The strategic role of information systems involves using information technology to develop products, services, and capabilities that give a company major advantage over the competitive forces it faces in the global marketplace

Answer 3

Competitive Strategy Concepts

Question 4

Competition is a positive characteristic in business, and competitors share a natural, and often healthy, rivalry. This rivalry encourages and sometimes requires a constant effort to gain competitive advantage in the marketplace. This ever-present competitive force requires significant resources on the part of a firm.

Answer 4

Rivalry of Competitors

Question 5

Guarding against the threat of new entrants also requires the expenditure of significant organizational resources. Not only do firms need to compete with other firms in the marketplace, but they must also work to create significant barriers to the entry of new competition. This competitive force has always been difficult to manage, but it is even more so today. The Internet has created many ways to enter the marketplace quickly and with relatively low cost. In the Internet world, a firm’s biggest potential competitor may be one that is not yet in the marketplace but could emerge almost overnight.

Answer 5

Threat of New Entrants

Question 6

The threat of substitutes is another competitive force that confronts a business. The effect of this force is apparent almost daily in a wide variety of industries, often at its strongest during periods of rising costs or inflation. When airline prices get too high, people substitute car travel for their vacations. When the cost of steak gets too high, people eat more hamburger and fish. Most products or services have some sort of substitute available to the consumer.

Answer 6

Threat of Substitutes

Question 7

This role is accomplished through a strategic information architecture: the collection of ______ that supports or shapes the competitive position and strategies of a business enterprise.

Answer 7

strategic information systems

Question 8

So _______ strategic information system can be any kind of information system (e.g., TPS, MIS, and DSS) that uses information technology to help an organization gain a competitive advantage, reduce a competitive disadvantage, or meet other strategic enterprise objectives.

Answer 8

strategic information system

Question 9

Finding new ways of doing business. This strategy may involve developing unique products and services or entering unique markets or market niches (recess). It may also involve making radical changes to the business processes for producing or distributing products and services that are so different from the way a business has been conducted that they alter the fundamental structure of an industry

Answer 9

Innovation Strategy

Question 10

Becoming a low-cost producer of products and services in the industry or finding ways to help suppliers or customers reduce their costs or increase the costs of competitors.

Answer 10

Cost Leadership Strategy

Question 11

Finally, a business must guard against the often opposing forces of customer and supplier bargaining powers. If customers’ bargaining power gets too strong, they can drive prices to unmanageably low levels or just refuse to buy the product or service. If a key supplier’s bargaining power gets too strong, it can force the price of goods and services to unmanageably high levels or just starve a business by controlling the flow of parts or raw materials essential to the manufacture of a product

Answer 11

Bargaining Power of Customers and Suppliers

Question 12

Above figure also illustrates that businesses can counter the threats of competitive forces that they face by implementing one or more of the five basic ________.

Answer 12

competitive strategies

Question 13

Developing ways to differentiate a firm’s products and services from those of its competitors or reduce the differentiation advantages of competitors. This strategy may allow a firm to focus its products or services to give it an advantage in particular segments or niches of a market.

Answer 13

Differentiation Strategy

Question 14

Finding new ways of doing business. This strategy may involve developing unique products and services or entering unique markets or market niches (recess). It may also involve making radical changes to the business processes for producing or distributing products and services that are so different from the way a business has been conducted that they alter the fundamental structure of an industry

Answer 14

Innovation Strategy

Question 15

Competitive strategies are not mutually exclusive. An organization may make use of one, some, or all of the strategies in varying degrees to manage the forces of competition.
Therefore, a given activity could fall into one or more of the categories of competitive strategy.

Answer 15

Alliance Strategies

Question 15

Significantly expanding a company’s capacity to produce goods and services, expanding into global markets, diversifying into new products and services, or integrating into related products and services.

Answer 15

Growth Strategies

Question 16

If an organization offers its online package tracking system in a manner that allows its customers to access shipment information via not only a computer but a mobile phone as well, then such an action could fall into both the differentiation and innovation strategy categories

Answer 16

Alliance Strategies

Question 17

Strategic Uses of Information Technology - The key strategies that can be implemented with information technology includes:

Answer 17

a. locking in customers or suppliers,
b. building switching costs,
c. raising barriers to entry, and
d. leveraging investment in information technology
Lock in customers or suppliers

Question 18

These business relationships can become so valuable to customers or suppliers that they deter (discourage) them from abandoning a company for its competitors or intimidate (frighten) them into accepting less profitable business arrangements.

Answer 18

Lock in customers or suppliers

Question 19

More recent projects characterize a move toward more innovative uses of information technology.

Answer 19

Lock in customers or suppliers

Question 20

In other words, investments in information systems technology can make customers or suppliers dependent on the continued use of innovative, mutually beneficial inter-enterprise information systems

Answer 20

. Building switching costs

Question 21

By making investments in information technology to improve its operations or promote innovation, a firm could also raise barriers to entry that would discourage or delay other companies from entering a market

Answer 21

Raising barriers to entry

Question 22

Such actions tend to discourage firms already in the industry and deter external firms from entering the industry.

Answer 22

Raising barriers to entry

Question 23

In many cases, this happens when a company invests in advanced computer based information systems to improve the efficiency of its own business processes. Then, armed with this strategic technology platform, the firm can leverage investment in IT by developing new products and services that would not be possible without a strong IT capability.
Companies that consistently offer the best value from the customer’s perspective are those that keep track of their customers’ individual preferences; keep up with market trends; supply products, services, and information anytime and anywhere; and provide customer services tailored to individual needs.

Answer 23

Leveraging investment in information technology

Question 24

Thus, ______ have created a strategic opportunity for companies, large and small, to offer fast, responsive, high-quality products and services tailored to individual customer preferences

Answer 24

Internet technologies

Question 25

In combination, CRM systems and Internet, intranet, and extranet Web sites create new ______ for interactive communications within a company, as well as communication with customers, suppliers, business partners, and others in the external environment.

Answer 25

channels

Question 26

In the value chain conceptual framework, some _______ are primary processes; others are support processes.

Answer 26

business activities

Question 26

Typically, customers use the Internet to ask questions, lodge complaints, evaluate products, request support, and make and track their purchases.

Answer 26

Building a customer-focused business

Question 27

A _______helps its e-commerce customers help themselves while also helping them do their jobs. Finally, a successful business nurtures an online community of customers, employees, and business partners that builds great customer loyalty as it fosters (encourage the development of) cooperation to provide an outstanding customer experience.

Answer 27

customer-focused business

Question 28

In contrast______ are those business activities that help support the day to-day operation of the business and that indirectly contribute to the products or services of the organization

Answer 28

support processes

Question 29

So __________ should try to develop a variety of strategic uses of the Internet and other technologies for those basic processes that add the most value to a company’s products or services and thus to the overall business value of the company

Answer 29

managers and business professionals

Question 30

____enable a company and its global business partners to use the Web to design products and processes jointly.

Answer 30

Extranets

Question 31

Finally, ¬¬¬______ can dramatically improve procurement of resources by providing online marketplaces for a firm’s suppliers.

Answer 31

e-commerce Web portals

Question 32

These include automated just-in-time _______ to support inbound logistic processes that involve inventory storage, computer-aided flexible manufacturing systems, as well as online point-of-sale and order processing systems to improve the outbound logistics processes that handle customer orders.

Answer 32

warehousing systems

Question 33

Finally, a coordinated and integrated ______ can dramatically improve customer service

Answer 33

customer relationship management system

Question 34

It shows how various types of information technologies might be applied to specific business processes to help a firm gain _____ in the marketplace.

Answer 34

competitive advantages

Question 35

Establishing new business linkages and alliances with customers, suppliers, competitors, consultants, and other companies. These linkages may include mergers, acquisitions, joint ventures, formation of virtual companies, or other marketing, manufacturing, or distribution agreements between a business and its trading partners.

Answer 35

Alliance Strategies

Question 36

for example, implementing a system that allows customers to track their orders or shipments online could be considered a form of differentiation if the other competitors in the marketplace do not offer this service. If they do offer the service, however, online order tracking would not serve to differentiate one organization from another

Answer 36

Alliance Strategies

Question 37

Not everything innovative will serve to differentiate one organization from another. Likewise, not everything that serves to differentiate organizations is necessarily viewed as innovative. These types of observations are true for any combination of the competitive strategies, thus making them complementary to each other rather than mutually exclusive.

Answer 37

Alliance Strategies

Question 38

Early attempts to use information systems technology in these relationships focused on significantly improving the quality of service to customers and suppliers in a firm’s distribution, marketing, sales, and service activities.

Answer 38

Lock in customers or suppliers

Question 38

Investments in information technology can allow a business to lock in customers and suppliers (and lock out competitors) by building valuable new relationships with them.

Answer 38

Lock in customers or suppliers

Question 39

A major emphasis in strategic information systems has been to find ways to create switching costs in the relationships between a firm and its customers or suppliers

Answer 39

Building switching costs

Question 40

They then become reluctant (unwilling or hesitant) to pay the costs in time, money, effort, and inconvenience that it would take to switch to a company’s competitors.

Answer 40

Building switching costs

Question 41

Typically, these barriers increase the amount of investment or the complexity of the technology required to compete in an industry or a market segment.

Answer 41

Leveraging investment in information technology

Question 42

Investing in information technology enables a firm to build strategic IT capabilities so that they can take advantage of opportunities when they arise

Answer 42

Leveraging investment in information technology

Question 43

An important current example is the development of corporate intranets and extranets by many companies, which enables them to leverage their previous investments in Internet browsers, PCs, servers, and client/server networks

Answer 43

Leveraging investment in information technology

Question 44

The _________ means to keep customers loyal, anticipate their future needs, respond to customer concerns, and provide top-quality customer service.

Answer 44

Customer focused-business

Question 45

_______ can make customers the focal point of customer relationship management (CRM) and other e-business applications.

Answer 45

Internet technologies

Question 46

Such communications enable continual interaction with customers by most business functions and encourage _______ with customers in product development, marketing, delivery, service, and technical support.

Answer 46

cross-functional collaboration

Question 47

Using ____________, specialists in business functions throughout the enterprise can contribute to an effective response. This ability encourages the creation of cross-functional discussion groups and problem-solving teams dedicated to customer involvement, service, and supporT

Answer 47

the Internet and corporate intranets

Question 47

The value chain concept, developed by ______

Answer 47

Michael Porter

Question 48

_______ are those business activities that are directly related to the manufacture of products or the delivery of services to the customer

Answer 48

Primary processes

Question 49

This framework can highlight where _____ can best be applied in a business.

Answer 49

competitive strategies

Question 50

For example, the figure illustrates that ______ can increase the communications and collaboration required to improve administrative coordination and support services dramatically.

Answer 50

collaborative workflow intranets

Question 51

The ____ in Figure above also identifies examples of strategic applications of information systems technology to primary business processes.

Answer 51

value chain model

Question 52

An ______ intranet can help the human resources management function provide employees with easy, self-service access to their benefits information

Answer 52

employee benefits

Question 53

_______ can also support marketing and sales processes by developing an interactive targeted marketing capability on the Internet and the Web

Answer 53

Information systems

Question 54

Information systems

Answer 54

the value chain concept

Question 55

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Answer 55

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