Intro to Business Information Systems: Ch 2 Flashcards
business strategy
plan that outlines how a business will achieve its goals while taking into account the business SWOT - stakeholders drive business strategy
business strategy uses
developing new products or services, entering new markets, increasing customer loyalty, attracting new customers, increasing sales
stakeholders
partners, suppliers, shareholders, investors, community, employees, customers, government - often have conflicting interests
Business strategy: low cost leadership
lower costs than competition
business strategy: differentiation
unique or different from competition
business strategy: focus
focus on particular market segments or niche
Business strategy notes
successful business strategies are regularly evaluated and updated, strategies which match core competencies to opportunities create competitive advantage, strategic positioning and operational effectiveness are different - strategy is to be different
three M’s business strategy
innovation, sustainability, portfolio management (product portfolio), digital transformation, customer focus, global expansion
competitive advantage
product/service that organization’s customer place greater value on than competitors - companies compete successfully via distinct/superior resources/capabilities
First mover advantage
when organization can significantly impact market share by being the first to market with a competitive advantage - continuous innovation required, companies must control resources (processes too), which are valuable, rare, imperfectly imitable, non-substitutable
sources of competitive advantage
competencies (innovation, agility, quality, integrity, low cost) result in models which set them apart from competitors
Information systems for supporting strategy
low cost strategy implies use of information to minimize expenses, high quality strategy implies use of information to support ensuring excellent quality/minimal defects
Michael Porter
key researcher/thinker in the field of management/competitive analysis
buyer power
power of customers to drive down prices
threat of new entrants
power of competitors to enter market
supplier power
power of suppliers to drive up prices of materials
threat of substitution
power of customers to purchase alternatives
rivalry among existing competitors
power of competitors
high alternative/switching costs associated with outsourcing
companies outsource because cost of internalizing process/operation are higher, efficiency/effectiveness greater if outsourced
entry barriers
feature that customers come to expect and entering competitors must offer to survive
information systems as barriers
high initial investment cost, specialized knowledge/skills, network effects/switching costs, data/information advantages, regulatory compliance/security
Porters three generic strategies
cost leadership, differentiation, focus/specialization
cost leadership
offering same product for less than competitors
differentiation
product perceived as unique
