IT: Chapter 3: Achieving Competitive Advantage with Informaiton Systems Flashcards
One way to understand Competitive advantage is
Porter’s Competitive Forces Model
ABBREV: Five competitive forces that shape fate of firm
TNSCS
Five competitive forces that shape fate of firm
Traditional Competitors New Market Entrants Substitute products and services Customers Suppliers
Traditional competitors
continuously devise new products new efficiencies, switching costs
New market entrants
some have low barriers to entry
newer companies may have advantages
substitute products and services
can purchase somewhere else if your prices are too high
Customers
can customers easily switch?
Can customers force firm to compete based on price?
Suppliers
The more suppliers a firm has, the greater control it can exercise over suppliers
ABBREV: Information Strategies for Dealing with Competitive Forces
LPFS
Information Strategies for Dealing with Competitive Forces
Low-cost leadership
Product differentiation
Focus on market niche
Strengthen customer and supplier intimacy
Low-cost leadership
use information systems to achieve the lowest operational costs and the lowest prices
Example of low-cost leadership
walmart
Product differentiation
use information systems to enable new products and services or greatly change the customer convenience using existing products and services
Example of product differentiation
Nike iD
Focus on market niche
use information systems to enable specific market focus, and serve narrow target market better than competitors
Example of focus on market niche
Hilton Hotel’s ONQ system
Strengthen customer and supplier intimacy
strong linkages to customer and suppliers increase switching costs and loyalty
Example of Strengthen customer and supplier intimacy
Toyota, Amazon
ABBREV: the internet’s impact on competitive advantage
EELCTC
the internet’s impact on competitive advantage
- Enables new products and services
- Encourage substitute products
- lowers barrier to entry
- Changes balance of power to customer and suppliers
- Transforms some industries
- Creates new opportunities for creating new markets
Value chain model
highlights the specific activities in a business where competitive strategy can best be applied where information systems are likely to have strategic impact
ABBREV: Parts of the Business Value Chain Model
PSBB
Parts of the Business Value Chain Model
Primary activities
Support activities
Benchmarking
Best Practices
Primacy Activities
directly related to the production and distribution of the firm’s products and services
Support activities
make the delivery of the primary activities possible
Support activities consists of
Administration Management
Human Resources
Technology
Benchmarking
involves comparing the efficiency and the effectiveness of your business processes against strict standards and then measuring performance against those standards
Best practices
identified by consulting companies, research organizations, government agencies, industry associations as the most successful solutions or problem-solving methods for consistently and effectively achieving a business objective
A firm’s value chain is linked to
the value chains of its suppliers, distributors, and customers
Value web
collection of independent firms that use information technology to coordinate their value chains to produce a product collectively
Synergies develops when
outputs of some units can be used as inputs to other units
Synergies have
lower costs and generate profits
Synergies is enabled by
information systems that ties together disparate units so they act as a whole
Core competency
activities in which firm is world-class leader
Core competency relies on
knowledge that is gained over many years of experience as well as knowledge research
What enhances competency
any information system that encourages the sharing of knowledge across business units
Network-based strategies include
Network economics
Virtual company
Networks economics
marginal costs of adding another participant are near zero whereas marginal gain is much larger
Virtual company
uses networks to link people, resources, and ally with other companies to create and distribute products without traditional organizational boundaries or physical locations
Disruptive technologies
technologies with disruptive impact on industries and businesses rendering existing products, services and business models obsolete
firms movers of disruptive technologies may
fail to see potential allowing second movers to reap rewards (fast followers)
ABBREV: Globalization benefits
SHS
Globalization benefits
- scale economies and resource reduction
- higher utilization rates, fixed capital costs, and lower cost per unit of production
- speeding time to market
ABBREV: Global business and system Strategies
DMFT
Global business and system Strategies
Domestic exporters
Multinationals
Franchisers
Transnationals
Domestic exporters
heavy centralization of corporate activities in home country
Multinationals
concentrates financial management at central home base while decentralizing production, sales, and marketing to other countries
Franchisers
products created, designed, financed, and initially produced in home country but rely on foreign units for further production, marketing, and hum resources
Transnationals
regional (not national) headquarters and perhaps world headquarters optimizing resources as needed
ABBREV: Global System Configurations
CDDN
Global System Configurations
Centralized systems
Duplicated systems
Decentralized Systems
Network systems
Centralized systems
all developments and operation at domestic home base
Duplicated systems
developments at home base but operations managed b autonomous unit in foreign locations
Decentralized systems
each foreign unit designs own solutions and systems
Network systems
development and operations occur in integrated and coordinated fashion across all units
ABBREV: types of Quality
PCTS
types of Quality
Producer perspective
Customer perspective
Total Quality management (TQM)
Six Sigma
Producer perspective
conformance to specifications and absence of variation from specs
Customer perspective
physical quality, quality of service, psychological quality
Total Quality management (TQM
all people, functions responsible for quality
Six Sigma
measure of quality
ABBREV: how information systems improve quality
RBUII
how information systems improve quality
- Reduce cycle time and simplify production process
- Benchmarking
- Use customer demands to improve products and services
- Improve design quality and precision
- Improve production precision and tighten production tolerances
Improve design quality and precision using
Computer-aided Design (CAD) systems
Computer-aided Design (CAD) systems
automates the creation and revision of design using computers and sophisticated graphic software
Business Process Management (BPM)
an approach to business which aims to continuously improve business processes
BPM uses variety of tools to
- understand existing processes
- design and optimize new processes
ABBREV: Steps in BPM
IADIC
Steps in BPM
- Identify process for change
- Analyze existing processes
- Design new process
- Implement new process
- Continuous measurement
Business Process Reengineering (BPR)
a radical form of fast change
BPR is not
a continuous improvement, but elimination of old processes, replacement with new processes in a brief time period
BPR can produce
dramatic gains in productivity and more organizational resistance to change
