Moduel 1: 1.4 using information systems to attain compettive advantage

Question 1

Competitive advantage

Answer 1

a significant and long-term benefit that a company enjoys over its competition

Question 2

what are porter’s 5 forces of competitive advantage

Answer 2

1. treat of new entrants
2. bargaining power of customers
3. threat of substitute products / services
4. bargaining power of suppliers
5. rivalry among existing competitors

Question 3

What is the treat of new entrants

Answer 3

new competitors entering the market

Question 4

Bargaining power of customers

Answer 4

to what extent can customers or suppliers dictate their own terms (depends on order volume, number of customers relied on, contractual lock-in, scarcity of resources etc.)

Question 5

Bargaining power of suppliers

Answer 5

to what extent can suppliers dictate their own terms
(how much are they reliant on your business, this relates to the suppliers overall sales volume and how many customers they have
- also how much you are dependant on the supplier (monopoly of a product tat you need in production, if they want to raise prices you will have to pay)

Question 6

Threat of substitute products or services

Answer 6

are there products or services being offered that are similar to yours?
(eg. a different product or service that meets the same needs)
(eg Netflix is a substitute for rent videos or going to the theater)

Question 7

rivalry among existing competitors

Answer 7

what are the general market conditions between existing competitors
(eg price wars versus competitive bidding, relative size of the competitors)
- if competitition is feaces, margins might be quite low meaning there may not be more room for competitors

Question 8

How do information systems use for competitive advantage

Answer 8

can help overcome forces that threaten the organizations ability to compete
while also enhancing forces that strengthen the competitive advantage
( you can look really big on the internet with a smaller investment than looking big on the outside of the company)

Question 9

Strategies for competitive advantage, what are they

it supports all strategies, but its’ how the technology is USED that counts, not the technology itself

Answer 9

1. reducing costs/ low cost leadership
   - by using ERP to streamline operations
2. developing new products or services or
3. improving / differentiating existing products or services
4. niche strategy - focus on a smaller and unique market segment
5. creating alliances - with partners, customers or suppliers