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ABI > LU2 > Flashcards

LU2 Flashcards

1
Q

Value that’s created and captured by the company is the XXX XXX.

A

Value that’s created and captured by the company is the XPROFIT MARGINX.

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2
Q

Competitive strategy is:

A

A firm’s competitive strategy concerns how to

compete in the business areas in which the firm operates.

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3
Q

Competitive strategy means to XXX how the firm intends to create and maintain a XXX XXX with respect to competitors.

A

Competitive strategy means to XDEFINEX how the firm intends to create and maintain a XCOMPETITIVE ADVANTAGEX with respect to its competitors.

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4
Q

Value chain is:

A

A set of activities that an organisation carries out to create value for its customers. Porter proposes a general-purpose value chain that
companies can use to examine all of their activities.

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5
Q

Primary activities (Porter’s Value Chain):

A

They relate directly to the physical creation, sales, maintenance and
support of a product or a service.

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6
Q

Primary activities (Porters Value Chain) in terms of activities/processes:

A
  1. Inbound logistics: processes related to receiving storing and distributing inputs internally.
    Key factor: supplier relationships
  2. Operations: activities that change inputs into outputs that are sold to customers.
    Operational system: creates value
  3. Outbound logistics: delivery of product to the customer, such as collection,
    storage and distribution (internal & external to the company)
  4. Marketing and sales: persuade clients to purchase from you instead of competitors; benefits & how you communicate them= sources of value
  5. Service: activities related to maintaining value of your product/service to your
    customers, once purchased
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7
Q

Support activities (Porter’s Value Chain):

A

They support the aforementioned primary functions.

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8
Q

Support activities (Porter’s Value Chain) in terms of activities/processes:

A
  1. Procurement (purchasing): what the organisation does to get the resources needed; e.g., finding best prices
  2. HR management: recruits, hire, etc.
  3. Technological development: managing and processing information & protecting company’s knowledge base
  4. Infrastructure: support systems and functions that allow it to maintain daily operations; e.g., accounting, legal, administrative and general management
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9
Q

The Business Value Chain highlights:

A

Specific activities in the business where
competitive strategies can be best applied and where information systems are most likely to have a strategic impact.

Also used for benchmarking

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10
Q

Benchmarking involves:

A

Comparing the efficiency and effectiveness

of your business processes against strict standards and then measuring performance against those standards.

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11
Q

The Industry Value Chain encouragers you to:

A

To think about how
to use information systems to link up more efficiently with your
suppliers, strategic partners, and customers.

Example Amazon:
You want to build systems that:
• Make it easy for suppliers to display goods and open stores on the Amazon
site
• Make it easy for customers to pay for goods
• Develop systems that coordinate the shipment of goods to customers
• Develop shipment tracking systems for customers

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12
Q

Value Webs are:

A

Highly synchronised industry value chains

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13
Q

A XXX XXX is a collection of independent firms that use information technology
to coordinate their XXX XXX to produce a product or service for a market
collectively. => customer driven & less linear fashion than traditional value chain

A

A XVALUE WEBX is a collection of independent firms that use information technology
to coordinate their XVALUE CHAINX to produce a product or service for a market
collectively. => customer driven & less linear fashion than traditional value chain

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14
Q

Project Management Triangle:

A

It is used by managers to analyse or understand the difficulties that may arise due
to implementing and executing a project.

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15
Q

Three constraints of the Project Management Triangle:

A

Time, scope and costs.

(Quality is not part of the project management
triangle, but it is the ultimate objective of every
delivery)

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16
Q

Six stages of Project Management:

A
  1. Project Definition -
    This refers to defining
    the objectives and the factors to be considered
    to make the project successful.
  2. Project Initiation -
    This refers to the resources as well as the planning before
    the project starts.
  3. Project Planning - Outlines the plan as to how the project should be executed.
    This is where project management triangle is essential. It looks at the time, cost
    and scope of the project.
  4. Project Execution - Undertaking work to deliver the outcome of the project.
  5. Project Monitoring & Control -
    Taking necessary measures, so that the
    operation of the project runs smoothly.
  6. Project Closure-
    Acceptance of the deliverables and discontinuing resources
    that were required to run the project.
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17
Q

A competitive advantage refers to:

A

Factors that allow a company to produce goods
or services better or more cheaply than its rivals. These factors allow the productive entity to generate more sales or superior margins compared to its market rivals.

18
Q

Porter’s competitive forces model:

A

It provides a general fire of the firm, its
competitors, and the firm’s environment and the dependence of firms on environments.

The model helps understanding the competitive advantage.

19
Q

The XXX XXX XXX shape the fate of the firm.

A

The XFIVE COMPETITIVE FORCESX shape the fate of the firm.

20
Q

The 5 competitive forces:

A

Traditional competitors

New market entrants

Substitute products and services

Customers

Suppliers

21
Q

Traditional competitors (5 competitive forces):

A

All firms share market space with other competitors,
who are continuously devising new, more efficient ways to produce by introducing
new products and services => attract customers

22
Q

New market entrants (5 competitive forces):

A
  • In some markets it is cheaper or more expensive to enter
  • New companies bring young workforce, HUNGRIER (more highly motivated)
    than traditional occupants of an industry
  • New companies depend on outside financing for new plants and equipment
    which is expensive
  • Less experienced workforce
  • Little brand recognition
23
Q

Substitute products and services (5 competitive forces):

A
  • New technologies create new substitutes all the time (ethanol can substitute for gasoline in cars)
  • The more substitute products and services in your industry, the less you can control pricing and the lower your profit margin
24
Q

Customers (5 competitive forces):

A
  • A profitable company depends in large measure on its ability to attract and
    retain customers
  • Product differentiation (on internet you can see exactly)
25
Q

Suppliers (5 competitive forces):

A
  • The market power of suppliers can have a significant impact on the firm profits
  • The more different supplies a firm has=> the greater control it can exercise over
    suppliers in terms of price, quality and delivery schedules
26
Q

The 4 information system strategies for dealing with competitive forces:

A
  • Low-cost leadership
  • Product differentiation
  • Focus on market niche
  • Strengthening customer supplier intimacy
27
Q

Low-cost leadership (4 information system strategies):

A
  • Using information systems to achieve the lowest operational costs and the lowest prices
    (Walmart by keeping prices low and shelves well stocked)
  • The computer collects the orders from all Walmart stores and transmits them to
    suppliers. Suppliers can also access Walmart’s sales and inventory data using web
    technology
  • Walmart replenishment system = example of efficient customer response system
28
Q

Product differentiation (4 information system strategies):

A
  • Manufacturers and retailers are using information systems to create products and
    services that are customised and personalised to fit the precise specification of
    individual needs
  • Examples: google with google maps, iPod, etc.
  • The concept of mass customisation is also used here
29
Q

Focus on market niche (4 information system strategies):

A
  • Use information systems to enable a specific market focus and serve this narrow
    target market better than competitors
  • Information systems support this strategy by analysing data for finely (in a very skilled manner) tuned sales and marketing techniques
  • Data can come from anywhere (retailers, website searches, supermarkets)
  • Customer relationship management (CMR)
30
Q

Strengthening customer supplier intimacy (4 information system strategies):

A
  • Use information systems to tighten linkages with suppliers and develop intimacy
    with customers
  • Strong linkages to customers and suppliers increase switching costs (the cost
    of switching from one product to a competing product) and loyalty to your firm
31
Q

What is Internet of Things (IoT)

A

The use of sensors in industrial and consumer products.

32
Q

What are smart products?

A

Products that are part of a larger set of information-intensive service sold by firms.

33
Q

What are the challenges posed by strategic information systems, and
how should they be addressed?

A

Strategic information systems often change the organisation as well as its products,
service and operating procedures=> drives the operation into new behavioural
patterns.

34
Q

Sustaining Competitive Advantage (challenges):

A
  • Competitors can retaliate and copy strategic systems=> competitive advantage is
    not always sustainable
  • Internet can make competitive advantage disappear very quickly
  • Information systems alone cannot provide an enduring business advantage
35
Q

Aligning IT with Business Objectives:

A
  • The more a firm can align information technology with its business goals, the
    more profitable it will be
  • Only one-quarter of firms achieve alignment of IT with the business
36
Q

Management Checklist: Performing a Strategic System Analysis

A
  • To align IT with the business and use information systems effectively for
    competitive advantage, managers need to perform a strategic system analysis.
  • Managers should ask the following questions:
    1. What is the structure of the industry in which the firm is located?
    2. What are the business, firm and industry call chains for this particular firm?
    3. Have we aligned IT with our business strategy and goals?
37
Q

Adopting the kinds of XXX XXX described in this LU generally requires
changes in business goals, relationships with customers and suppliers, and business
processes.

A

Adopting the kinds of XSTRATEGIC DECISIONSX described in this chapter generally requires
changes in business goals, relationships with customers and suppliers, and business
processes.

38
Q

What are strategic transitions?

A

Socio-technical changes, affecting both social and technical elements of the organisation (a movement between levels of socio-technical systems).

39
Q

IT XXX both the relative cost of capital and the XXX of information

A

IT XCHANGESX both the relative cost of capital and the XCOSTX of information.

40
Q

Information systems technology can be viewed as a XXX XXX XXX that can
be substituted for traditional capital and labour

A

Information systems technology can be viewed as a XFACTOR OF PRODUCTIONX that can
be substituted for traditional capital and labour.

41
Q

Information technology should result in a XXX XXX XXX as information technology substitutes for their
labour

A

Information technology should result in a XDECLINE IN THE NO. OF MIDDLE MANAGERS AND CLERICAL WORKERSX as information technology substitutes for their labour.

42
Q

What is the transaction cost theory?

A

Firms and individuals seek to economise on transaction costs, as they do on production costs.

ABI (8 decks)

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