Chapter 3 Flashcards
(19 cards)
What is strategy?
plan of action designed to achieve a long-term goal.
How does organizational strategy determine information systems requirements?
Strategy determines value chains which then determines business processes - they determine requirements and functions of information system.
Organizational Strategy Determines Information Systems order
Industry Structure → Competitive Strategy → Value Chain → Business Processes → Information Systems
What five forces dertermine industry structure?
Competitive Forces:
- competition from vendors who manufacture substitutes
- competition from existing rivals
- competition from new competitors
Bargaining Power Forces:
- Bargaining power of suppliers
- Bargaining power of customers
Five Forces
-Bargaining power of customers
- Bargaining power of suppliers
- threat of substitution
threat of new entrants
- Rivalry
- identify sources of strong competition
- use knowledge to create a competitive strategy
- combat those strong forces
RESULT: Customer loyalty (is inversely related to competitive forces)
What is competitive Strategy?
Cost vs Differentiation and Industry wide vs Focus
Value
amount of money that a customer is willing to pay for resources, product or service.
Primary activities of Value chain
Inbound Logistic, operations/manufactoring, outbound logistics, sales and marketing, customer service.
Inbound logistics
receiving, storing, and disseminating inputs to the product.
operations/manufactoring
transforming inputs int the final product
Outbound logistics
Collecting, storing, and physically distributing the product to buyers.
Sales and Marketing
Inducing buyers to purchase the product and providing a means for them to do so.
Customer service
Assisting customer’s use of the product and thus maintaining and enhancing the products value.
How do value chains determine business processes and information systems?
Business processes implement value chains or portions of value chains. Each value chain is supported by one or more business process. The information systems are then implemented in order to make the operation run smoothly and productively
Each stage of the value chain accumulates costs and adds value to the product/service
Net result: total margin of the change
Competitive advantages
Product Implementations:
- Create a new product or service
- Enhance products or services
- Differentiate products of services
Process Implementations:
- Lock in customers and buyers
- Lock in suppliers
- Raise barriers to market entry
- establish alliances
- reduce costs
The competitive advantages idk:
Lock in customers and buyers - making it difficult for customers to switch products
Lock in suppliers - easy to connect and to work with organization
Entry barriers - making it difficult and expensive for a new competition to enter the market
Reduce Costs - creating better business processes by reducing costs of materials.
How to Use information system to create competitive advantages?
- maintain customer account: IS collects info, IS saves customer time by automatically filling in part of form (adds value)
- Package & info delivery system: IS helps customer select delivery address and generate shipping labels
