Week 09

Question 1

Explain strategic analysis and the external and internal considerations

Answer 1

Collect and review information about internal processes and resources and external marketplace factors in order to inform strategy definition
External - competitive forces: Porter five forces and competitive strategies
Internal processes- value chain analysis and CSF analysis

Question 2

What are Porter and Millars Five Forces?

Answer 2

Bargaining power of customers
Threat of substitutes
Threat of new entrants
Rivalry between existing competitors
Power of suppliers

Question 3

What are porters five forces of competition?

Answer 3

• Rivalry of Competitors
• Threat of new entrants
• Threat of substitutes
• Customer bargaining power - limited number of suppliers limits customer choices
• Suppliers bargaining power - your competitor pays supplier in days not weeks for example

Question 4

Give a number of competitive strategies

Answer 4

Cost Leadership
Focus or Niche
Alliance
Growth (small enough profit margin)
Innovation
Differentiation

Question 5

What actions does IT play a crucial role in?

Answer 5

– scheduling
– controlling
– optimising
– measuring
– co-ordinating

Question 6

What are the different environmental threats a business faces?

Answer 6

Supplier threats, Competitive threats (new business models, new entrants, new digital products), customer threats (buying stops)

Question 7

Explain competitive strategies in particular innovation and differentiation

Answer 7

One strategy alone won’t usually fix the problem. Generally need a combination. Innovation and differentiation are competitive strategies but innovation does not necessarily mean it’s something different. Equally differentiation does not necessarily innovative (Could just be making a product with more efficient shipping)

Question 8

Define low-cost leadership in terms of IT and give an example

Answer 8

Use cost saving operational IT to get the lowest operational costs and prices - trying to eliminate need for physical spaces that are expensive.
ex: Walmart has inventory system that sends order to suppliers when purchase recorded at cash register - minimises costs and inventory at warehouses

Question 9

Explain the importance of cost leadership strategy and Business analytics in the airline industry

Answer 9

A business can use decision making IS to optimise systems for
lowest cost e.g. Business Analytics
ex: Ryanair - maximise airline fleet usage by ensuring planes are always full of customers and the turnaround time is minimum

Question 10

Explain how Product Differentiation strategy can be actioned on using IT with an example

Answer 10

Use IS to enable new products and services, or
greatly change the customer convenience in
using your existing products and services.
E.g., Google’s continuous innovations
Use information systems to customise,
personalise products to fit specifications of
individual consumers.
Use IT to offer distinct products

Question 11

Give an example of how dell use IT to offer product differentiation to customers

Answer 11

Dell allow customers
select the options they
want
Dell’s assemble-to-
order system is a major source of competitive advantage

Question 12

Explain how focus on market niche strategy can be actioned on with IT with an example

Answer 12

Use IS to enable specific market focus, and serve
narrow market better than competitors.
– Analyses customer buying habits, preferences
(Business analytics)
ex: Tesco clubcard analyses data on customers preferences

Question 13

How to align IT with the business Objectives

Answer 13

– Identify business goals and strategies.
– Break strategic goals into concrete activities and processes.
– Determine metrics for measuring progress.
– Identify how IT can help achieve business goals.
– Measure actual performance

Question 14

How does the internet effect business’s competitive advantage

Answer 14

Internet widens the market increasing competitors and price pressure
Reduces barriers to entry for new entrants
Facilitates creation of new substitute products and services
Bargaining power shifts to customer
We know more about marketplace than we ever have

Question 15

Name some other IT strategies to remain comeptitive

Answer 15

Use inter-enterprise systems to increase
switching costs to lock in customers or suppliers ex: Apple customers keep buying mac
* Make investments in ICT that build barriers to
entry against competitors.
* Use ICT in products and services to make the
substitution more difficult
* Investment in IS people, hardware, software, databases and networks from operational uses in strategic applications.
* Introduce enhanced business models using ICT.

Question 16

Explain the value chain of activities in a business

Answer 16

In a business there are primary processes (directly add value) and support processes(indirectly add value)

Question 17

Give example of primary business processes

Answer 17

Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, Customer Service

Question 18

Give example of Support processes in a business

Answer 18

HRM
Administrative and support services
Technology development
Procurement of Resources

Question 19

Explain the value web?

Answer 19

The value web is a flexible networked system that can synchronize the value chains of business partners within an industry to respond rapidly to changes in supply and demand.

Collection of independent firms that use IT to coordinate their value chains to produce a product collectively is called a value web.

Question 20

Give an example of a company that uses links from customers to suppliers making experience convenient

Answer 20

Strong linkages to customers and suppliers
increase switching costs and loyalty by making customer experience more convenient.

Amazon: keeps track of user preferences for
purchases, and recommends titles purchased by others

Question 21

What is the insurance value chain

Answer 21

Market using customer segmentation and big data
Sales - CRM and web sales
Underwirting - IOT and AI and data
Claim management - Fraud detection
Risk Management - AI and data

Question 22

Explain critical success factors? Give an example

Answer 22

Indicators of the
performance of an
organisation and its
processes
How the business excels and outperforms competition
Core competencies
in specific activities
or managing links
between activities
Ryanair - Airplane turnaround time

Question 23

Explain networks based strategies of IS strategies

Answer 23

Take advantage of firms’ abilities to network with
one another
* Include use of:
– Network economics
– Virtual company model
– Business ecosystems

Question 24

Explain the importance and purpose of operational systems

Answer 24

They have a cost saving objective in a business. A certain performance level is required and organisations rely on these IS’s. Competitive advantage if better than competitors

ex: Operational failures pose a huge risk

Question 25

What is the biggest reason for failures in IT

Answer 25

Human competency

Question 26

Explain what happened in the aer lingus outage september 2022

Answer 26

Fibre optic cable damaged
All passenger information was inaccessible for almost
10 hours – 50 flights cancelled entirely
Poor response to outage
– Information about cancellation etc not provided to passengers in a timely way – Staff not trained in what to do

Question 27

Explain how any ICT strategy deals with risk

Answer 27

Must look at risks - need systematic processes to allow this risk to be determined
Need plans to deal with problems should they arise
Risk can also arise form relying on IT too much
Risk of doing nothing also - must look at advantage of any risks

Question 28

Explain what Hardware risks exist

Answer 28

– Faults - bad equipment
– Inadequate capacity
– Natural events
– External attack
– Personnel failure

Question 29

Explain what Software risks exist

Answer 29

– Inadequate business model
– Bad design
– Bad programming
– External Attack
– Personnel failure

Question 30

Explain IT outsourcing and why people do it

Answer 30

IT outsourcing is the process of delegating a
company’s IT function to third parties or external agencies;

Outsourcing enables companies to realise the
benefits of reengineering by tapping into and leveraging IT strategic expertise not available
internally.

Question 31

Explain offshoring

Answer 31

Outsourcing internationally is offshoring - can be done in ICT business

Question 32

What are the benefits of offshoring?

Answer 32

• Lower operational and labour costs;
• Continue focusing on core business
  processes
• You specialise in your business
• someone else specialises in ICT
• Free up internal resources for other
  purposes
• Gain access to resources not available
  internally

Question 33

What are the risks of offshoring?

Answer 33

• No control over product or service quality,
  which can affect customer satisfaction;
• The outsourcing transition phase may fail if schedules and budgets are not achieved due to
  insufficient planning
• Political, socio-economic, or other factors may amplify outsourcing risks
• Privacy and data protection regulations may not be as strict in some areas
• Language barriers
• Cultural differences in work practices etc. make
  collaboration difficult.

Question 34

What are the types of outsourcing in IT?

Answer 34

Infrastructure
Software
Data