Monday, September 21, 2009

Chapter 2: Competitive Advantage and Strategic Information Systems

Q1. What is the difference between an 'application' and a computer-based information system?

A computer based information system is an information system that uses computer technology to perform some or all of its intended tasks. An application program designed to support a specific task or business process.

Q2. What are strategic information systems?

Systems that help an organization gain a competitive advantage by supporting its strategic goals and/or increasing performance and productivity.

Q3. According to Porter, what are the five forces that could endanger a firm’s position in its industry or marketplaces?

1. The threat of entry to new competitors: the threat of new competitor entry is high when it is easy to enter your market and low when significant barriers to entry exist.
2. The bargaining power of suppliers: Suppliers’ power is high when buyers have few choices from whom to buy and low when buyers have many choices.
3. The bargaining power of customers (buyers): buyer power is high when buyers have many choices from whom to buy and low when buyers have few choices.
4. The threat of substitute products or services: is there are many substitutes for an organizations’ products or services, then the threat of substitutes is high.
5. The rivalry among existing firms in the industry: the threat from rivalry is high when there is intense competition among many firms in an industry. And low when the competition is among fewer firms and is not as intense.

Q4. In relation to Porter's value chain model, what is meant by primary activities and support activities, and how does IT support these activities?

Primary activities are those business activities related to the production and distribution of the firm’s products and services, thus creating value. Support activities are business activities that do not add value directly to a firm’s product or service under consideration but support the primary activities that do add value. IT supports these activities by assisting them in things like E-commerce or E-business in order to achieve and sustain a competitive advantage.

Q5. Discuss the logic of building information systems in accordance with the organizational hierarchical structure.

Q6. How has the Internet affected each of the five forces in Porter’s competitive forces model.

1. Cost leadership strategy: research different prices at a faster pace in order to produce products and/or services at the lowest cost in the industry.
2. Differentiation strategy: offer different products, services, and enables the business to develop different product features.
3. Innovation strategy: internet helps introduce new products and services, add new features to existing products and services, or develop new ways to produce them.
4. Operational effectiveness strategy: improvements in the internet increase quality, productivity, and employee and customer satisfaction.
5. Customer-orientation strategy: web-based systems can provide a personalized, one-to-one relationship with each customer.

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