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CIS CH2

CIS CH2 Info Systems & Strategy

TermDefinition
Porter's 5 Competitive Strategies Threat of new entrants, power of buyers, power of suppliers, threat of substitutes, rivalry among existing competitors.
threat of new entrants Porter's 5 competitive strategies; threat new entrants into an industry pose to existing businesses; high when start-up costs are very low and newcomers can enter easily.
network effects the increased value of a product or service that results simply b/c there are more people using it.
switching costs costs that customers incur when they change suppliers
power of buyers Porter's 5 competitive strategies; the advantage buyers have when they have leverage over suppliers and can demand deep discounts & special services.
power of suppliers Porter's 5 competitive strategies; the advantage sellers have when there is a lack of competition & they can charge more for their products & services.
threat of substitutes Porter's 5 competitive strategies; the threat posed to a company when buyers can choose alternatives that provide the same item or service, often at an attractive savings.
rivalry among existing competitors Porter's 5 competitive strategies; the intensity of competition w/in an industry. It can reduce profitability in the industry due to price cutting or other competitive pressures.
disruptive innovation a new product or service, often springing from technological advances, that has the potential to reshape an industry. Film cameras vs. digital cameras.
sustaining technologies offer improvements to streamline existing processes & give companies marginal advantages.
Innovation is..... ((Michael Porter) the central issue in economic prosperity.
videoconferencing threatens substitutes to the business travel industry
Examples of disruptive innovations horse to truck, postal mail to email, printed maps to GPS, Cable TV to Internet video
creative destruction what happens in an industry when disruptive innovations threaten the established players.
ecosystem an economic community that includes the related industries making complementary products and services, the competitors themselves, the suppliers, and also the consumers.
value chain model developed by Michael Porter; describes the activities a company performs to create value, as it brings in raw resources from suppliers, transforms them in some way, & then markets product/ service to buyers.
primary activities directly related to the value chain process by which products & services are created, marketed, sold, & delivered.
support activities performed as part of the value chain model that are not primary; include administration & management, HR, procurement, & technology support.
benchmark reference point used as a baseline measurement
low cost leadership strategy involves offering a similar product at a lower price compared to competitors.
product differentiation strategy involves adding special features to a product or unique add-ons for which customers are willing to pay more.
focused niche strategy involves differentiating a product or service for a particular market niche.
strategic enabler the role information systems play as tools to grow or transform the business, or facilitate a whole new business model.
e-government the application of ICT to government activities, especially by posting information online & offering interactive services to citizens.
The project that led to the Internet DARPA; Defense Advanced Research Projects Agency.
what do Porter's 5 forces that shape an industry's competitive structure do? Help determine how profitable companies operating in the industry will be
external factors that affect how the 5 forces operate disruptive innovations, government policies, larger ecosystem companies, environmental events.
disruptive innovations can transform entire industries through the process of creative destruction.
government policies can affect industry competition through legislation, regulation, & court decisions.
industries that operate in larger ecosystems affected by development of complementary products & services that accelerate trends.
environmental events (pandemics/ earthquakes) can reshape industries & call for changes in strategy
organizations can use the value chain model to understand their options as they strive to compete in an industry.
value chain activities primary, support, extended
primary activities (value chain) bringing in raw resources, making the product, marketing, delivery, & customer support.
support activities (value chain) administration & management, HR, procurement, & technology support.
extended value chain (value chain) includes suppliers & customers, offers more strategic opportunities.
benchmarks are used to compare a company's performance to industry standards on components of the value chain.
competitive strategies include: low cost leadership, product differentiation, & focused niche strategy for a particular market segment.
Information systems support competitive strategies by reducing costs, streamlining processes, & adding unique value w/ new products or features.
roles of information systems running the organization
nonprofits take advantage of info systems to manage basic operations, & also as a strategic enabler in areas such as fund-raising & volunteer mgmt.
governments use info systems extensively for e-government initiatives, especially to increase access & enhance services for the public. Also look for initiatives that offer potential value for the country like finding alternative forms of energy or creating Internet.
as technologies become commodities, & become widely used by almost all organizations, their strategic value... diminishes.
Porter's 5 competitive forces help in determining... the structure, shape and profits of the company
IS for fundraising can be used to find potential donors with corresponding preferences and motivation.
IS for volunteering CRM software that helps coordinating locations, maintaining records of events, and controlling/ managing volunteers.
Various purposes for Information systems (IS) helps run biz by providing support to productivity, streamlines admin & mgmt/ customer service, help grow biz & facilitate new biz models
How do info systems apply to competitive strategies for nonprofit organizations due to small budgets, they must use IS to help automate certain processes to decrease costs. See fundraising & volunteering
what does the government use information systems for real-time system to support military personnel / material distribution, broadcasting/ criminal databases
3 basic strategies companies adopt to compete low cost leadership, product differentiation, & focused niche strategy.
commodity product for which quality is the same irrespective of person producing: paper, milk. Price fluctuates from supply/ demand. Common w/ IT sources.
which component of an info system is most critical to success in growing/ transforming biz people; talented people create the updates/ changes
what is a 5 forces analysis this helps determine if an industry is attractive for entering or not.
Created by: kld0519