CIS CH2 Info Systems & Strategy
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Porter's 5 Competitive Strategies | Threat of new entrants, power of buyers, power of suppliers, threat of substitutes, rivalry among existing competitors.
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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.
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network effects | the increased value of a product or service that results simply b/c there are more people using it.
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switching costs | costs that customers incur when they change suppliers
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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.
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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.
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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.
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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.
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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.
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sustaining technologies | offer improvements to streamline existing processes & give companies marginal advantages.
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Innovation is..... ((Michael Porter) | the central issue in economic prosperity.
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videoconferencing threatens | substitutes to the business travel industry
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Examples of disruptive innovations | horse to truck, postal mail to email, printed maps to GPS, Cable TV to Internet video
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creative destruction | what happens in an industry when disruptive innovations threaten the established players.
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ecosystem | an economic community that includes the related industries making complementary products and services, the competitors themselves, the suppliers, and also the consumers.
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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.
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primary activities | directly related to the value chain process by which products & services are created, marketed, sold, & delivered.
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support activities | performed as part of the value chain model that are not primary; include administration & management, HR, procurement, & technology support.
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benchmark | reference point used as a baseline measurement
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low cost leadership strategy | involves offering a similar product at a lower price compared to competitors.
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product differentiation strategy | involves adding special features to a product or unique add-ons for which customers are willing to pay more.
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focused niche strategy | involves differentiating a product or service for a particular market niche.
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strategic enabler | the role information systems play as tools to grow or transform the business, or facilitate a whole new business model.
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e-government | the application of ICT to government activities, especially by posting information online & offering interactive services to citizens.
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The project that led to the Internet | DARPA; Defense Advanced Research Projects Agency.
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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
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external factors that affect how the 5 forces operate | disruptive innovations, government policies, larger ecosystem companies, environmental events.
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disruptive innovations | can transform entire industries through the process of creative destruction.
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government policies | can affect industry competition through legislation, regulation, & court decisions.
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industries that operate in larger ecosystems | affected by development of complementary products & services that accelerate trends.
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environmental events (pandemics/ earthquakes) | can reshape industries & call for changes in strategy
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organizations can use the value chain model to | understand their options as they strive to compete in an industry.
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value chain activities | primary, support, extended
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primary activities (value chain) | bringing in raw resources, making the product, marketing, delivery, & customer support.
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support activities (value chain) | administration & management, HR, procurement, & technology support.
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extended value chain (value chain) | includes suppliers & customers, offers more strategic opportunities.
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benchmarks are used to | compare a company's performance to industry standards on components of the value chain.
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competitive strategies include: | low cost leadership, product differentiation, & focused niche strategy for a particular market segment.
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Information systems support competitive strategies by | reducing costs, streamlining processes, & adding unique value w/ new products or features.
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roles of information systems | running the organization
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nonprofits take advantage of info systems to | manage basic operations, & also as a strategic enabler in areas such as fund-raising & volunteer mgmt.
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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.
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as technologies become commodities, & become widely used by almost all organizations, their strategic value... | diminishes.
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Porter's 5 competitive forces help in determining... | the structure, shape and profits of the company
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IS for fundraising | can be used to find potential donors with corresponding preferences and motivation.
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IS for volunteering | CRM software that helps coordinating locations, maintaining records of events, and controlling/ managing volunteers.
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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
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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
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what does the government use information systems for | real-time system to support military personnel / material distribution, broadcasting/ criminal databases
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3 basic strategies companies adopt to compete | low cost leadership, product differentiation, & focused niche strategy.
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commodity | product for which quality is the same irrespective of person producing: paper, milk. Price fluctuates from supply/ demand. Common w/ IT sources.
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which component of an info system is most critical to success in growing/ transforming biz | people; talented people create the updates/ changes
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what is a 5 forces analysis | this helps determine if an industry is attractive for entering or not.
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