Weekly Questions: Week Two Information Systems in Business.

Chapter One Questions
Explain information technology’s role in business and describe how you measure success?  

IT role is being an enabler of Business success and Innovation. IT  automates business processes and communication.

It can transform a business, reduce costs, improve productivity and generate growth.

http://www.quickmba.com/strategy/generic.shtml

List and describe each of the forces in Porter’s Five Forces Model?

Determines the relative attractiveness of an industry:

BSTTR

Buyer Power:HIGH Ecommerce more choice -LOW =LOYALTY PROGRAM

Supplier Power: LOW Reduced bigger market, power, LOW when choice is many(suppliers want LOW, Org HIGH)

Threat of SUBSTITUTE P&S: Increases rivalry, alternatives, options = switching costs. 

Threat of NEW entrants:HIGH Marketing new P&S High within IT, Online, LOW when barriers Telstra

Rivalry among existing competitors HIGH when market is fierce LOW when competition is complacent.= “switching costs steal customers” 

http://notesdesk.com/notes/strategy/porters-five-forces-model-porters-model/

Describe the relationship between business processes and value chains?

Used to determine the success or failure of its chosen strategy:

VALUE CREATION = BUSINESS PROCESSES (standard activities that accomplish tasks) + EFFICIENT VALUE CHAINS (series of Processes -each that adds value to P&S).

Creation: Primary Value Activities PVA -Raw materials, make, market, sell and provide support. **Increase PVA decreases the threat of substitutes**

Support Value Activities SVA - Support the PVA**Increase SVA decrease new entrants**

CUSTOMERS DETERMINE EACH ACTIVITY AND HOW IT ADDS VALUE TO THE P&S 

http://www.themanager.org/models/valuechain.htm


Compare Porter’s three generic strategies?

Broad cost Leadership: being a low cost producer/ selling price beats profit of rivals, competition may match but suffer losses - targets broad market, can start to produce cheaply(lower cost materials) - last a long time. Using VERTICAL INTEGRATION DECISIONS - RISKS all lower cost e.g. due to IT

Broad differentiation:P&S that has developed unique attributes n valued by customers, some firms may charge premium price due cusomter not finding substitutes RISKS: Imitations by competitiors and change in customer tates.

Focused strategy: attempts to achieve either cost advantage or differentiation - high customer loyalty and discourages competition.RISKS: Imitation and cost leaders adapt products and compete. 

http://www.elearnmag.org/subpage.cfm?section=tutorials&article=17-2