Week Two - Information Systems in Business

Explain why competitive advantages are typically temporary?

Competitive advantage is when a product or service that an organisation's customers place a greater value on than similar offerings from a competitor. Unfortunately, competitive advantages are typically temporary because competitors often seeks ways to duplicate the competitive advantages.

Explain information technology's role in business and describe how you measure success?

Information technology is everywhere in business. By understanding technology, this will allow workers to have an advantage in business. IT has a major impact on business, it has many effects on a business such as the way it processes, it also has the potential to transform it for example a small one-person business into a very successful online business.

When measuring how well your business or IT systems is operating you should ask yourself questions such as:

1) Is the internal IT operation performing satisfactorily?

2) Should I outsource some or all of the IT operations?

3) How is my outsourcer performing?

4) What are the risk factors to consider in an IT project?

Business can also develop a benchmark and compare its operations with it to measure its successfulness.

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

Porter's Five Forces Model includes:

-Buyer Power: high when buyers have many choices of whom to buy from and low when their choices are few

- Supplier Power: high when one supplier has a concentrated power over an industry. Buyers have a few choices of whom to buy from and low when their choices are many

-Threat of substitute products or services: high when there are many alternatives to a product or service and low when there are few alternatives

-Threat of new entrants: high when it is easy for new competitors to enter a market and low when there are significant entry

-Rivalry among existing competitors: high when competition is fierce in a market and low when competition is more complacent

Compare Porter's three generic strategies?
Porter's three generic strategies include:

1. Broad cost leadership-  the business sets a low initial price on a production in an attempt to reach a mass market immediately

2.Broad differentiation- the business sets a high initial price on a product, with the plan of recovering new product development costs quickly. It also help to perceive to be unique or higher n quality.

3. Focused strategy- this strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation.

Describe the relationships between business processes and value chain analysis?

-Business process: a standardised set of activities that accomplish a specific task

-Value Chain: views an organisation as a series of processes, each of which adds value to the product or service.