CHAPTER 2

IDENTIFYING COMPETITIVE ADVANTAGES

• To survive, an organization must create competitive advantages.

- Competitive advantage - a product or services that place a greater value to customer than similar offering from a competitor.

- First mover advantage - occurs when an organization give impact to its market share by being first with a competitive advantages.

• Organizations watch their competitor through scanning.

- Environmental scanning - analysis of events and trends in the external environment to organization.

• Three common tools to analyze and develop competitive advantages:

- Porter 's Five Forces Model

- Porter 's three generic strategies

- Values Chain

 

FIVE FORCES MODEL-EVALUATING BUSINESS SEGMENTS

 

BUYER POWER

• High when buyers have many choices and low when their choices are limited.
• Ways to reduce buyer power by loyalty programs.

- Loyalty program - rewards customers based on the amount of business they do.
- Switching cost - costa that can make customer reluctant to switch to another product or services






























SUPPLIER POWER

• High when buyers have few choices and low when their choices are many.
• Supply chain-consists of all parties involved in producing of a product or raw materials.

• Organizations that are buying goods or services can create competitive advantages through B2B marketplaces.

-Business to business(B2B) marketplace-an Internet based service that brings many buyers and sellers.

• Two types B2B marketplaces.

-Private exchange-a single buyers post its needs and open the bidding to any supplier who interesting to bid.
-Reverse auction-an auction format in increasing lower bids for willing the supplier to desired products or services at increasingly lower price.

THREAT OF SUBSTITUTE PRODUCT OR SERVICES

• High when there are many alternative to a product or service and low when there are many alternative to choose.
• Switching cost-costs that are make customers reluctant to switch another product or services.

THREAT OF NEW ENTRANTS

• High when it is easy to new competitor to enter the market and low when there are barriers to entering a market.
• Entry barrier-the expect from customer about product or service feature and must be offered by entering new market to compete and survive.

 

RIVALRY AMONG EXISTING COMPETITORS

 

• High when competition are fierce and low when competition is more complacent.
• Although competition is always intense in some industries, every industry will increased competition for the overall trend.

THE THREE GENERIC STRATEGIES-creating a business focus.

• Organization usually follow one of the Porter's three generic strategies when entering new market.
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VALUE CREATION

• Once an organization choose its strategy, it can use this tools to determined the success or failure of the strategy.
• Business process-a standardized set of activities that accomplish a specific task.
• Value Chain-views an organization as a series of processes, which adds value to a product or services for each customer.

• The competitor advantages is to:

-Target high value.
-Target low value.
-Perform some combination.



CHAPTER 1

INFORMATION TECHNOLOGY'S ROLE IN BUSINESS

Information technology is used in business.

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INFORMATION TECHNOLOGY'S IMPACT ON BUSINESS OPERATION

 

 

 

 

 

 

 

 

• Organizations typically operated by functional areas.
• All functional areas are interdependent.

 

 

 

INFORMATION TECHNOLOGY BASICS

 

• Information technology(IT) - a field that concerned the use of technology in managing and processing information.
• Information technology is important enabler of business success and innovation.
• Management information system(MIS) - a general name for the business function and academic discipline covering the application of people, technology and procedure to solved business problem.
• Business function: accounting, finance and human resources.
• Data - raw facts that described the characteristic of event.
• Information - data converted into meaningful and useful context.
• Business Intelligent - applications and technologies used to support decision making,
•  Example in system to track students:

       -Data include height, name and age.

       -Information include number of students by course and percentage of business major.

 

Data in Excel Spreadsheet

 

 

 

Data turned to information.

 

Information turned to Business Intelligent.

IT RESOURCES

• People use.
• Information technology.
• Information.

IT CULTURE

• Information-functional culture - employees use information as a influence or power over others.
• Information sharing culture - employees across departments trust each other to use information and automatically improve performance.
• Information inquiring culture - employees across department for information to better understanding in future and align with current trend and new directions.
• Information discovery culture - employees across department open to new insight about crisis and radical changes and seek way to create competitive advantages.