Koofers

MSU Flyer Board
College Manor - 50 yards to MSU! Leasing for Fall
NO CAR? NO PROBLEM! Close to Union & Music Blg. Right Down town, Hardwood floors. Small friendly building 517-332-4818
Posted by Your friends @ College Manor Apartments
got Questions? »

Exam One Flash Cards - Flashcards

Flashcard Deck Information

Class:ITM 309 - Business Information Systems
Subject:Information Technology Mgmt
University:Michigan State University
Term:Spring 2012
- of -
INCORRECT CORRECT
- INCORRECT     - CORRECT     - SKIPPED
Shuffle Remaining Cards Show Definitions First Take Quiz (NEW)
Hide Keyboard shortcuts
Next card
Previous card
Mark correct
Mark incorrect
Flip card
Start Over
Shuffle
      Mode:   CARDS LIST       ? pages   PRINT EXIT
Competitive advantages Competitive advantages is a particular part of service that customers value greater than similar offerings from their competitors - they are typically temporary - in turn new strategies must be developed
What are the ways a competitor can deal with competitive advantage? New Technology- Hiring away key employees - coping business strategy
What is an example of Competitive advantage Apples Ipod and Itunes - Itunes came first, then the portable Ipod- several companies followed their lead.   The creation of the Ipad and additional features to the Ipod are ways that Apple keeps up thier competitive advantage.
First Mover advantage occurs when a company can significantly increase its market share by being first with a new competitive advantage.

Along with Apple FedEx also had this with self service software


Generated by Koofers.com
Competitive Intelligence is the process of gathering information about the competitive environment, including competitors’ plans, activities, and products, to improve a company’s ability to succeed.

It means understanding and learning as much as possible
as soon as possible about what is occurring outside the company to remain competitive.

 

Example of Competitive Intelligence Frito Lay - they carry handheld computers and record the product offerings, inventory, and even product locations

 
3 Things Managers do to asses intelligence and gain advantages? 1 .  The Five Forces Model (for evaluating industry attractiveness). 
   2 .  The three generic strategies (for choosing a business focus). 
   3 .  Value chain analysis (for executing business strategies).


Porter's Five Forces Model: Pressures that can hurt Sales ■  Knowledgeable customers can force down prices by pitting rivals against each
other. 
■  Influential suppliers can drive down profits by charging higher prices for supplies. 
■  Competition can steal customers. 
■  New market entrants can steal potential investment capital. 
■  Substitute products can steal customers.

Generated by Koofers.com
What does Porters 5 Forces Model Aim to do analyzes the competitive forces within
the environment in which a company operates to assess the potential for profitability in an industry. Its purpose is to combat these competitive forces by identifying opportunities, competitive advantages, and competitive intelligence. If the forces are strong, they increase competition; if the forces are weak, they decrease competition.


What is Buyer Power? ability of buyers to affect the price they must pay for an item. Factors used to assess buyer power include number of customers, their sensitivity to price, size of orders, differences between competitors, and availability of substitute products. If buyer power is high, customers can force a company and its competitors to compete on
price, which typically drives prices down.

Customers drive  down Prices
How can we reduce Buyer Power Switching Costs - costs that make
customers reluctant to switch to another product or service.

Example: Switching doctors, and having to build a new relationship with another one.

and loyalty programs,    which reward customers based on their spending.


What is Supply Chain? consists of all parties involved, directly or indirectly, in obtaining raw
materials or a product.

A company  will often be a customer and a supplier
Generated by Koofers.com
What is Supplier Power? is the suppliers’ ability to influence the prices they charge for supplies (including materials, labor, and services).

Factors used to appraise supplier power include number  of suppliers, size of suppliers, uniqueness of services, and availability of substitute products. If supplier power is high, the supplier can influence the industry by:
■  Charging higher prices. 
■  Limiting quality or services. 
■  Shifting costs to industry participants.

Baltzan, Paige (2011-01-31). Business Driven Information Systems (Page 17). Business And Economics. Kindle Edition.
What Happens when Suppliers raise Prices? the buyers will pass on the increase to their
customers by raising prices on the end-product. When supplier power is high, buyers lose revenue because they cannot pass on the raw material price increase to their customers.

Threat of Substitute Products or Services high when there are many alternatives to a product or service and low when there are few alternatives from which to choose.
Polaroid had this unique competitive advantage for many years until it forgot to observe competitive intelligence. Then the firm went bankrupt when people began taking digital pictures with everything from video cameras to cell phones.  A company can reduce the threat of substitutes by offering additional value through
wider product distribution.

Baltzan, Paige (2011-01-31). Business Driven Information Systems (Page 17). Business And Economics. Kindle Edition.
 
Threat of New Entrants is high when it is easy for new competitors to enter a market
and low when there are significant entry barriers to joining a market. An entry barrier is  a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.

The threat of new entrants is high because new airlines are
continuously entering the market, including sky taxies offering low-cost on-demand air taxi service.

Baltzan, Paige (2011-01-31). Business Driven Information Systems (Page 18). Business And Economics. Kindle Edition.
Generated by Koofers.com
What are the Competitive Intelligence Tools - Porters Five Forces Model
- Porters Three Generic Strategies
- Porters Value Chain Analysis 


Rivalry among existing competitors is high when competition is fierce in a market
and low when competitors are more complacent. Although competition is always more intense in some industries than in others, the overall trend is toward increased competition in almost every industry.




Porters Three Generic Strategies for entering a new market? (1) broad cost leadership, (2) broad differentiation, and (3) focused strategy. Broad strategies reach a large market segment, while focused strategies target a niche or unique
market with either cost leadership or differentiation.

Porter Suggest doing only one
Broad Market and Low Cost Walmart competes by offering a broad range of
products at low prices. Its business strategy is to be the low-cost provider of goods for the cost-conscious consumer.

 
Generated by Koofers.com
Broad Market High Costs Neiman Marcus competes by offering a broad range of
differentiated products at high prices. Its business strategy offers a variety of specialty
and upscale products to affluent consumers.

Narrow Market Low Costs Payless competes by offering a specific product,
shoes, at low prices. Its business strategy is to be the low-cost provider of shoes. Payless competes with Walmart, which also sells low-cost shoes, by offering a far bigger selection of sizes and styles.


Narrow Market High Costs Tiffany & Co. competes by offering a differentiated
product, jewelry, at high prices. Its business strategy allows it to be a high-cost provider of premier designer jewelry to affluent consumers.

 
Porters Value Chain Analysis which views a firm as a series of business processes that each add value to the product or service.

Value chain analysis is a useful tool for determining how to create the greatest possible value for customers (see  Figure 1.14 ). The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a cost advantage or product differentiation.



Generated by Koofers.com
Primary Value Activities shown at the bottom of the value chain in  Figure 1.14 , acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services.


Business Process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order.

Support Value Process along the top of the value chain in  Figure 1.14 , include firm
infrastructure, human resource management, technology development, and procurement. Not surprisingly, these support the primary value activities.


Porters Competitive Forces Bargaining Power of Customers - Bargaining Power of Suppliers - Rivalry of Competitors - Threat of New Entrants - Threat of Substitutes
Generated by Koofers.com
What is Corporate Strategy all about deciding how your firm will create economic value added
What are the Drivers of firm Profitability? Industry Structure and Sustainable competitive advantage
Industry Structure Determining profitability of average competitor and Analyze with 5 forces model
Sustainable Competitive Advantages Determines Profitability relative to the average competitor and Analyze using the value chain model
Generated by Koofers.com
Value Creation Once an organization chooses its strategy , it can use tools such as the value chain to determine the success or failure of its chosen strategy
IT Competitive Strategy Summary IT can support many competitive strategies including broad cost leadership, broad differentiation and focused strategies
IT can Help Build Customer- focused business - Re-engineer business process - Business become agile companies - Create virtual companies - Build knowledge by creating companies 
What is a Process?
A group of business activities undertaken by an organization in pursuit of a common goal.

Typical business processes include receiving orders, selling products, delivering services, distributing products, or invoicing for services received.

A business process usually depends upon several business functions for support, e.g. IT or  personnel.
A business process rarely operates in isolation, i.e. processes are interdependent
Generated by Koofers.com
Customer Facing Process results in a product or service that is received by an organization’s external customer
Business Facing Process invisible to the external customer but essential to the effective management of the business
Business Process Characteristics
The processes have internal and external users
A process is cross-departmental
The processes occur across organizations
The processes are based on how work is done in the organization
Every process should be documented and fully understood by everyone
Processes should be modeled to promote complete understanding
What are the Process steps? activities the customer and store personnel do to complete the transaction
Generated by Koofers.com
What is the Business Process a standardized set of activities that accomplish a specific task, such as processing a customer’s order
What do Business Processes do? transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools
Order Management Cycle
Organizations are organized vertically whereas the orders flow horizontally !
Horizontal Gaps
Incomplete visibility of top management of the Order Management Cycle
Steps in the OMC
Order Planning
Order Generation
Cost Estimation and Pricing
Order Receipt and Handling
Order Selection and Prioritization
Scheduling
Fulfillment
Billing and Returns & Claims and Postal Service
Returns and Claims
Postsales Service
Generated by Koofers.com
Efforts to Improve OMC Analyze the OMC and System Focus
Analyze the OMC Graph the gaps from a Customer Perspective rather than an Internal perspective!
System Focus
Move across boundaries
Interfunctional programs and investments.
Role of IT

Staple yourself to a order
What do the Process do? are the vehicles for meeting customer needs and achieving organization goals
Generated by Koofers.com
Can a process be preformed with totally different results
The same process can be performed with drastically different results depending on who does the work and what information & technology is being used
Attention to eliminate unnecessary work& improve productivity is accomplished... Through process improvement or process reengineering
Generated by Koofers.com

List View: Terms & Definitions

  Hide All 50 Print
 
Front
Back
 Competitive advantagesCompetitive advantages is a particular part of service that customers value greater than similar offerings from their competitors - they are typically temporary - in turn new strategies must be developed
 What are the ways a competitor can deal with competitive advantage?New Technology- Hiring away key employees - coping business strategy
 What is an example of Competitive advantageApples Ipod and Itunes - Itunes came first, then the portable Ipod- several companies followed their lead.   The creation of the Ipad and additional features to the Ipod are ways that Apple keeps up thier competitive advantage.
 First Mover advantageoccurs when a company can significantly increase its market share by being first with a new competitive advantage.

Along with Apple FedEx also had this with self service software


 Competitive Intelligenceis the process of gathering information about the competitive environment, including competitors’ plans, activities, and products, to improve a company’s ability to succeed.

It means understanding and learning as much as possible
as soon as possible about what is occurring outside the company to remain competitive.

 

 Example of Competitive IntelligenceFrito Lay - they carry handheld computers and record the product offerings, inventory, and even product locations

 
 3 Things Managers do to asses intelligence and gain advantages?1 .  The Five Forces Model (for evaluating industry attractiveness). 
   2 .  The three generic strategies (for choosing a business focus). 
   3 .  Value chain analysis (for executing business strategies).


 Porter's Five Forces Model: Pressures that can hurt Sales■  Knowledgeable customers can force down prices by pitting rivals against each
other. 
■  Influential suppliers can drive down profits by charging higher prices for supplies. 
■  Competition can steal customers. 
■  New market entrants can steal potential investment capital. 
■  Substitute products can steal customers.

 What does Porters 5 Forces Model Aim to doanalyzes the competitive forces within
the environment in which a company operates to assess the potential for profitability in an industry. Its purpose is to combat these competitive forces by identifying opportunities, competitive advantages, and competitive intelligence. If the forces are strong, they increase competition; if the forces are weak, they decrease competition.


 What is Buyer Power?ability of buyers to affect the price they must pay for an item. Factors used to assess buyer power include number of customers, their sensitivity to price, size of orders, differences between competitors, and availability of substitute products. If buyer power is high, customers can force a company and its competitors to compete on
price, which typically drives prices down.

Customers drive  down Prices
 How can we reduce Buyer PowerSwitching Costs - costs that make
customers reluctant to switch to another product or service.

Example: Switching doctors, and having to build a new relationship with another one.

and loyalty programs,    which reward customers based on their spending.


 What is Supply Chain?consists of all parties involved, directly or indirectly, in obtaining raw
materials or a product.

A company  will often be a customer and a supplier
 What is Supplier Power?is the suppliers’ ability to influence the prices they charge for supplies (including materials, labor, and services).

Factors used to appraise supplier power include number  of suppliers, size of suppliers, uniqueness of services, and availability of substitute products. If supplier power is high, the supplier can influence the industry by:
■  Charging higher prices. 
■  Limiting quality or services. 
■  Shifting costs to industry participants.

Baltzan, Paige (2011-01-31). Business Driven Information Systems (Page 17). Business And Economics. Kindle Edition.
 What Happens when Suppliers raise Prices?the buyers will pass on the increase to their
customers by raising prices on the end-product. When supplier power is high, buyers lose revenue because they cannot pass on the raw material price increase to their customers.

 Threat of Substitute Products or Serviceshigh when there are many alternatives to a product or service and low when there are few alternatives from which to choose.
Polaroid had this unique competitive advantage for many years until it forgot to observe competitive intelligence. Then the firm went bankrupt when people began taking digital pictures with everything from video cameras to cell phones.  A company can reduce the threat of substitutes by offering additional value through
wider product distribution.

Baltzan, Paige (2011-01-31). Business Driven Information Systems (Page 17). Business And Economics. Kindle Edition.
 
 Threat of New Entrantsis high when it is easy for new competitors to enter a market
and low when there are significant entry barriers to joining a market. An entry barrier is  a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.

The threat of new entrants is high because new airlines are
continuously entering the market, including sky taxies offering low-cost on-demand air taxi service.

Baltzan, Paige (2011-01-31). Business Driven Information Systems (Page 18). Business And Economics. Kindle Edition.
 What are the Competitive Intelligence Tools- Porters Five Forces Model
- Porters Three Generic Strategies
- Porters Value Chain Analysis 


 Rivalry among existing competitorsis high when competition is fierce in a market
and low when competitors are more complacent. Although competition is always more intense in some industries than in others, the overall trend is toward increased competition in almost every industry.




 Porters Three Generic Strategies for entering a new market?(1) broad cost leadership, (2) broad differentiation, and (3) focused strategy. Broad strategies reach a large market segment, while focused strategies target a niche or unique
market with either cost leadership or differentiation.

Porter Suggest doing only one
 Broad Market and Low CostWalmart competes by offering a broad range of
products at low prices. Its business strategy is to be the low-cost provider of goods for the cost-conscious consumer.

 
 Broad Market High CostsNeiman Marcus competes by offering a broad range of
differentiated products at high prices. Its business strategy offers a variety of specialty
and upscale products to affluent consumers.

 Narrow Market Low CostsPayless competes by offering a specific product,
shoes, at low prices. Its business strategy is to be the low-cost provider of shoes. Payless competes with Walmart, which also sells low-cost shoes, by offering a far bigger selection of sizes and styles.


 Narrow Market High CostsTiffany & Co. competes by offering a differentiated
product, jewelry, at high prices. Its business strategy allows it to be a high-cost provider of premier designer jewelry to affluent consumers.

 
 Porters Value Chain Analysiswhich views a firm as a series of business processes that each add value to the product or service.

Value chain analysis is a useful tool for determining how to create the greatest possible value for customers (see  Figure 1.14 ). The goal of value chain analysis is to identify processes in which the firm can add value for the customer and create a competitive advantage for itself, with a cost advantage or product differentiation.



 Primary Value Activitiesshown at the bottom of the value chain in  Figure 1.14 , acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services.


 Business Processis a standardized set of activities that accomplish a specific task, such as processing a customer’s order.

 Support Value Processalong the top of the value chain in  Figure 1.14 , include firm
infrastructure, human resource management, technology development, and procurement. Not surprisingly, these support the primary value activities.


 Porters Competitive ForcesBargaining Power of Customers - Bargaining Power of Suppliers - Rivalry of Competitors - Threat of New Entrants - Threat of Substitutes
 What is Corporate Strategy all about decidinghow your firm will create economic value added
 What are the Drivers of firm Profitability?Industry Structure and Sustainable competitive advantage
 Industry StructureDetermining profitability of average competitor and Analyze with 5 forces model
 Sustainable Competitive AdvantagesDetermines Profitability relative to the average competitor and Analyze using the value chain model
 Value CreationOnce an organization chooses its strategy , it can use tools such as the value chain to determine the success or failure of its chosen strategy
 IT Competitive Strategy SummaryIT can support many competitive strategies including broad cost leadership, broad differentiation and focused strategies
 IT can HelpBuild Customer- focused business - Re-engineer business process - Business become agile companies - Create virtual companies - Build knowledge by creating companies 
 What is a Process?
A group of business activities undertaken by an organization in pursuit of a common goal.

Typical business processes include receiving orders, selling products, delivering services, distributing products, or invoicing for services received.

A business process usually depends upon several business functions for support, e.g. IT or  personnel.
A business process rarely operates in isolation, i.e. processes are interdependent
 Customer Facing Processresults in a product or service that is received by an organization’s external customer
 Business Facing Processinvisible to the external customer but essential to the effective management of the business
 Business Process Characteristics
The processes have internal and external users
A process is cross-departmental
The processes occur across organizations
The processes are based on how work is done in the organization
Every process should be documented and fully understood by everyone
Processes should be modeled to promote complete understanding
 What are the Process steps?activities the customer and store personnel do to complete the transaction
 What is the Business Processa standardized set of activities that accomplish a specific task, such as processing a customer’s order
 What do Business Processes do?transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools
 Order Management Cycle
Organizations are organized vertically whereas the orders flow horizontally !
Horizontal Gaps
Incomplete visibility of top management of the Order Management Cycle
 Steps in the OMC
Order Planning
Order Generation
Cost Estimation and Pricing
Order Receipt and Handling
Order Selection and Prioritization
Scheduling
Fulfillment
Billing and Returns & Claims and Postal Service
Returns and Claims
Postsales Service
 Efforts to Improve OMCAnalyze the OMC and System Focus
 Analyze the OMCGraph the gaps from a Customer Perspective rather than an Internal perspective!
 System Focus
Move across boundaries
Interfunctional programs and investments.
Role of IT

Staple yourself to a order
 What do the Process do?are the vehicles for meeting customer needs and achieving organization goals
 Can a process be preformed with totally different results
The same process can be performed with drastically different results depending on who does the work and what information & technology is being used
 Attention to eliminate unnecessary work& improve productivity is accomplished...Through process improvement or process reengineering
36, "/var/app/current/tmp/"