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Learn how organizational strategy, competitive forces, and business processes determine the structure of information systems and provide a competitive edge. Discover the role of information systems in creating customer lock-ins, supplier lock-ins, entry barriers, alliances, and cost reduction. Explore a real-life example of ABC, Inc. using information systems to gain a competitive advantage.
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Q1 – How does organizational strategy determine information systems structure? • Q2 – What five forces determine industry structure? • Q3 – What is competitive strategy? • Q4 – What is a value chain? • Q5 – How do business processes generate value? • Q6 – How does competitive strategy determine business processes and the structure of information systems? • Q7 – How do information systems provide competitive advantages?
Q7 – How Do Information Systems Provide Competitive Advantages? • There are two ways businesses can respond to the five competitive forces. • They can gain a competitive advantage via their products and services. • Creating new products and services, or • Enhancing its existing products or services, or • Differentiating its products and services from its competitors • Information systems can help create a competitive advantage by being part of the product or by providing support to the product.
Q7 – How Do Information Systems Provide Competitive Advantages? • A company can gain a competitive advantage by using business processes to • Lock in customers via high switching costs, making it too expensive for the customer to switch to a competitor. • Lock in suppliers via easy-to-use connections, discouraging them from changing to another business. • Create entry barriers for new competitors, thereby raising the costs to enter the market. • Establish alliances with other organizations and set standards, reducing purchase costs and providing benefits for everyone. • Reduce costs which in turn reduces prices and increases profitability.
Q7 – How Do Information Systems Provide Competitive Advantages? • ABC, Inc, an actual company, used information systems to create a competitive advantages by • Investing heavily in information technology from the beginning and • Leading the shipping industry in application of information systems. • The following slide shows some of the Web pages ABC, Inc uses within its information system.
Q7 – How Do Information Systems Provide Competitive Advantages? Fig3-13 ABC, Inc Web Page to Select recipient from customer records
Q7 – How Do Information Systems Provide Competitive Advantages? Fig 3-14 ABC, Inc Web page to select contact from customer records
Q7 – How Do Information Systems Provide Competitive Advantages? Fig 3-15 ABC, Inc Web page to specify email notification
