Week 2- Information Systems in Business

1. Explain information technology’s role in business and describe how you measure success?

Information technology can transform a business. It gives a wider depth into global markets which help expand and grow a business thus making it successfull. It is used across organisations as it reduces costs, improves productivity and generates growth.

I believe that measuring success through a business is done through analysing and past performance grids to see where you are and what you need to do to improve. Financial statements should be looked at to see what money is coming in and going out of the business .

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

Buyer power – high when buyers have many choices of whom to buy from and low when their choices are few

Supplier power – high when buyers have 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 from which to choose

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

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

3. Describe the relationship between business processes and value chains?

A business process is a standardised set of activities that accomplish a specific task, such as processing a customer’s order.  The value chain approach views an organisation as a chain, or series, of processes, each of which adds value to the product or service for each customer.  The value chain helps an organisation determine the “value” of its business processes for its customers.

4. Compare Porter’s three generic strategies?

1. Broad cost leadership- this generic strategy calls for being the low cost producer in an industry for a given level of quality.

2. Broad differentiation- the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition.

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

Broad strategies reach a large market segment. Focused strategies target a niche market. Focused strategies concentrate on either cost leadership or differentiation.