Chapter 3, Problem 3RQ

Explanation of Solution

Porter’s competitive forces model:

• The model is used to provide a general view about the firms, the competitors of the firm and the environment of the firm.
• The firm’s general business environment is being brought out using the porter’s model.
• The model contains five competitive forces that are used in shaping the fate of the firm and they are:
  • Traditional competitors
    • There is chance where there may be an increase in the number of competitors...

Explanation of Solution

Four competitive strategies that is enabled by the information system:

The below are the four competitive strategies that are enabled using the information technology system and they are:

• Low cost leadership
  • The operational cost is lowered by providing the lowest price.
• Differentiation in the product
  • The process of enabling new products and services for the convenience of the customer with the use of existing products and services...

Explanation of Solution

Support provided by the information system based on the competitive strategy:

The support that is provided by the information system for each of the competitive strategies is shown below:

• Low cost leadership:
  • The information system is used to improve the inventory management, supply management by creating a customer response system.
  • The best example for the system would be Walmart.
• Product differentiation:
  • The information system is used to create products and services that are being made personalized and customized for the precise use of the required customers based on the needs.
  • EBay, and Google will be a good example for this system...

Explanation of Solution

Necessity of aligning IT with the business objective for the use of the system:

• The main idea of using the IT strategy in a business is to guarantee whether the technology serves the needs of the business but not in the other way around.
• The business goals are being aligned with IT such that to make it more successful and making the business even profitable...

Explanation of Solution

Value chain model:

• The value chain model is used in highlighting the specific activities that are laid with the business.
• Using the value chain the best competitive strategies can be applied at its best and due to that, the information system will likely considered having an impact that could be strategic.
• The model will help the firm in obtaining and identifying specific and critical leverage points and that can be utilized by information technology to improve their position among the competitors.
• The firm is viewed in the value chain model as sequence of basic activities that could improve the value of the products and service firm produces...

Explanation of Solution

Identifying the opportunities of the value chain model for information systems:

• The information system is used at every stage of value chain in order to improve the operational efficiency, lowering the cost, promoting the profit margins and establishing a stronger relationship with the customers and with the suppliers.
• The activities that provide added value are being examined with the use of information system based on the activities that are being performed at every stage of the value chain...

Explanation of Solution

Value web and its relation with the value chain:

• An independent collection of firms that utilizes the information technology for coordination with the value chain for producing product and services in a collective form is called as value web.
• The value web is considered to be more customer driven and seems to be operated in the less linear order that of the traditional value chain...

Explanation of Solution

Change that is made by the internet on the competitive forces and competitive advantages:

• The internet has degraded some of the industries and became a threat to other business process.
• The internet paved a way for the new marketers and became the basic for most of the new businesses.
• With the help of internet may new products and services, new business model and new industries to develop in the faster rate.
• The internet has made the competitive edge between the industries become more intense...

Explanation of Solution

Information system promoting the interactions and core competencies that will improve the competitive advantage:

• A collection of business, which organized in the form of strategic business units, is called as large corporation.
• The overall performance of the business units can be improved with the use of information system, which will promote the interaction, and core competencies that are related to the business process.
• The synergy is process where the output that is produced by one unit will be used as the input to the other units.
  • It is a process where two organizations can be grouped in markets and expertise and the relationship will be helpful to generate profit with the lower cost of operation...

Explanation of Solution

Business benefits of using the network economics:

The below are the benefits of using the network economics:

• The marginal cost of adding a new particular participant is considered to be zero and the gain obtained through this margin is considered to be high.
• When the number of participants is developed the value that is obtained with the number of participants will also be greater because the interaction will be made with more number of peoples.
• The availability of the internet and network technology encouraged the firm in taking advantage with the plan of creating the network among each other and creating a new network...

Explanation of Solution

Virtual company:

When a network is used to link peoples, properties and innovation that are used to be associated with other companies in order of creating and distributing the service and products without getting limited with the boundaries of the organization or the boundaries of the physical location is called as virtual company...

Explanation of Solution

Business ecosystem:

• When multiple collections of industries participate in sets in order to deliver services or products thus creating values to its customers is called as business ecosystem.
• It is considered to have an interdependent network of suppliers, distributors, and organization that outsources, firms that provide transportation service along with the manufacturers of the technology...

Explanation of Solution

Disruptive technologies creating a strategic opportunity:

• The accessibility, storage and information distribution and knowledge about the organization has increased with the evolution of the Internet.
• The information that is required is available whenever required and any data can be obtained at any point of time.
• The information and storage of knowledge has increased its scope, range and depth with the increased usage of the internet.
• The cost is lowered but the quality of the information and knowledge distribution is improved.
• The transaction cost and the cost of acquiring the information is lowered...