Professional Documents
Culture Documents
Strategies:
Low cost leadership: IS used to lower prices and cost of operations.
o Qantas use of online check ins to lower administrative expenses
Product differentiation: IS used to modify existing products/services. They
are capable of creating customizable products to fit the precise needs of
individual customers.
o Mass customization: ability to offer individually tailored products
using the same production resources as mass production
o McDonalds create your taste vendors
Focus on market niche: IS is used to serve the needs of the niche market
better than competitors. Involves analyzing customer preferences and
buying patterns from data.
o Credit card companies collect data on individuals such as their
spending behaviour to determine whether the cardholder is a good
or bad credit risk.
Strengthening customer and supplier intimacy (high switching costs): IS
tightens the relationship between suppliers and customers.
o Switching costs can be explicit charging customers for switching
products
o High switching costs give customers less purchasing power
o Amazon keeps track of user preferences for books and CD purchases
and can even recommend titles purchased by others to its
customers.
Adopting new technology or constantly improving technology can raise
barriers to market entrants.
5. What is the value chain model and what are the activities in the model?
Value chain model: views firms as a series of value-adding activities that
helps organisations identify opportunities for strategic IS application in
order to gain a competitive advantage
o Also a benchmarking tool to ensure efficiency and effectiveness of
the firm
Primary activities: directly related to the production and distribution of the
firms products and creates value for the customer
o Inbound logistics, operations, sales and marketing, service and
outbound logistics
Secondary activities: make the delivery of the primary activities possible
o Administration and management, human resources, technology and
procurement
Others see Web 3.0 as the contextual web where the immense
amounts of content available will be filtered by contextual factors
such as time and location.
12.What are synchronous and asynchronous communications?
Groupware: class of software that enables people to work together more
effectively.
Synchronous tools: tools that enable communications at the same time
o Shared whiteboards
o Electronic meeting systems: utilises network computers and
sophisticated software to support various group tasks
o Online chats
Asynchronous tools: tools that enable communication at different times
o Emailing
o Intranets
o Discussion forums: emulate traditional bulletin boards and allow for
threaded discussion between participants.
13.What are the benefits of groupware?
Parallelism: enables may people to speak and listen at the same time
providing equal opportunities to participate
Group memory: automatically records member ideas, comments and
votes which allows members to focus on the discussion rather than on
note taking
Access to external information: can easily incorporate external
electronic data and files, documents can be collected and easily
distributed to all members
Group size: enables larger groups to participate providing broader
perspectives
Spanning time and space: enables members to collaborate from
different places at different times thus reducing travel costs
14.What is the concept of the long tail?
Catering to niche markets in addition to purely selling mainstream
products
Based on the idea that the distribution of needs and wants can be modeled
by a normal distribution where the bulk in the centre represents the mass
market and the long tails represents the niche market
For brick and mortar stores, high storage and distribution costs make niche
product investments inefficient and expensive. Therefore these stores only
target mass markets
Lower costs presented by e-tailing enables such firms to focus on the long
tail.
NetFlix can afford to have a very large selection of unpopular movies and
still make profits
15.What are the core business processes?
Order to cash: processes associated with selling a product or service
o Online retailers provide real time information on available stock
o Involves multiple sub-processes such as creating customer records,
packing, shipping and creating the orders
o Ineffective order to cash results in human errors, high levels of
disputes and defecting customers
o Effective order to cash creates customer satisfaction and improves
speed.
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