CHAPTER 2: IDENTIFYING COMPETITIVE ADVANTAGES

A business strategy is a leadership plan that achieves a specific set ao goals or objectives.


COMPETITIVE ADVANTAGE 
   A feature of a product or service on which customers place a greater value thansimilar offerings from a competitor.

FIRST-MOVER ADVANTAGE
   Occur when an organization can significantly impact its market share by being first to market with a competitive advantage.

COMPETITIVE INTELLIGENCE (ENVIRONTMENTAL SCANNING)
   The process of gathering information about the competitive environment, including copetitor's plans, activities, and products to improve a company's ability to succeed


There are THREE COMMON TOOLS which are:

• Porter's Five Forces Model
• Porter's Three Generic Strategies 
• Value Chains 

    

The Five Force Model

Porter’s Five Forces Model determines the relative attractiveness of an industry.

 BUYER POWER

 The ability of buyer they must pay for an item.

Buyer power is High when buyers have many choices of whom to buy from and low when their choices are. Low when their choices are few.

Two ways to reduce boyer power:

LOYALTY PROGRAM- reward customers based on the amount of businesss they do with a particular organization.

SWITCHING COST- costs that can make customers reluctant to switch to onether product or service,

  SUPPLIER POWER

 Suppllier ower is High when buyers have few choices of whom to buy from and low when their choices are many and Low when their choices are many 

Supply chain – consists of all parties involved in the procurement of a product or raw material

    TREAT OF SUBSTITUTE PRODUCTS OR SERVICES

 Treat of sabtitute product ir servicrs is High when there are many alternatives to a product or service and Low when there are few alternatives from which to choose

     

    TREAT OF NEW ENTRANTS

 Treat 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 entering a market

      

  RIVALRY AMONG EXISTING COMPETITORS 

    Rivalry among existing competitors is High when competition is fierce in a market and Low when competition is more complacent.

The Three Generics Strategies 

       COST LEADERSHIP

 Becoming a low - cost producer in the industry allows the company to lower prices to customers

 Competitors with higher costs cannot afford to compete with the low-cost leader on price

        DIFfRENTIATION

  Create competitive advantage by distinguishing their products on one or more features important to their customers

 Unique features or benefits may justify price differences or stimulate demand

        FOCUS STRATEGY

  Target to a niche market

 Concentrates on either cost leadership or differentiation

Relationships Between Business Process and Value Chain 

      

         The Value Chains - Targeting Business Process 

 Supply Chain - a chain or series of processes that adds value to product & service for customer

 Add value to its products and services that support a profit margin for the firm

       

        

         

CHAPTER 1: BUSINESS DRIVEN TECHNOLOGY

IFORMATION TECHNOLOGY ( IT )- A field concern with the use of technology in managing and processing information. Information technology is an important enabler of businesss success and innovation

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MANAGEMENT INFORMATION SYSTEM ( MIS )- business function and academic discipline covering the application of people, technologies, and procedures to solve business problems

Student who understand business along with the power associated with the information age will create their own opportunities even new industry.

The core drivers of the information age are:

• DATA
• INFORMATION TECHNOLOGY
• BUSINESS INTELLIGENCE
• KNOWLEDGE

DATA

Raw fact that describe the characteristic of an event

Example: Amount sold, Customer number, Quantity ordered, Order date

INFORMATION

Data converted into a meaningful and useful context

Example: best-selling product, best customer, worst selling product, worst customer

BUSINESS INTELLIGENCE

Information collected from multiple sources that analyze pattern, trends, and relationships for strategic decision making.

Example: Lowest sales per week compared with the economic interest rate, Best selling product by month compared to sport season and city wins and losses.

KNOWLWDGE

The skills, experience, and expertise, coupled with information and intelligence, that creates a person’s intellectual resources.

Example: Listing product that are about to expire first to expire first on the menu or creating them as a daily special to move the product.

Each department performs its own activities. Although each department has its own focus and data, none can work independently if company is to operate as a whole. It is easy to see how a business decision made by one department can affect other departments. For to be successful, all departments must work together as a single unit sharing common information and not operate independently.

IT RESOURCES- People use information technology to work with information.

IT CULTURES

INFORMATION FUNTIONAL CULTURE

·                  Employees use information as a means of exercising influence or power over others.

·                  Example: a manager in sales refuses to share information with makerting. This causes marketing to need the sales manager’s input each time a new sales strategy is developed.

INFORMATION SHARING CULTURE

          Employees across departments trust each other to use information especially about problem and failures to improve performance.

INFORMATION INQUIRING CULTURE

         Employees across departments search for better understand the future and align themselves with  current trends and new direction.

INFORMATION DISCOVERY CULTURE 

      Employees across departments are open to new insights about crisis and radical changes and seeK ways to create competitive advantage

INTRODUCTION

Information technology is a modern phenomenon that has dramatically changed the daily lives of individuals and businesses throughout the world. Information technology is driven by the microchip, which owes its existence to the semi-conductor. IT solutions run the gamut from personal computers and computer software to production robotics to communications technology. Leveraging information technology for business success is key to survival in the modern business world. Information technology has grown to permeate the business world, affecting how companies make and market their products, as well as how people communicate and accomplish their jobs in modern organizations. Specialized software shapes best-practices and industry standards, continually changing the face of business in almost every way.