CHAPTER 2 Identify Competitive Advantages

1.Learning Outcomes

1.1  Explain why competitive advantages are typically temporary.

1.2  List and describe each of the five forces in Porter's Five Forces Model.

1.3  Compare Porter's three generic strategies.

1.4  describe the relationship business processes and value chains.

2. Identifying Competitive Advantages

2.1  To survive and thrive an organization must create a competitive advantage.

  >  Competitive advantages - a product or service that an organization's customers place a greater value on than similar offerings from a competitor.
Example : Dell Computers : the product and service is directly delivery  to the front your door.
  >  First-mover advantage - occurs when an organization can significantly impact itsmaeket share by being first to market with a competitive advantages.
Example : Air Asia the first airplane offer low cost ticket and everyone can fly.

2.2  Organizations watch their competitive through environmental scanning.

  > Environment scanning - the acquisition and analysis if events and treads in the environment external to an organization.

2.3  Three common tools used in industry to analyze an d develop competitve advantages include:

• Porter's  Five Forces Model
• Porter's three generic strategies
• value chains

3. The Five Forces Model Evaluating Business Segments

3.1 Buyer Power- 

• High - when buyers have many choices of whom to buy
• Low - when their choise are few
• To reduce buyer power (and ceate competitive advantage). an organization must take it more attractive to buy from the company not from the competitors.

 Loyalty Program - reward customers based on the amount of business they do with a particular organization.

Example : used loyalty programs (Jusco card, Tesco card, being a members to get the discount)

Switching Costs - cost that can make customers reluctant to switch to another product or service

3.2 Supplier Power

• High – when buyers have few choices of whom to buy from
• Low – when their choices are many
• Best practices of IT to create competitive advantage
• Business-to-Business (B2B) marketplace

Example : Private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid. 

Reverse auction is an auction format in which increasingly lower bid

Supply chain - consist of all parties involved in the procurement of a product or raw material

3.3  Threat of Substitute Products or Services

• High – when there are many alternatives to a product or service
• Low – when there are few alternatives from which to choose
• Customers can reluctant to switch to another product or service
• To the extent that customers can use different products to fulfill the same need, the threat of substitutes exists
• Example : Electronic product - same functions different brands

3.4 Threat of New Entrants

• High - when it is easy for new competitors to entry a market
• Low - when there are significant entry barriers to entering a market
• Example : Astro and Air Asia

Entry barrier - a product or service feature that customers have come to expect from organization in a particular industry. Must be offerd by an entering organization to compete and survive.

3.5 Rivalry Among Existing Competitors

• High – when competition is fierce in a market
• Low – when competition is more complacent
• Need to know how to create best selling in industry
• Example : Maxis, Celcom, Digi have a new competitive like Umobile.

Competitive is always more intense in some industries than in others, the overall trend is toward increased competitive is just about every industry.

4. The Three Generic Strategies

4.1 Organizations typically follow one of Porter's three generic strategies when entering a new market.

   > Cost leadership with a broad market

    Example : Tesco, Mydin, Giants

   > Differentiation the product must be unique 

   > High cost

    Example : Pavilion, JPO, Mitsui

5. Value Creation

5.1  Once an organization choose its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategy.

  > Business process - a standardized set of activities that accomplish a specific task.

  > Value chain - views an organization as a series of processes, each of which adds value to the product or service for each customer

^ Primary activities too know as business process

^ First we must know what our type company business

^ Need to create competitive advantages

 5.2  Customers determine the extent to which each activity adds value to the product or service

        

The competitive advantage is to :

• Target high value-adding activities to further enhance their value
• Target low value-adding activities to increase their value
• perform some combination of the two

Value chain with Porter's Five Forces :

okay that all of chapter 2. Thank you for reading ^_^

CHAPTER 1 Business Driven Technology

1.Learning Outcomes.

1.1  Compare management information system (MIS) and information technology.

1.2  Describe the relationship between people, information technology and information.

1.3  Identify four different department in a typical business and explain how technology help them to        work together.

2.Information technology's role in business :

• Information technology is everywhere in business.

• Understanding information technology provides great 

          insight to anyone learning about business.

                                                                                                             

3.Information technology's Impact on Business Operations :

• *  Organizations typically operate by functional areas or functional silos.

• *  Functional areas are interdependent.

        

4.Information Technology Basics :

4.1 > Information Technology (IT) - A field concerned with the use of technology in managing and processing information.

> Information technology is an important enabler of business success and innovation.

4.2 >Management Information Systems (MIS) - A general name for the business function and academic discipline covering the application of people, technologies, and procedures to solve business problems.

>MIS is a business function, similar to Accounting, Finance, Operations and Human Resources.

When beginning to learn about information technology it is important to understand.

--  Data, information and business intelligence.

--  IT resources.

--  IT cultures.

5.Data, Information and Business Intelligence :

5.1 Data - Raw facts that describe the characteristic of an event.

example : 

Data recording in sale events in an Excel Spreadsheet

5.2 Information - Data converted into a meaningful and

                         useful context.

                      - Combine all data.

5.3 Business Intelligence - Applications and technologies that are used to support decision-                       making efforts.

Information turned into business intelligent 

6. IT Resources :

•  Information technology to work with.
• People use.

example:  Microsoft Exchange, and Solaris.

7. IT Cultures :

Have 4 organizational information cultures :-

  >Information function culture.

  >Information sharing culture.

  >Information inquiring culture.

  >Information discovery culture.

7.1 Information-Function Culture

• Use information as a means of exercising influence or power over other.
• this about who to produce the product.
• how much the price.

example : A manager in sales refuse to share information with marketing.

                 Need the sales manager's input each time a new sales strategy is developed.

7.2 Information-Sharing Culture

• Across department must trust each other to use information.
• For improve performance.
• Especially about problems and failures.

7.3 Information-Inquiring Culture

• Across department search for information.
• To become better understand the future.
• Align themselves with current trends and new directions.

7.4 Information-Discovery Culture

• Across department are open to new insights about crisis and radical changes.
• Find new activities.
• Seek way to create competitive advantages with other.

ABOUT ME ^_^

 ASSALAMUALAIKUM  

          Firstly nak bagitahu this is my second account. Yang   first dulu dah terkubur rasaya sebab dah lama tinggalkan dunia  blogger ni. Dulu boleh tahan la  active juga. ngehngeh... okay let me introduce my self nama    yang dianugerahkan Nafisha Binti Miskiman. sesiapa yang baca blog ni boleh panggil Fisha je. Umur sekarang    dah meningkat 19 dah. Next year no more belas-belas. kira puluh-puluh pula.   Hahaha.. Asal diri dari    Kampung Bukit Kapar, Klang Selangor. Ada 6 orang   adik-beradik and i'm a      youngest one. 3 putera and 3   puteri of course     including me ;). Ayah dah   pencen lama.banyak masa   berahat berbanding dulu. Mak pula suri     rumah sepenuh masa.   i'm still study now in     semester 3 on my Diploma Business Management (BM111) at UITM Alor Gajah, Melaka. create   this blog  untuk my assignment       for subject Information   Technology (MGT300). okays kepada sesiapa yang   nak tahu lebih   lanjut tentang   this subject boleh la ikuti my blog   ni ye. Hopefully boleh lulus       dengan cemerlang untuk subject ini       dan subject yang lain juga. 

In Syaa Allah.. Ameen..