Presentation on theme: "CHAPTER 2 IDENTIFYING COMPETITIVE ADVANTAGES CIS 429: Business Information Systems."— Presentation transcript:
CHAPTER 2 IDENTIFYING COMPETITIVE ADVANTAGES CIS 429: Business Information Systems
Identifying Competitive Advantages Competitive advantage: A product or _________that is more valuable than a similar product of service of a competitor. First-mover advantage: Improving market ______ by being first with a competitive advantage. Environmental scanning: Acquisition and _________ of information from the environment external to the organization.
Porter’s Five Forces Model The Five Forces model helps determine the attractiveness of an industry: Buyer power: ______ when buyers have many choices. Buyer power can be reduced through loyalty programs, enabled by IT. Supplier power: _____ when buyers have few choices. A supply chain consists of all parties involved in material procurement. A B2B marketplace is an __________-based service that brings many buyers and sellers together. A private exchange is a B2B marketplace where one buyer posts its needs and opens the bidding to any supplier. A ________ auction is where suppliers bid lower and lower.
Porter’s Five Forces Model (cont’d) Threat of substitutes High when there are many alternatives to a product or service. Switching cost is the cost to switch to an alternative. Threat of new entrants High when it is easy for new _____________ to enter a market An entry _________ is an expected product or service feature that must be offered. Rivalry among competitors High when competition is fierce in a market.
Three Generic Strategies Broad cost leadership Large market segment Broad differentiation Large market segment Focused strategy _______ market Cost leadership or Differentiation Compare Hyundai, Audi, Kia, Hummer in terms of these strategies.
Value Creation Business process Standardized set of activities to complete a task Value chain Series of processes, each adding ______ to the product or service The goal is to create more value than your competitors. Value chain _________ Customers can be surveyed to find out what they value. IT can support the value chain.