MIS 3305 Chapter 2 – Flashcards
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business strategy
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a leadership plan that achieves a specific set of goals or objectives as displayed. ex: developing new products or services, entering new markets, increasing customer loyalty, attracting new customers, increasing sales.
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competitive advantage
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is a feature of a product or service on which customers place a greater value than they do on similar offerings from competitors. typically temporary.
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first-mover advantage
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occurs when a company can significantly increase its market share by being first with a new competitive advantage.
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competitive intelligence
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is the process of gathering information about the competitive environment, including competitors' plans, activities, and products, to improve a company's ability to succeed.
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competitive intelligence
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porter's five forces model porter's three generic strategies porter's value chain analysis
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pressures that can hurt potential sales
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-knowledgeable customers can force down prices by pitting rivals against each other. -influential suppliers can drive down profits by charging higher prices for suppliers. -competition can steal customers. -new market entrants can steal potential investment capital. - substitute products can steal customers.
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Porter's Five Forces Model
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analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability
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buyer power
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the ability of buyers to affect the price of an item.
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switching cost
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manipulating costs that make customers reluctant to switch to another product
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loyalty program
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rewards customers based on the amount of business they do with a particular organization.
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supply chain
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consists of all parties involved, directly or indirectly, in obtaining raw materials or a product.
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supplier power
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is the suppliers' ability to influence the prices they charge for supplies.
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supplier can influence the industry by:
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charging higher prices limiting quality or services shifting costs to industry participants
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threat of substitute products or services
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high when there are many alternatives to a product or service and low when there are few alternatives. ex: Google and Time Warner Cable
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threat of new entrants
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high when it is easy for new competitors to enter a market and low when there are significant entry barriers. example of low entry: restaurants, pawnshops, cutting grass, airlines
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entry barrier
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a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.
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rivalry among existing competitors
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high when competition is fierce in a market and low when competitors are more complacent. ex: grocery industry is intensively competitive
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product differentiation
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occurs when a company develops unique differences in its products or services with the intent to influence demand. ex: Amazon has reduced its rivals' power by offering its customers a differentiated service. Customer Profiling.
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three generic business strategies for entering a new market:
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1. broad cost leadership 2. broad differentiation 3. focused strategy **broad strategies reach a large market segment, while focused strategies target a niche or unique market with either cost leadership or differentiation. only adopt one**
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broad market and low cost
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walmart
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broad market and high cost
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neiman marcus
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narrow market and low cost
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payless shoes
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narrow market and high cost
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tiffany & co.
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business process
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is a standardized set of activities that accomplish a specific task, such as processing a customer's order.
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value chain analysis
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views a firm as a series of business processes that each add value to the product or service. add value to customer!!
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primary value activities
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acquire raw materials and manufacture, deliver, market, sell, and provide after-sales services.
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inbound logistics
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acquires raw materials and resources and distributes to manufacturing as required.
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operations
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transforms raw materials or inputs into goods and services.
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outbound logistics
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distributes goods and services to customers.
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marketing and sales
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promotes, prices, and sells products to customers.
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service
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provides customer support after the sale of goods and services.
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support value activities
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firm infrastructure, human resources management, technology development, and procurement,
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firm infrastructure
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includes the company format or departmental structures, environment, and systems.
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human resource management
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provides employee training, hiring, and compensation
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technology development
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applies MIS to processes to add value.
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procurement
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purchases inputs such as raw materials, resources, equipment, and supplies.
