Chapter 2
Q1. What is the difference between an 'application' and a computer-based information system?
The difference between an ‘application’ and a ‘computer-based information system’ is that the application program is a computer program assembled to maintain a specific task or business process whereas a computer-based information system uses computer technology to perform some of its intended tasks.
Q2. What are strategic information systems?
An information system involves the combination of the following components:
-Hardware
-Software
-Databases
-Networks (both internal and external)
-Procedures
-People
Q3. According to Porter, what are the five forces that could endanger a firm’s position in its industry or marketplaces?
(1) The threat of entry of new competitors: this threat is high when it is easy to enter the market and low when barriers of entry exist.
(2) The bargaining power of suppliers: supplier power is high when there a few choices for buyers to buy from, and low when buyers have many choices.
(3) The bargaining power of customers (buyers): buyer power is high when buyers have many choices from whom to buy and low when buyers have only a few choices.
(4) The danger of substitute products or services: when there are many substitutes for an organization’s products or services the threat of substitutes is high.
(5) The rivalry among existing firms in the industry: threat from rivalry is high when there is intense competition among many firms in an industry.
Q4. In relation to Porter's value chain model, what is meant by primary activities and support activities, and how does IT support these activities?
Primary activities are business activities that are associated with the construction and allocation of the firm’s products and services which create value that customers are willing to pay for.
These are narrowed down into 5 primary activities:
Q4. In relation to Porter's value chain model, what is meant by primary activities and support activities, and how does IT support these activities?
Primary activities are business activities that are associated with the construction and allocation of the firm’s products and services which create value that customers are willing to pay for.
These are narrowed down into 5 primary activities:
-Inbound logistics (inputs)
-Operations (manufacturing and testing)
-Outbound logistics (storage and distribution)
-Marketing and Sales
-Services
Support activities are separate to primary activities as they do not add value directly to the firm’s products or services but contribute to the firm’s competitive advantage by assisting and supporting these support activities.
Support activities consist of:
Support activities consist of:
-The firm’s infrastructure (accounting, finance, management)
-Human resources management
-Product and technology development
-Procurement
Q5. Discuss the logic of building information systems in accordance with the organizational hierarchical structure.
In accordance with the organizational structure, the logic of building information systems is to facilitate the business collect, process, store, analyse and disseminate information in volume with high speed. With the use of the information system, businesses are able to communicate and collaborate amongst other organizations, permitting them to a large source of available information which assists their work in a worldwide setting.
Q6. How has the Internet affected each of the five forces in Porter’s competitive forces model?
The internet has fundamentally influenced the nature of competition. In reference to Porter’s competitive force model the internet has increased competition; which has a negative impact on profitability.
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