Explain information technology’s role in business and describe how you measure success?
The role of information technology in business covers almost all of the aspects of business because of the changing market competition becomes stronger and information technology can bring the edge a business needs to succeed.
Information technology gathers data and creates model to aid in decision making
Because of different location in business information technology can help in gathering data from different locations and making them available to everyone who needs them in the business
—Microsoft Excel program is a good example this program can store informations and calculate the information to acquire informtion needed in the business.
information technology can also provide the business Real time data such as financial transactions one example is the Real time gross settlement which is used by the banks to settle financial obligations
List and describe each of the forces in Porter’s Five Forces Model?
Porters Five forces model is business strategy develop by Michael Porter from Harvard that focuses on five forces which determine the atractiveness and competitiveness of the market.
Potential Entrants
Markets with high profits will attract new companies this will result in competition which will eventually lower the companies profit margin.
This effect can be controlled if we apply the following strategies
- Establish strong customer loyalty
- Patent to products to protect it from competition
- Improve the distribution of products
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Buyer Powers
The Buyer power of customers refers to the ability of the buyer to pressure the company to affect the prices of the services and goods it offers
- Strengthen the distribution channels
- Analyse pricing
- Bargaining leverage
Supplier Powers
The bargaining power of suppliers depend on the price of raw materials needed to create the product or the services
- Presence of substitute suppliers
- Alternative products
- Supplier Competition
Competitive Rivalry
Strong rivalry determines the competitiveness of an industry
- Product Innovation
- Competitve Strategy
- Advertising Strategy
Describe the relationship between Business process and value chains?
Business process is a sequence of activities which in the end produces a product or services for a customer, value chains are distince activities either technological or economical which in the end also produces the desired service or product. business process is the flowchart of activities while the value chain is the actual process.
Compare Porters three Generic Strategies?
Cost Leadership Strategy
This strategy focuses on having the lowest prices on the market this targets clients who are price sensitive.
- This can be achieve by applying different type of approach one is having a high asset turnover a bus picking up and dropping passenger of
- Another approach is by offering products in a uniformed way this will lower production cost because less raw materials are needed
- The last approach is by controlling the suppliers this approach helps us get the minimum prices for the raw materials needed to produce the product
Differentation Strategy
By creating products which are specialised for a certain group of people this will create success once a good product is produce this strategy is for a target market which is not price sensitive.
- BMW
- Lacoste
- CK
Segmentation Strategy
By Segmenting the market special products can be form to target specific groups of people one good example is jetstar which targets people who prefer to pay less to get to the destination they want.
Reference list
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