301 CONCEPTUAL REVIEW

Sustainable Competitive Advantage

Financial performance that consistently outperforms industry averages

Operational Effectiveness

performing the same tasks better than rivals perform them

Fast follower exists when:

-savvy rivals watch a pioneer’s efforts

-learn from their successes and missteps

-quickly enters market with a comparable/superior product at a lower cost

-before first move can dominate

Strategic positioning

performing different tasks than rivals or same tasks in a different way

straddling

when a firm attempts to math the benefits of a success position while maintaining its existing position

true sustainable advantage comes from assets and business models that are simultaneously

-resource-based theory

-valuable

-rare

-difficult to imitate

-no substitutes

Imitation resistant value chains

others find hard to replicate

brand

proxy for quality and inspires trust

scale

advantages related to size, economies of scale

switching costs and data

costs consumer incur by switching providers

differentiation

be different, move away from being commoditized

network effects

when the value of a product or service increases as its number of users expands

distribution channels

the path through which products or services get to customers

patents

x

Technology’s role

key role in creating/reinforcing assets for sustainable advantage

Technology benefits

-enabling an imitation resistant value chain

-strengthening firm’s brand

-collecting useful data

-establishing switching costs

-creating network effect

-creating/enhancing firm’s scale advantage

-enabling product/service differentiation

-offering opportunities to leverage unique distribution channels

value chain model (vcm)

• identifies areas where information systems can enhance its competitive position

• views firm as series of basic activities that add a margin of value to firm’s product/services

• primary activities

  • directly related to prod/distrub.

• support activities

  • support delivery of primary

• linked to value chain of suppliers, distributers, and customers

vcm: opportunities for info systems

• used to improve operational efficiency

• lower costs + improve profit margins

• CRM: forge closer rel, w customer

  • SCM: suppliers

• track benchmarks

• identify best industry practices

• devise a list of candidate applications for info systems

value web

• collection of independent firms that use into tech to coordinate value chains to produce product/service

• customer driven!!!

• operates in a less-linear fashion than traditional value chain

• synchronizes business processes of customers, suppliers, and partners between diff. companies in industries

value web: opportunities for info systems

• used in supply/demand

• relationships can be bundled/unbundled in response to changing market conditions

• firms can accelerate time to market and to customers by optimizing value web

  • make quick decisions on who delivers products/services w right price + location

• info systems make it possible for companies to establish and operate value webs

internet’s influence on comp. forces and comp. advantage

• destroyed/severely threatened industries

• created new markets/products/business models

• competitive rivalry intensified

  • price wars

  • new comp entering market

• increases bargaining power of buyers

  • who can find lowest cost provider

Business firm levels - Senior

• needs highly summarized info on overall performance (gross revenue, sales by product group/region, profitability, overall performance)

• Info system type: executive support systems

Business firm levels - Middle

• specific info (diff dept, sales contacts. production stats, employment levels/costs, sales revenues)

• Knowledge workers (engineers. scientists. etc) design products or services that create new knowledge for the firm

• Info system type: Decision-support systems and management info sys

Business firm levels - Operational

• transaction-level info

  • number of inventory, hours logged by employees, etc

• produce product, delivers service

  • production workers need access to product machine info

  • service workers need customer records access to assist customers

• Info system type: Transaction processing

Porters Five Forces (RESBS)

1. Rivalry among existing competitors

2. Threat of new entrants

3. Threat of substitutes

4. Bargaining power of buyers

5. Bargaining power of suppliers

Rivalry - tech influence

• Internet intensified competition (ex. music retailers—brick-and-mortar + online rivals; Amazon’s scale vs. straddled incumbents).

New Entrants - tech influence

• Lower entry barriers (apps/websites launch quickly), but survival depends on building defensible resources.

Substitutes - tech influence

• Digital music vs. CDs, streaming vs. downloads; convenience > sound quality

• GenAI (ChatGPT) threatens Q&A, search, even news industries.

Buyer Power - tech influence

• Increased by price transparency (easy comparison online)

• Consumers demand lower prices, more convenience.

Supplier Power - tech influence

• Strengthened when offerings are differentiated or network effects apply (eBay for antiques, Apple App Store, Uber drivers)

• Switching costs (ex. online bill pay at Wells Fargo) reduce buyer power

Transaction Processing System (TPS)

Information Inputs: Transactions, daily events

Information Outputs: Detailed reports, lists, summaries

Users: operations personnel, first-line supervisors

Management Information System (MIS)

Information Inputs: Summarize transaction data, high-volume data, simple models

Information Outputs: Summary and exception reports

Users: Middle managers

Decision Support System (DSS)

Information Inputs: Data analytics, models + tools

Information Outputs: Interactive, simulations, analysis

Users: Professionals, staff managers

Executive Support Systems (ESS)

Inputs: Aggregate data, external, internal

Outputs: Projections responses to queries

Users: Senior managers