IS 2000 Chapter 1

5 Forces Model

One model used to assess an industry structure is Porter’s ___. According to this model, five competitive forces determine industry profit ability: threat of substitutes, threat of new entrants, existing rivals, bargaining power of suppliers, and bargaining power of customers.

Competitive Strategy

An organization responds to the structure of its industry by choosing a _____

abstract reasoning

the ability to make and manipulate models. An abstraction is a simplification of an object; it is an idea, model, or concept that can then be manipulated with a logical or reasonable thought process.

Systems thinking

the ability to see the whole, not just the parts; it is the ability to model the components of the system and to connect the inputs and outputs among those components into a sensible whole, one that explains the phenomenon observed.

Categorical Imperative

the principle that one should behave only in a way that one would want the behavior to be a universal law

Barriers to entry

factors that make it difficult for a new business to begin operating in an industry

Experimentation

making a careful and reasoned analysis of an opportunity, envisioning potential products or solutions or applications of technology, and then devel oping those ideas that seem to have the most promise, consistent with the resources you have

Information age

where the production, distribution, and control of information are the primary drivers of the economy.

linkages

interactions across value activities

Management Information systems (MIS)

creating, monitoring, and adapting processes, information systems, and information to help organizations achieve their strategies

Margin

The difference between the value that an activity generates and the cost of the activity

Primary activity

drive competitive advantage. Raw materials are obtained using inbound logistics activity, products and goods are produced in operations/manufacturing activity, and those products and goods are shipped to customers using outbound logistics activity

Value

the amount of money that a customer is willing to pay for a resource, product, or service

Value chain

a network of value-creating activities. According to Porter, that generic chain consists of five primary activities and four support activities.

Support Activities

The _____ in the generic value chain contribute or facilitate the primary value chain activities. They include procurement, technology, human resources, and firm infrastructure.

Substitute

performs the same or similar function as an industry’s product by another means

Moore’s Law

that because of technology improvements in electronic chip design and manufacturing, “The number of transistors per square inch on an integrated chip doubles every 18 months.”