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Chapter 3

BUS 237 Chapter Notes - Chapter 3: Groupon, Competitive Advantage, Disruptive Innovation

Business Administration
Course Code
BUS 237
Zorana Svedic

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Chapter 3
Q1 – Why should I care about Productivity and Innovation?
Labour Productivity – ratio of GDP/paid hours
Productivity Paradox – “We see computers everywhere except in the productivity statistics”
3 ways value of IT can be realized
- Productivity – create more and/or better output from same input and create them
oIe: Automating tasks, add more customers, more up to date information
- Structure of competition – IT can alter the way corporations compete, forcing other
firms to follow suit and technical support provided
- Benefits to the end – Make processes more efficient and changes nature of
competition. Increased competition, reduction of costs associated with new
processes is passed onto final consumer
Organizations need to understand specifically what businesss value they are seeing and how IT
can secure it instead of “technology for technologies sake”
Q2 – What is Business Technology Management, and How is It related to Productivity and
Low productivity leads to looking closesly at ICT industry sector in Canada
- Important industry because it includes technologies that can enhance individual and
organizational productivity across many industries
- Indirectly supports activities in other industries with tools that make these other
industries more productive
- Primary driver of innovation and increased productivity
CCICT – Canadian Coalition for tommorow’s skills – Industry-led group to ensure ability of
Canadian organizations to hire ICT professionals
BTM – 2009, created new learning outcomes and drew on skills frameworks
- Designed for students who are inspired to use technology to innovate and improve
- Course topics include a wide range of topics, accounting, system analysis, marketing
Q3 – How do information systems improve productivity?
Companies organize work through business processes.
- Use resources, facilities, and information to accomplish activities
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- Important consideration for productivity
Productivity for an organization can be increased either through increased efficiency or more
effective business processes
Increasing efficiency – business processes can be accomplished either more quickly or with
fewer resources and/or facilities
- Doing things right, using just right amount of resources, facilities and information to
complete job
Increasing effectiveness, doing the right thigns
- Considers offering new or improved goods or services that the customer values
- Often requires companies to consider changing the business processes to deliver
something new and improved
Business Processes and Value Chains
Business processes are closely related to the concept of a value chain
Value chain – network of activities that improve the effectiveness (or value) of a good or service
- Made up of one and often many business processes
(Grab diagram pg 64)
Upstream value chain – basic or raw materials of a process, (coffe store growing own coffee)
are backwards integration or moving upsteam in value chain
Downstream value chain – Closer to customer end, (Diamond company cutting it’s diamonds
instead of selling raw stones), forward integration or moving upstream
More value a company adds to a good or service in it’s value chain, higher price company can
charge for final product
Margin – Difference between price the customer is wiling to pay and the cost the company
incurs in moving good through value chain
Two types of value activities that support value chain
Primary activities – value is added directly to the product, shipping raw materials, shipping
finished tires, installing tires
Support activities – support primary activities, Who pays workers, Who bought the machines at
the factory, Who maintains the machines?
- Only adds value indirectly
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find more resources at oneclass.com
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