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Chapter 2

BUSI 3040U Chapter 2: Chapter 2

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BUSI 3040U
Stephen Marsh

Chapter 2: Organizational Strategy, Competitive Advantage, and Information Systems Business process ongoing collection of related activities that create a product or a service of value to the organization, its business partners andor its customers Crossfunctional business process no single function area is responsible for its completion; multiple areas collaborate for procurement process and fulfillment o Each functional area must execute its specific process steps in a coordinated, collaborative way Business Process Reengineering and Business Process Management Executing business processes is the measure of competitive performance due to customer satisfaction, cost reduction, cycle and fulfillment time, quality, differentiation, and productivity Business process reengineering (BPR) radical redesign of a business process that improves its efficiency and effectiveness, often by beginning with a clean sheet Business process management (BPM) management technique that includes methods and tools to support the design, analysis, implementation, management, and optimization of business processes Business activity monitoring (BAM) real time measure and managing business processes; whether succeed or fail, it is valuable record of process behaviour that organizations can use to improve their processes Business Pressures Business environment combination of social, legal economic, physical, and political factors in which businesses conduct their operations Market Pressure generated by the global economy, intense competition, changing nature of the workforce and powerful customers o Globalization integration and interdependence of economic, social, cultural and ecological facets of life, enabled by rapid advances in information technology o Changing nature of the workforce diversified workforce; people working from home o Powerful customers consumer sophistication and expectations increase; as their knowledge increases Technology Pressures technological Innovation and Obsolescence new and improved technologies rapidly create or support substitutes for products, alternative service options and superb quality o Information Overload SocietalPoliticalLegal Pressures; Information Technology Support o Organizational social responsibility (individual social responsibility) efforts to solve various social problems o Facilities design and management, Carbon management, Intl and US state environmental laws, energy management, compliance with govt regulations, protecting against terrorist attacks, ethical issues o Digital divide gap between those who have access to information and communications technology and those who do not Organizational Responses Strategic systems advantages that enable them to increase their market shareprofits, to negotiate with suppliers and prevent competitors from entering their markets Customer focus difference between attracting and keeping customers and losing them to competitors Maketo Order and Mass Customizations EBusiness and ECommerce Competitive Advantage and Strategic Information Systems Competitive advantage advantage over competitors in some measure such as cost, quality, or speed; leads to control of a market and to largethanaverage profits Competitive strategy identifies a businesss approach to compete, its goals, and plans and policies that will be required to carry out desired outcomes when competitors want to prevent you from reaching your goals o Seek to outperform between measures of cost, quality, and time tomarket Strategic information systems (SISs) help organization gain a competitive advantage by supporting its strategic goals andor increasing performance and productivity o Any IS that helps gain competitive advantage or reduce competitive disadvantage qualifies as SISs Competitive forces model business framework devised by Michael Porter that analyzes competitiveness by recognizing five major forces that could endanger a companys position 1. The threat of entry of new competitors at industry peak, it is easy to enter the market o Entry barrier product or service feature that customers expect from organizations in a certain industry o An organization trying to enter this market must provide this product or service at a minimum to be able to compete 2. The bargaining power of suppliers suppliers power is high when buyers have few choices from who to buy
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