CHAPTER 2 (Business Pressures, Organizational Responses, and IT Support)
* The three types of business pressures faced are: market, technology, and societal pressures.
– TECHNOLOGY PRESSURES: Technological Innovation and Obsolescence Information Overload
– SOCIETAL/POLITICAN/LEGAL PRESSURES: Social Responsibility; Government Regulation and Deregulation; Protection Against Terrorist Attacks and Ethical Issues
– CUSTOMER FOCUS – is the difference between attracting and keeping customers by providing superb customer service to losing them to competitors.
– MAKE-TO-ORDER – is a strategy of producing customized products and services.
– MASS CUSTOMIZATION – is producing a large quantity of items, but customizing them to fit the desire of each customer.
* Reebok and Bodymetrics provide excellent examples of mass customization.
E-BUSINESS AND E-COMMERCE – Buying and selling products and services electronically.
* E-business is a broader concept than e-commerce.
– STRATEGIC INFORMATION SYSTEM (SIS)
– provide a competitive advantage by helping an organization to implement its strategic goals and to increase its performance and productivity.
(The best-known framework for analyzing competitiveness is Michael Porter’s competitive forces model (Porter, 1985))
* A BARRIER TO ENTRY is a product or service feature that customers expect from organizations in a certain industry.
(2) THE BARGAINING POWER OF SUPPLIERS – is high when buyers have few choices and low when buyers have many choices.
(3) The BARGAINING POWER OF BUYERS – is high when buyers have many choices and low when buyers have few choices.
(4) The THREAT OF SUBSTITUTE PRODUCTS OR SERVICES – is high when there are many substitutes for an organization’s products or services and low where there are few substitutes.
(5) The RIVALRY AMONG FIRMS IN AN INDUSTRY – is high when there is fierce competition and low when there is not.
– DIFFERENTIATION: I am better because I am different.
– INNOVATION: I am doing something new and you can’t catch up.
– OPERATIONAL EFFECTIVENESS: I can do the same thing more efficiently than you can.
– CUSTOMER ORIENTED: I treat my customers better than you do.
(which we will call ALIGNMENT)
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