16 Questions
What is one type of competitive advantage that involves having a powerful brand name and controlling customer demand?
Demand Control
What allows a company to increase its profit margins by keeping operating costs lower while expanding sales?
Economies of Scale
What type of competitive advantage does Microsoft have with its operating system and Office products?
Demand Control
What is the result of running operations at a more efficient scale than competitors?
Lower operating costs
What is a key benefit of having a powerful brand name?
Ability to keep prices high
What is the result of creating new, efficient production and service processes?
Higher customer satisfaction
What type of competitive advantage involves having a superior ability to implement new innovations?
Process Efficiency
What is one way to achieve a competitive advantage over competitors?
Creating new, efficient production and service processes
What is meant by 'competitive advantage' in the context of firms?
When a firm has access to special resources or uses resources more efficiently
Which company is considered a superior performer in the automotive industry?
Toyota
What is a characteristic of firms that have a competitive advantage?
They have access to special resources or use resources more efficiently
What is an example of 'barriers to entry that restrict supply'?
Having an exclusive contract with a Hollywood movie star
Which of the following is NOT a type of competitive advantage?
Financial Advantage
Which company is considered the leader in online retail?
Amazon
What is a characteristic of firms that 'do better' than others?
They have access to special resources or use resources more efficiently
How many types of competitive advantage are mentioned in the text?
4
Study Notes
Achieving Competitive Advantage with Information Systems
- Firms that perform better than others have a competitive advantage, which can be attributed to access to special resources or efficient use of commonly available resources due to superior knowledge and information assets.
Types of Competitive Advantage
- There are four major types of competitive advantage:
- Barriers to Entry That Restrict Supply: exclusive access to resources or markets, allowing for higher prices and restricted supply.
- Economies of Scale: operating at a more efficient scale, leading to lower operating costs and higher profit margins.
- Demand Control: having a powerful brand name and controlling customer demand, allowing for higher prices and increased profits.
- Process Efficiency: creating new, efficient production and service processes, leading to high customer satisfaction and competitive advantage.
Examples of Competitive Advantage
- Toyota in the automotive industry
- Amazon in online retail
- Apple's iTunes in online music, with over 75% of the downloaded music market
- Google in Web search
- Microsoft's operating system and Office personal productivity products, with about 95% of the world's one billion computers using them
Learn how to gain a competitive edge using information systems, including examples from top performers in various industries such as Toyota, Amazon, and Apple.
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