Podcast
Questions and Answers
What is the primary function of OnQ system at Hilton Hotels?
What is the primary function of OnQ system at Hilton Hotels?
What is the result of Hilton's implementation of OnQ system?
What is the result of Hilton's implementation of OnQ system?
What is a key factor that has changed the competitive landscape in the global market?
What is a key factor that has changed the competitive landscape in the global market?
What is the primary advantage of the Internet for small and medium-sized firms?
What is the primary advantage of the Internet for small and medium-sized firms?
Signup and view all the answers
What is the name of the largest and most widely used network?
What is the name of the largest and most widely used network?
Signup and view all the answers
What is the primary goal of using information systems to achieve competitive advantages?
What is the primary goal of using information systems to achieve competitive advantages?
Signup and view all the answers
What is the primary benefit of using OnQ system for profitable customers?
What is the primary benefit of using OnQ system for profitable customers?
Signup and view all the answers
What is the role of OnQ system in identifying customers?
What is the role of OnQ system in identifying customers?
Signup and view all the answers
What is the primary advantage of the Internet for large multinational corporations?
What is the primary advantage of the Internet for large multinational corporations?
Signup and view all the answers
What is the primary reason why OnQ system is used at Hilton Hotels?
What is the primary reason why OnQ system is used at Hilton Hotels?
Signup and view all the answers
Study Notes
Types of Competitive Advantage
- There are four major types of competitive advantage:
- Barriers to Entry That Restrict Supply
- Demand Control
- Economies of Scale
- Process Efficiency
Barriers to Entry That Restrict Supply
- Exclusive contracts or agreements can restrict supply and create a monopoly or near monopoly
- Examples: exclusive contracts with Hollywood movie stars or suppliers
Demand Control
- Powerful brand names and superior product qualities can control customer demand
- Examples: Microsoft's operating system and Office personal productivity products, with 95% market share
- Brand names and switching costs can keep prices high and increase profits
Economies of Scale
- Running operations at a more efficient scale can keep operating costs lower and increase profit margins
- Examples: running a plant 24 hours a day versus 8 hours a day
Process Efficiency
- Creating new, more efficient production and service processes can gain a competitive advantage
- Examples: high customer satisfaction, special expertise, or superior ability to implement new innovations
Porter's Competitive Forces Model
- Five forces that affect a firm's competitive advantage:
- Traditional Competitors
- New Market Entrants
- Substitute Products and Services
- Customers
- Suppliers
Porter's Competitive Forces Model (continued)
- Traditional Competitors: continuous competition and innovation
- New Market Entrants: new companies entering the market, with varying levels of difficulty
- Substitute Products and Services: alternatives to a firm's products or services, affecting pricing and profit margins
- Customers: attracting and retaining customers, with switching costs and power
- Suppliers: negotiating with suppliers, with multiple suppliers providing control and leverage
Information System Strategies for Dealing with Competitive Forces
- Four generic strategies to counteract competitive forces:
- Low-Cost Leadership
- Product Differentiation
- Focus on Market Niche
- Strengthening Customer and Supplier Intimacy
Low-Cost Leadership
- Using IS to achieve the lowest operational costs and prices
- Examples: inventory control systems, HR systems, purchasing systems, and production systems
Product Differentiation
- Using IS to enable new products and services, and make them differentiated
- Examples: Google's continuous innovation, Apple's iPod and online music service, and Spacestore.com's NASA space theme products
The Internet's Impact on Competitive Advantage
- The Internet has reduced the costs of operating on a global scale, creating opportunities for large and small firms
- Competing on a global scale is now possible for small and medium-sized firms
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
This quiz explores how Information Systems contribute to achieving competitive advantages in businesses, including the role of Michael Porter's competitive forces model.
