Explain information technology’s role in business and describe how you measure success?
Information Technology's (IT) allow business' to operate effectively and efficiently. It can provide to opportunity for transformation within a business, by taking a small scaled business and turning them into an online and/or large scaled success, however it can also provide challenges as well.
By using Information Technology's a business is able to access and connect to their customer's, employees, business partners and enterprises on a global scale. This allows them to become internationally recognised, which would boost their credibility and financial state.
Information Technology's enable employee's to better connect and work with each other along with others in different sectors of the company. Employee's are also able to benefit from Information Technologies better equipping them with programs and material that are better suited to their job. This results back to the business being able to operate efficiently and effectively.
The only measure that business' use to measure the amount of success lies within metrics. Metrics allows for a business' performance to be shown as a quantifiable source. These metrics include: Key performance indicators (KPIs), Efficiency and Effectiveness IT metrics and Benchmarking.
List and describe each of the forces in Porter’s Five Forces Model?
Buyer Power: This is where the buyers have many choices hence the buyer power is high, however if there are fewer choices then the buyer power is low.
Supplier Power: This is when the supplier raises prices the supplier power is high giving the buyer fewer choices making the buyer power low, however if the supplier lowers the prices the supplier power is low giving the buyer more choices making the buyer power high.
Threat of Substitute Products or Services: When there are many options to both the product or service the threat of substitute products or services is high, however if there are fewer options it is low.
Threat of New Entrants: When new competition enter's the marketplace easily the threat of new entrants is high, however if there is something stopping new competition entering the marketplace the threat of new entrants is low.
Rivalry Among Existing Competitors: Where there is extreme competition rivalry is high, however if the competition is at ease then rivalry is low.
Figure 1: Porters Five Forces Model
As shown above I have created a Five Forces Model to demonstrate the connection between the forces.
As shown above I have created a Five Forces Model to demonstrate the connection between the forces.
Describe the relationship between business processes and value chains?
A business process enables specific tasks to be completed by the participation in a list of set activities, whereas a value chain is used to assess and view a business's operational process, as well as view the product or service to which vale has been added for the customer.
Figure 2: A business value chain (Baltzan, 2010, p33)
Cost Leadership: Low in cost to maximise profitability, as well as provide a product that is available to a broader range market.
Differentiation: Higher in cost due to extra features or services that provide the product with a unique quality which is different from others on the market. This product is available to a larger market due to it possessing qualities which lower cost items do not have. This makes the product more appealing to a larger market regardless of the fact that it is higher in cost.
Focused: Can either be low in cost or high in cost depending on whether the focus is on cost leadership or differentiation. However this product will only appeal to a small market, as the product will be designed specifically with a certain group of people in mind.
Figure 3: A simplified table I put together to compare Cost Leadership, Differentiation and Focused Strategies
Reference's:
Baltzan, Phillips, Lynch, Blakey. Business Driven Information Systems. 1st Australian/New Zealand Edition. Mc Graw Hill. 2010.
Internet Center For Management and Business Administration, Inc. "Porter Generic Strategies" QuickMBA:Strategic Management, 1999-2010, http://www.quickmba.com/strategy/generic.shtml
