Week 2: Chapter 2

Question 1. What is the difference between an 'application' and a computer-based information systems?

An application program is a computer program designed to support a specific task or business process whereas a computer-based information system (CBIS) is an information system that uses computer technology to perform some or all of its intended tasks.

Question 2. What are strategic information systems?

Strategic information systems (SISs) are systems that help an organisation gain a competitive advantage by supporting its strategic goals and/or increasing performance and productivity.

Question 3. According to Porter, what are the five forces that could endanger a firm’s position in its industry or marketplaces?

The threat of entry of new competitors, the bargaining power of suppliers, the bargaining power of customers, the threat or substitute products or services and the rivalry among existing firms in the industry.

Question 4. In relation to Porter's value chain model, what is meant by primary activities and support activities, and how does IT support these activities?

Primary activities are those business activities related to the production and distribution of the firm’s products and services, thus creating value. Support activities are business activities that do not add value directly to a firm’s product or services under consideration but support the primary activities that do add value.

Question 5. Discuss the logic of building information systems in accordance with the organizational hierarchical structure.

Information systems will vary according to the each functional and specific area of an organisation. Certain information systems support parts of organisations, others support entire organisations. Each information system supports a particular functional area in the organsation. Examples inclde accounting IS, finance IS, production/operations management (POM) IS, marketing IS, and human resource IS.


Question 6. How has the Internet affected each of the five forces in Porter’s competitive forces model.

1. The threat of new competitors: the web increases the threat that new competitors will enter the market by sharply reducing traditional barriers to entry, such as the need for a sales force or a physical storefront to sell goods and service.
2. The bargaining power of suppliers: The Intenet's impact on suppliers is mixed. One the one hand, buyers can find alternative suppliers and compare prices more easily, reducing the supplier's barganing power. On the other hand, as companies use the Internet tp integrate their supply chains, participating suppliers prosper by locking in customers.
3. The bargaining power of customers: The Web significantly increases buyer's access to information about products and suppliers. Internet technologies can reduce customer's switching costs of a decision to buy elsewhere.
4. The threat of substitute products and services: New technologies can substiture products ver rapidly. Information-based industries are in the greates danger from substitutes. Any industry in which digitized information can replace material goods (eg: music, books, software) must view the Internet as a threat because the Internet can conver this information efficiently and at low cost.
5. The rivalry among existing firms in the industry: The threat from rovalry is high when there is intense competition among many firms in an industry. The threat is low when competition is among few firms and less intense.