IST Chapter 2

In-Class Discussion

Chapter 2: Organizational Strategy, Competitive Advantage, and Information Systems

1. Consider the student registration business process at CSUSB, and describe how information technology is used in each step of the process (or is not used). Evaluate the process performance. Is it efficient? Is it effective? Why or why not?

2. Describe the five forces in Porter’s competitive forces model, and explain how the Internet has affected each one.

3. What does a flat world mean to you in your choice of a major? In your choice of a career? Will you have to be a “lifelong learner”? Why or why not?

Reply to the views of two questions.

Trisha Brook 

The term “flat world” refers to the globalization of business, and how opportunities are now widespread, compared to being geographically confined like they might have been a few decades ago. For my major in Business Management, I think this is a good thing. It allows me to connect with more diverse people and gain different perspectives on business. Business majors now have the opportunity to gain knowledge from across the globe compared to only learning the “American” way of business. The same goes for career opportunities. Due to advances in IT, I could now apply for jobs anywhere in the world and create effective teams even if I am not there in person.

I do think we will all have to be lifelong learners in the business arena. These advances in IT create opportunity, but only to those who keep up with the advances. If you do not learn new practices or new systems, you will surely fall behind the pack and become obsolete.

Alejandra Guerrero 

In a given industry, companies is always looking to be more competitive. These competitive companies utilize Porter's competitive forces model that recognizes five main forces that could ultimately increase their competitive edge or endanger their companies position in the competitive market if necessary actions are not properly taken. The five forces describes in this model are as follows: (1) the threat of entry of new competitors, (2) the bargaining power of suppliers, (3) the bargaining power of customers, (4) the threat of substitute products or services, and (5) the rivalry among existing firms in the industry. Ultimately, the ever increasing use of the internet has affected every one of these fundamental forces. For example, the internet ultimately makes it easier for new competitors to enter the market as there are less traditional entries barriers such as physical sales. Now people are able to sell products online through Etsy, eBay, etc. thus the threat increases where as otherwise high entry barriers would reduce this threat. Bargaining power of suppliers varies depending on the choices available to the buyers, with the internet, consumers are able to stream the web for a large number of alternatives thus reducing the suppliers bargaining power. At the same time, this increase in choices for the consumer due to the internet increases the bargaining power of customers. However, this power is reduce in loyalty programs where individuals will be more likely to purchase for a single company as a way to receive points or other benefits. For the threat of substitute products, the threat is high when consumers are exposed to many alternatives, which the new technology often creates. For example, students are able to purchase and/or view eBook versions of a text that they would otherwise be forced to go to a bookstore in order to obtain. Lastly, rivalry among existing firms is high when there is intense competition in a specific industry. The internet has affected this by making more information available to the consumers which reduces the firms advantage of holding propriety information making them less competitive. In addition, the internet is reducing the variable cost of products with the creation and distribution of digital products, therefore, costs will be cut and prices will drop for consumers making the company more competitive.