CTS 115: Chap 1 & 2

Operations Management

(also called Production Management) the management of systems or processes that convert or transform resources into goods or services.

Information Technology

A field concerned with the use of technology in managing and processing information. It can deal with the use of electronic computers and computer software to convert, store, protect, process, transmit and retrieve information securely.

Management Information Systems

A general name for the business function and academic discipline covering the application of people, technologies and procedures - collectively called information systems - to solve business problems.

Entry Barrier

A product or service feature that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and survive

Competitive Advantage

A product or service that an organization's customers place a greater value on than similar offerings from a competitor.

Business Process

A standardized set of activities that accomplish a specified task

Buyer Power

Assessed by analyzing the ability of buyers to directly impact the price they are willing tipsy for an item.

Supplier Power

Assessed by the suppliers' ability to directly impact the price they are charging for supplies ( including materials, labor and services).

3 Generic Strategies

Broad Cost Leadership Broad Differentiation Focused Strategy

The Five Forces Model

Buyer Power Supplier Power Threat of Substitute Products or Services Threat of New Entrants Rivalry Among Existing Competitors

Supply Chain

Consists of all parties involved, directly or indirectly, in the procurement of a product or raw material

Switching Costs

Costs that can make customers reluctant to switch to another product or service

Information

Data converted into a meaningful and useful context.

Finance

Deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilities.

Information-discovery Culture

Employees across departments are open to new insights about crises and radical changes and seek ways to create competitive advantages.

Information-inquiring Culture

Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

Information-sharing Culture

Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

Information-functional Culture

Employees use information as a means of exercising influence or power over others.

Rivalry Among Existing Competitors

High when competition is fierce in a market and low when competition is more complacent

Threat of New Entrants

High when it is easy for new competitors to enter a market and low when there is significant entry barriers to entering a market

Threat of Substitute Products or Services

High when there are many alternatives to a product or device and low when there are few alternatives from which to choose

Human Resources

Includes the policies, plans and procedures for the effective management of employees.

Four Common IT Cultures

Information-functional Information-sharing Information-inquiring Information-discovery

Factors Used to Assess Buyer Power

Number of Customers Size of Orders Differences between Competitors Sensitivity of Price Availability of Substitute Products

Factors Used to Assess Supplier Power

Number of Suppliers Size of Suppliers Uniqueness of Services Availability of Substitute Products

Product Differentiation

Occurs when a company develops unique differences in it's products with the intent to influence demand (used to reduce rivalry)

First-Mover Advantage

Occurs when an organization can significantly impact it's market share by being first to market with a competitive advantage.

Accounting

Provides quantitative information about the finances of the business including recording, measuring and describing financial information.

Data

Raw facts that describe the characteristics of an event.

Business Intelligence

Refers to applications and technologies that are used to gather, provide access to, and analyze data and information to support decision-making efforts.

Loyalty Program

Reward customers based on the amount of business they do with a particular organization

Ways to Reduce Buyer Power

Switching costs Expand & improve services so it's harder for customers to leave

Competitive Advantage Decision

Target high value-adding activities to further enhance their value, target low value-adding activities to increase their value, or perform some combination of the two.

3 Common Tools to analyze and develop competitive advantages

The Five Forces Model The Three Generic Strategies Value Chains

Environmental Scanning

The acquisition and analysis of events and trends in the environment external to an organization.

Sales

The function of selling a good or service and focuses on increasing customer sales, which increases company revenues.

Marketing

The process associated with promoting the sale of goods or services. The Marketing department supports the Sales department by creating promotions that help sell the company's products.

Value Chain Approach

Views an organization as a series of processes, each of which adds value to the product or service for each customer