UMIS Chapter 2

five forces model

A framework that identifies five forces that determine the profit potential of an industry and shape a firm's competitive strategy.

first mover advantage

Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage

activity

a business function that receives inputs and produces outputs

repository

a collection of something

business process

a network of activities that generate value by transforming inputs into outputs

value chain

a network of value-creating activities

switching costs

costs that make customers reluctant to switch to another product or service

competitive strategy

determines the structure, features, and functions of every information system

primary activities

firm activities that add value directly by transforming inputs into outputs as the firm moves a product or service horizontally along the internal value chain

support activities

firm activities that add value indirectly, but are necessary to sustain primary activities

linkages

interactions across value chain activities

second mover advantage

occurs when a market follower observes what has made the leader successful and improves on it

value

the amount of money that a customer is willing to pay for a resource, product, or service

cost

the cost of the inputs plus the cost of the activities

margin

the difference between the value that an activity generates and the cost of the activity

business process management

the streamlining of business processes to increase margin