Information technology the hardware or software a business uses Information system interrelated components that manage information o Composed of 4 components Input processing output and feedback First 3 steps produce information and feedback refines it Configuration how a system is organized Data V Information o Data is the raw facts and information is data shaped into meaningful form UPS competes globally with information technology by using a Delivery Information Acquisition Device DIAD which automatically captures signatures and tracking information while they are being transported Efficiency what is produced what is consumed Model an abstraction that is used to represent reality o Narrative words physical tangible schematic graphic or mathematical using s Computer Based Information Systems CBIS single set of hardware software and databases etc which are configured to collect store and process data into information systems There are different systems for different levels of management o Transaction processing keeps track of basic activities and transactions of organization pay roll sales etc o Management information systems monitoring controlling and deciding administrative activities o Executive decision support systems strategic and long term issues Digital goods goods that can be delivered over a digital network the internet o Cost of producing first unit is almost entire cost of product the marginal cost of the second unit is about 0 Digital goods are different because of 6 unique factors o Ubiquity Internet is accessible anytime anywhere 24 7 o Global reach Technology reaches across national boundaries o Richness Supports video audio and text Makes more fancy and rich o Interactivity Technology interacts with user consumer becomes active in process of delivering a good to the user o Personalization customization Technology permits changes of goods based on preference o Social technology promotes social networking Facebook is the 3rd most populated country Digital markets reduce information asymmetry and search transaction costs They enable dynamic pricing disintermediation and price discrimination Time person of the year 2006 you because you control the information age Strategy a set of decisions made to achieve competitive advantage Competitive advantage when a firm outperforms its competitors in financial measures o Measured by accounting profits stock prices To achieve competitive advantage firms should display operational effectiveness and strategic positioning Operational effectiveness performing the same tasks better than rivals perform them Strategic positioning performing different tasks than your rivals or performing the same tasks in a different way Sustainable competitive advantage an advantage a firm has relative to competing firms o Even though firms can improve their efficiency by investing in IT they may not gain CA if everyone else is using the same o Example Amazon ebay and fresh direct o A company can achieve SCA if they are VRIS Valuable rare not easily imitable and not easily substitutable Product differentiation o Vertical quality acura v civic o Horizontal preference used to appeal to a distinct group of customers blue car v red car Resource based view o Resources tangible and intangible assets of a firm o Capabilities subset of resources that allow a company to take full advantage of other resources Gap o Drexler used to be CEO until sales started declining He tried to revitalize the brand by filling it with teenage apparels Lost their customer base to other brands who were copying Gap s styles Pressler became the new CEO he made bad bets on color style and soon resigned Zara o Parent company Inditex Corporation o Shuns advertising and rarely runs sales o Highly vertically integrated 60 of manufacturing is done in house Contract manufacturing manufacturing to third parties usually in other countries This is bad because it is known to be skimpy on safety ignore environmental concerns and employ child labor o Zara doesn t guess what customers like they frequently use data collection and store managers have a PDA personal digital assistant which gathers customer input and is connected to the POS point of sale system which captures customer purchase information showing how garments rank by sale o Average time for a concept to hit stores is 15 days usually other brands receive new clothes once or twice a season o JIT manufacturing crazy IT quick logistics Push v pull advertising push retailer to customer pull retailer to advertising to customer
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