Sunday, May 23, 2010

Chapter 11: Project Management

1. Explain the triple constraint and its importance in project management.
The triple constraint involves making trade offs between scope, time and cost for a project. It is inevitable in a project life cycle that there will be changes to the scope, time or cost of the project. The three variables are interdependent: you cannot change one without changing the others. There is a high failure rate in IT projects between 30 and 70 per cent due to late delivery, exceeding budget, or not delivering what was agreed upon. A successful project is typically on time, within budget, meets the business' requirements and fulfills the customer's needs.




2. Describe the two primary diagrams most frequently used in project planning.
The two primary diagrams used in project planning include PERT (program evaluation and review technique) and Gantt charts. PERT charts are a graphical network model that depicts a project's tasks and the relationships between those tasks. Gantt charts are a simple bar chart that depicts project tasks against a calendar.



An example of a PERT chart

3. Identify the three primary areas a project manager must focus on managing to ensure success.
A project manager must focus on managing three primary areas to ensure success: managing people, managing communications and managing change. Managing people is one of the hardest and most critical efforts a project manager untertakes. Resolving conflict within the team and balancing the needs of the project with the personal and professional needs of the team are two of the challenges facing project managers.

4. Outline two reasons why projects fail and two reasons why projects succeed.
Two reasons why projects fail include: failure to align project with organizational objectives, and inability to move beyond individual and personality conflicts.
Two reasons why projects succeed include: good communication and team members are working towards a common goal.

Wednesday, May 5, 2010

Chapter 9: CRM and BI

1. What is your understanding of CRM?
Customer relationship management involves managing all aspects of a customer's relationship with an organisation to increase customer loyalty and retention and an organisation's profitability. It helps companies make their interactions with customers seem friendlier through individualization. Organisations implement customer relationship management systems to gain a better understanding of customer needs and behaviours.

2. Compare operational and analytical customer relationship management.
Operational customer relationship management: Supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. It focuses on organising and simplifying the management of customer information. It uses a database to provide consistent information about a company's interaction with a customer.

Analytical customer relationship management: supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. It uses data to provide strategic data about customers. Data mining uses various modelling and analysis techniques to find patterns and relationships to make accurate predictions.


3. Describe and differentiate the CRM technologies used by marketing departments and sale departments.
- List generator: compiles customer information from a variety of sources and segments the information for different marketing campaigns.
- Campaign management system: guides users through marketing campaigns. Looking at the cost of a campaign, who they are going to target.
- Cross-selling and up-selling: Cross selling is selling additional products or services and up-selling is increasing the value of the sale.

Helping the sales people co-ordinate their jobs, using things such as calenders, appointments, meetings, multi media presentations. Particularly interested in contact management.


4. How could a sales department use operational CRM technologies.
A sales department could use operational CRM technologies in the following ways:
Operations is about day to day type of things.
List generators - the ability to provide information on specific aspects of the business.
Campaign management - performing tasks such as scheduling, segmentation etc
Cross selling and up selling - contact points, may be able to sell a complimentary product. a good CRM can tell when you should suggest a particular product. Up selling is selling the same product in large quantities.

5. Describe business intelligence and its value to businesses.
Business intelligence are applications and technologies used to gather, provide access to, and analyse data and information to support decision-making efforts. Business intelligence includes simple MS Excel Pivot tables to highly sophisticated software that fetches data from the different front-and back-office systems. Some of the benefits of BI include: single point of access to information for all users, BI across organisational departments and up to the minute information for everyone. Many businesses are finding that they must identify and meet the fast-changing needs and wants of different customer segments in order to stay competitive in today's consumer-centric market. Business intelligence is valuable for businesses because it can determine who are the best and worst customers thereby gaining insight into where the business needs to concentrate more of its future sales, it identifies exceptional sales people, it determines whether or not campaigns have been successful and it determines which activities are making or losing money.

6. Explain the problems associated with business intelligence. Describe the solution to this business problem.
Companies are data rich and information poor, so much data going around that they dont really know what there compeditors are doing, dont know what the best tactical move to make is, too much data and no tools to see what they need to see to align data and decision making. Business intelligence is the solution. It makes better decisions in teh organisaiton, and not just the IT department having access to teh data, everyone does so can see more data analysis, and reducing the latency.

7. What are two possible outcomes a company could get from using data mining? Data mining is the application of statistical techniques to find patterns and relationships among data and to classify and predict. Data mining techniques emerged from statistics and mathematics and from artificial intelligence and machine-learning fields in computer science.

Tuesday, April 27, 2010

Chapter 8: Operations Management and Supply Chain

1. Define the term operations management.
Operations management is the management of systems or processes that convert or transform resources into goods and services. Operations management is responsible for managing the core processes used to manufacture goods and produce services.

2. Explain operations management's role in business.
The scope of the operations management ranges across the organisation and includes many interrelated activities, such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities and more. To be effective, the operations manager must have access to real-time, accurate data to support their decisions. Below is an example of an airline companies operations managements activities:
- Forecasting - seats, weather and landing conditions.
- Capacity planning - maintaining cash flow and increase revenue.
- Scheduling - airline operates on tight schedules that must be maintained including flights, pilots, flight attendants, ground crews, baggage handlers and routine maintenance.
- Management inventory - inventory of such items as foods, beverages, first-aid equipment, in-flight magazines, pillows, blankets and life jackets.
- Assuring quality - quality is indispensable in an airline where safety is the highest priority.
- Motivating and training employees - employees must be highly trained and continually motivated.
- Locating facilities - key questions facing airlines include which cities to offer services, where to host maintenance facilities and where to locate major and minor hubs.

3. Describe the correlation between operations management and information technology.
Managers can use information technology to heavily influence operations management decisions including productivity, costs, flexibility, quality and customer satisfaction. One of the great benefits of IT on operations management is in making operational decisions because operation managers exerts considerable influence over the degree to which the goals and objectives of the organisation are realised.
However there are some problems that operations managers face, including: disparate systems in different business units hamper the flow of information and material between operations often times inflating costs and inventories, and aging and inconsistent technology platforms lead to increasing IT maintenance and support costs.

4. Explain supply chain management and its role in a business.
Supply chain management involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. It is a network of organizations and facilities that transforms raw materials into products delivered to customers. Customers order from retailers, who in turn order from distributors, who in turn order from manufacturers, who in turn order from suppliers. The supply chain also includes transportation companies, warehouses, and inventories and some means for transmitting messages and information among the organizations involved.

5. List and describe the five components of a typical supply chain.
The five components of a typical supply chain are:
1. Plan - A company must have a plan for managing all the resources that go toward meeting customer demand for products or services. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less, and delivers high quality and value to customers.
2. Source - Companies must carefully choose reliable suppliers that will deliver goods and services required for making products. Companies must also develop a set of pricing, delivery, and payment processes with suppliers and create metrics for monitoring and improving the relationship.
3. Make - This is the step where companies manufacture their products or services. This can include scheduling the activities necessary for production, testing, packaging, and preparing for delivery. This is by far the most metric-intensive portion of the supply chain, measuring quality levels, production output and worker productivity.
4. Deliver - This step is commonly referred to as logistics. Logistics is the set of processes that plans for and controls the efficient and effective transportation and storage of supplies from suppliers to customers. During this step, companies must be able to receive orders from customers, fulfill the orders via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payments.
5. Return - This is typically the most problematic step in the supply chain. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products.

6. Define the relationship between information technology and the supply chain.
Information Technology's primary role in supply chain management is creating the integrations or tight process and information linkages between functions within a firm - such as marketing, sales, finance, manufacturing and distribution - and between firms, which allow the smooth, synchronized flow of both information and product between customers, suppliers and transportation providers across the supply chain.
Information Technology integrates planning, decision making process, business operating processes and information sharing for business performance management.
There are 4 factors that drive the supply chain management:
1. Visibility - supply chain visibility is the ability to view all areas up and down the supply chain.
2. Competition - supply chain planning (SCP) software uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain, and supply chain execution (SCE) software - automates the different steps and stages of the supply chain.
3. Speed - competition often equates to speed. Advances in IT are delivering this speed. Factors fostering speed include pleasing customers, need for reducing inventory and strategic planning requirements.
4. Consumer behaviour - companies can respond faster and more effectively to consumer demands through supply chain enhances. Demand planning software generates demand forecasts using statistical tools and forecasting techniques.

Friday, April 23, 2010

Chapter 7: Networks and Wireless

1. Explain the business benefits of using wireless technology.
The business benefits of

2. Describe the business benefits associated with VoIP.
The business benefit of VoIP (Voice over IP) is that it allows the internet to carry voice in digital format, therefore call costs will dramatically decrease as the international calls are now internet connections. It saves money in three ways; VoIP runs over the existing computer network, calls over the internet do not attract Telecommunication charges, and customers can port their numbers between carriers. However businesses still need to have at least one normal PSTN lines are VoIP is susceptible to power failure, viruses and other threats.

3. Describe LANs and WANs.
LAN - Local area networks connect computers that reside in a single geographic location on the premises of the company that operates the LAN.
WAN - Wide area networks that connect computers at different geographical sites.

4. Describe RFID and how it can be used to help make a supply chain more effective.
RFID stands for radio frequency identification. They are tags that use radio waves to transmit data. They are heavily used in Inventory tracking, and should eventually replace barcodes. Passive radio frequency identification uses no internal power and can pick up the very faint signal from an antenna. An active radio frequency identification has power and transmits much stronger and accurate data. It can power up just enough to transmit data back to antenna. It can also store small amounts of EPROM data. They can be mass produced at a very low cost

5. Identify the advantages and disadvantages of deploying mobile technology.
Advantages

Tuesday, April 13, 2010

Chapter 6: Databases and Data Warehouses

1. List, describe and provide an example of each of the five characteristics of high quality information.
- Accuracy
- Completeness
- Consistency
- Uniqueness - Timeliness

2. Define the relationship between a database and a database management system.
A database is a collection of information that is organised so that it can easily be accessed, managed, and updated. Computer databases typically contain aggregations of data records or files, such as sale transactions, product catalogs and inventories, and customer profiles. An example of a database is Microsoft Access.

A database management system is a set of computer programs that controls the creation, maintenance, and the use of a database. It allows organisations to place control of database development in the hands of database administrators and other specialists. A database management system is a system software package that helps the use of integrated collection of data records and files known as databases. It allows different user application programs to easily access the same databases.

3. Describe the advantages an organisation can gain by using a database.

Databases have many advantages when used by an organisation. These are listed below:
- Data Security - Keeping the organisation's data safe from theft, modification and/or destruction.
- Data Integrity - Data must meet constraints (e.g. student grade point average cannot be negative)
- Data Independence - Applications and data are independent of one another. Applications and data are not linked to each other, meaning that applications are able to access the same data.
- Increased flexibility - should be able to handle changes quickly and easily.
- Increased scalability and performance - a database must scale to meet increased demand, while maintaining acceptable performance levels. Scalability refers to how well a system can adapt to increased demands and performance measures how quickly a system performs a certain process or transaction.
- Reduced information redundancy
- Increased information integrity (quality)
- Increased information security - information is an organisational asset and must be protected. Databases offer several security features including: password (provides authentication of the user), access level (determines who has access to the different types of information) and access control (determines types of user access, such as read-only access).

4. Define the fundamental concepts of the relational database model.
A relational database is a collection of tables from which data can be accessed in many different ways without having to reorganize the database tables. That is, once relationships are created, tables can talk to each other. We can link (relate) the tables to find: which doctors are seeing a patient, which students are in which class and which item is selling the most on Friday's. Relational databases work on unique records, if you don't have unique records, your database can't tell which record you may be referring to. To ensure that each record is unique in each table, we can set one field to be a primary key field. A primary key field is a field that will contain no duplicates and no blank values.

5. Describe the benefits of a data driven website.
A data driven website is an interactive website kept constantly updated and relevant to the needs of its customers through the use of a database. The customer enters the search criteria in the website. The database runs a query on the search criteria. Some of these advantages include: development, content management, future expandability, minimising human error, cutting production and update costs, more efficient and improved stability.

6. Describe the roles and purposes of data warehouses and data marts in an organisation.
Data warehouse is a logical collection of information, gathered from many different operational databases, that supports business analysis activities and decisions-making tasks. The primary purpose of a data warehouse is to aggregate information throughout an organisation into a single repository for decision-making purposes.


Monday, April 5, 2010

Chapter 5: Enterprise Architectures

1. What is information architecture and what is information infrastructure and how do they differ and how do they relate to each other?
Information architecture - identifies where and how important information, such as customer records, is maintained and secured.
Information infrastructure - Communications networks and associated software that supports interaction amongst people and organisations. Its the computers and communications lines underlying critical services that society has come to depend on: financial networks, the power grid, transportation, emergency services, government services. It includes the internet and telecommunication networks.
2. Describe how an organisation can implement a solid information architecture.
An organisation can implement a solid information architecture by having a backup and recovery strategy. The three primary areas of information architecture are backup and recovery, disaster recovery and information security. With these three primary areas strong then a solid information architecture.

3. List and describe the five requirement characteristics of infrastructure architecture.
Reliability - High accuracy (low accuracy puts the organisation at risk).
Scalability - systems ability to meet growth requirements, involves capacity planning.
Flexibility - able to meet changing business demands. Might involve multinational challenges.
Availability - High availability 99.999% uptime. Ensures
business continuity.
Performance - How quickly a system performs a certain task. Growing pressure on systems to be faster.

4. Describe the business value in deploying a service oriented architecture.
The business value in deploying a service oriented architecture is that IT systems can adapt quickly, easily and economically to support rapidly changing business needs. It also allows enterprises to plug in new services or upgrade existing services in a granular fashion and means that a business can respond more quickly and cost-effectively to changing market-conditions.


5. What is an event?
An event is the eyes and ears of the business expressed in technology, they detect threats and opportunities and alert those who can act on the information. Pioneered by telecommunication and financial services companies, this involves using IT systems to monitor a business process for events that matter.

6. What is a service?
A service can be a business task, such as checking a potential customer's credit rating only opening a new account. Services are 'like' software products. They are more like software products than they are coding projects.

7. What emerging technologies can companies use to increase performance and utilise their infrastructure more effectively?
Virtualisation is a framwork of dividing the resources of a computer into multiple execution environments. It is a way of increasing physical resources to maximise in the investment in hardware. VM customers typically save 50-70% on overall IT costs by consolidating their resource pools and delivering highly available machines with VMware and vSphere.

Grid computing is an aggregation of geographically dispersed computing, storage, and network resources, coordicated to deliver improved performance, higher quality of service, better utilisation, and easier access to data. Used by scientific, e-Commerce, technical or engineering projects that require many processing cycles to complete a job.

Monday, March 22, 2010

Chapter 4: Ethics and Information Security

1. Explain the ethical issues surrounding information technology.
Ethics are the principles and standards that guide our behaviour towards other people. The ethical issues surround technology include:
> Intellectual property - the collection of rights that protect creative and intellectual effort.
> Copyright - the exclusive right to do, or omit to do, certain acts with intangible property such as a song, video game and some types of proprietary documents.
> Fair use doctrine - in certain situations, it is legal to use copyrighted material.
> Pirated software - the unauthorised use, duplication, distribution, or sale of copyrighted software.
> Counterfeit software - software that is manufactured to look like the real thing and sold as such.
> Privacy - the right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent.

2. Describe the relationship between an 'email privacy policy' and an 'Internet use policy'.
An email privacy policy details the extent to which email messages may be read by others. Organisations can mitigate the risks of email and instant messaging communication tools by implementing and adhering to an email privacy policy. Organisations should have a policy that clearly sets out how employees may use email and the Internet for private and non-employment purposes. Email privacy policy stipulations include; describes the legitimate grounds for reading someone's email and the process required before such action can be taken, explains the backup procedure so users will know that at some point, even if a message is deleted from their computer, it will still be on the backup media, and it defines who legitimate email users are.
An Internet use policy contains general principles to guide the proper use of the Internet within an organisation. The policy describes available Internet services, defines the purpose and restriction of Internet access, complements the ethical computer use policy, describes users responsibilities and states the ramification for violations.

3. Summarise the five steps to creating an information security plan.
Step 1: Develop the information security policies - identify who is responsible and accountable for designing and implementing the organisation's information security policies. E.g policies requiring users to log off their systems before leaving the office.
Step 2: Communicate the information security policies - train all employees on the policies and establish clear expectations for following policies. E.g. Let employees know that they will receive a formal reprimand for leaving a computer unsecured.
Step 3: Identify critical information assets and risks - require the use of user IDs, password and antivirus software on all systems. Ensure any systems that contain links to external networks have the appropriate technical protections such as firewalls or intrusion detection software.
Step 4: Test and re-evaluate risks - continually perform security reviews, audits, background checks and security assessments.
Step 5: Obtain stakeholder support - gain the approval and support of the information security polices from the board of directors and all stakeholders.

4. What do the terms; authentication and authorization mean, how do they differ, provide some examples of each term.
Authentication is a method for confirming users' identities. Once a system determines the authentication of a user, it can then determine the access privileges (or authorisation) for that user. The most secure type of authentication involves: something the user knows, something the user has and something that is part of the user.
Authorisation is the process of giving someone permission to do or have something. In multiple-user computer systems, user access or authorisation determines such things as file access, hours of access and amount of allocated storage space.

5. What are the five main types of security risks, suggest one method to prevent the severity of risks?
The five main types of security risks are:
Human error - not malicious and done by humans. Acts include tailgating, carelessness with laptops and portable computing devices, poor password selection and opening questionable e-mails.
Natural disasters - such as floods, earthquakes and terrorist attacks.
Technical failures - software bugs and hardware crashes
Deliberate acts - sabotage and white collar crimes
Management failure - lack of procedure, documentation and training.

Sunday, March 21, 2010

Chapter 3: eBusiness

1. What is an IP Address? What is it’s main function?

IP Address – an Internet Protocol (IP) address is a numerical tag that is assigned to devices in a computer network that uses the Internet Protocol to communicate between nodes (a connection point). There are two main functions of an IP address

  1. To network or host interface indentification
  2. To locate addressing (two types of addressing; logical and physical).

2. What is Web 2.0, how does it differ from 1.0?

Web 2.0 is a set of economic, social and technological trends that collectively form the basis for the next generation of the Internet, making it more mature, distinctive medium characterised by user participation, openness and network effects. Those who act on the Web 2.0 opportunity stand to gain an early-mover advantage in their markets.

Web 1.0 was created in 1991 and refers to the state of the Wide Web and any website design style used before the Web 2.0.


3. What is Web 3.0?

There have been many debates over how to define Web 3.0, with many people having mixed views on it. A suitable definition is "a highly specialised information silo that is moderated by a cult of personality, validated by the community, and put into context with the inclusion of meta-data through widget." (SOURCE) Web 3.0 encompasses one or more of the following:

> Transforming the web into a database;

> An evolutionary path to artifical intelligence;

> The realisation of semantic web and service-oriented architecture;

> Evolution towards 3D

4. Describe the different methods an organization can use to access information

There are three different methods an organization can use to access information: intranets, extranets and portals.

Intranet – private section of the internet used by companies for internal means. Eg HR forms, finance forms.

Extranet – like an intranet however an extranet you can invite fellow partners along the supply chain (producer to retailer) so you can share data easier between companies.

Portals – web page that combines many systems to appear on the one page. Various systems feeding data into one page. Information should be tailored to the person coming in.

5. What is eBusiness, how does it differ from eCommerce?

eBusiness is the conduct of business on the Internet, not only buying and selling but also servicing customers and collaborating with business partners. One of the first to use the term was IBM, when, in October, 1997, it launched a thematic campaign built around the term. eBusiness differs from eCommerce as eCommerce is the buying and selling of goods over the internet, where as eBusiness contains eCommerce and is the broader term.

6. List and describe the various eBusiness models

Business to Business (B2B) - Applies to businesses buying from and selling to each other over the internet.

Business to Consumer (B2C) - Applies to any business that sells its products or services to consumers over the Internet.

Consumer to Business (C2B) - Applies to any consumer that sells a product or service to a business over the Internet.

Consumer to Consumer (C2C) - Applies to sites primarily offering goods and services to assist consumers interacting with each other over the internet.

7. List 3 metrics would use if you were hired to assess the effectiveness and the efficiency of an eBusiness web site?

Three metrics that can assess the effectiveness and the efficiency of an eBusiness web site is number of page views, types of visitors and how long people spend on a site.

8. Outline 2 opportunities and 2 challenges faced by companies doing business online

Two opportunities are: 1) Your operation has gone from being open from 9am - 5pm, 5 days a week to being open 24 hours a day, 7 days a week. Not only is it open 24/7, It is also available to people world wide, not just in the area where your shop is located. 2) Your business can still operate even when no one is there, and you can save money on shop keeping expenses, such as wages and rent.

Two challenges face are: 1) Protecting your customers security. With people purchasing online, credit card details and passwords are used in nearly every transaction. Trying to keep these passwords and numbers safe can be very complicated. 2) It is very hard for the customer to return the goods if not satisfied, which is very easy to do if there is a physical shop. There can also be mix ups with currency, languages and taxation laws.

Chapter 2: Stategic Decision Making

1. Define TPS & DSS, and explain how an organisation can use these systems to make decisions and gain competitive advantages.

TPS - Transaction Processing Systems is a type of information system that collects, stores, modifies and retrieves the data transactions of an enterprise. The success of enterprises depend on the reliable processing of transactions to ensure that customer orders are met on time, that they can make payment and that partners and suppliers are paid.

DDS - Decision Support System is a class of information systems that support business and organizational decision-making activities. A properly designed decision support system is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, personal knowledge, documents, or business models to identity and solve problems and make decisions.

2. Describe the three quantitative models typically used by decision support systems.

Three quantitative models often used by DDS include:

1. Sensitivity analysis – study of the impact that changes in one (or more) parts of the model have on other parts of the model. Users change the value of one variable repeatedly and observe the resulting changes in other variables.

2. What-if analysis - checks the impact of a change in an assumption on the proposed solution.

3. Goal-seeking analysis - finds the inputs necessary to achieve a goal such as a desired level of output.

3. Describe a business processes and their importance to an organisation.

A business process is a standardised set of activities that accomplish a specific task, such as processing a customers order. Business processes transform a set of inputs into a set of outputs for another person or process by using peoples and tools.

4. Compare business process improvement and business process re-engineering.

Business Process Improvement - is paramount in order to stay competitive in today’s electronic marketplace. Organisations must improve their business processes because customers are demanding better products and services. Business process improvement attempts to understand and measure the current process and make performance improvements accordingly.

Business Process Re-engineering - the analysis and redesign of workflow within and between enterprises. BPR relies on a different school of thought than business process improvement. In the extreme, BPR assumes that the current process is irrelevant, does not work, or is broken and must be overhauled from scratch. Such a clean slate enables business process designers to disassociate themselves from today’s process and focus on a new process.

5. Describe the importance of business process modelling (or mapping) and business process models.

Business Process Modelling (or mapping) - is the activity of creating a detailed flowchart or process map of a work process, showing its inputs, tasks and activities in a structured sequence.

Business Process Model - is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint. A set of one or more process models details the many functions of a system or subject area with graphics and text. The purpose of a process model is to:

>Expose process detail gradually and in a controlled manner;

>Encourage conciseness and accuracy in describing the process model

>Focus attention on the process model interfaces;

>Provide a powerful process analysis and consistent design vocabulary.


Sunday, February 28, 2010

Chapter 1: Information Systems in Business

1. Explain information technology’s role in business and describe how you measure success?
IT - A field concerned with the use of technology in managing and processing information. IT is important in creating and managing the innovation and success of a company.

2. List and describe each of the forces in Porter’s Five Forces Model.
- Buyer Power - high when buyers have many choices of whom to buy from and low when their choices are few. One way to reduce buyer power is through loyalty programs. These reward customers based on the amount of business they do with a particular organisation.
- Supplier Power - high when one supplier has a concentrated power over an industry. Buyers have few choices of whom to buy from and low when their choices are many. All parties involved in the procurement of a product or raw material are links in the supply chain. The power is often with the supplier.
- Threat of substitute products or services - High when there are many alternatives to a product or services and low when there are few alternatives.
- Threat of new entrants - High when it is easy for new competitors to enter a market and low when there are significant entry barriers. An entry barrier is a product or service that customers have come to expect and must be offered to compete and survive.
- Rivalry among existing competitors - High when competition is fierce in a market and low when competition is more complacent.



3. Compare Porter’s three generic strategies.
- Broad cost leadership - the low cost producer in a business for a given level of quality. Companies sell their products either at an average industry price or a below average industry price. Firms can acquire cost advantage through a number of ways, some being gaining access to a large source of lower cost materials or by improving process efficiencies.
- Broad differentiation - calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. Firms that succeed in a differentiation strategy have some of the following strengths: highly creative and skilled development team, access to leading research and a strong sales team that can successfully communicate.
- Focused strategy - concentrates on a narrow sector and within that sector attempts to achieve either a cost advantage or a differentiation. It works on the belief that the needs of a group can be better serviced by focusing entirely on it.


4. Describe the relationship between business processes and value chains.
Once an organisation chooses its strategy, it can use tools such as the value chain analysis to determine the success or failure of its chosen strategy. Value creation is the result of effective business processes and efficient values chains. Business process is a standardised set of activities that accomplish a specific task. Value chains view an organisation as a series of processes, each of which adds value to the product or service.