Chapter 2 - Week 2

Chapter 2

Q1. What is the difference between an 'application' and a computer-based information systems?

An Application is known as a program that was designed to perform a specific function directly for the user or for another application program eg, Microsoft word or Excel.

Where as a computer-based information system is an information system that uses specific computer technology to perform required tasks, these include hardware, software, database and network.

Q2. What are strategic information systems?

Strategic information systems are systems that help an organisation gain a competitive advantage and provide an other advantages to an organisation such as helping it organise and implement strategic goals and increase its performance and productivity.

Q3. According to Porter, what are the five forces that could endanger a firm’s position in its industry or marketplaces?

5 Major forces that could either enhance or endanger a company's position in a given industry include:

• The threat of entry of new competitors


• The Bargaining power of suppliers


• The bargaining power of customers(buyers)


• The threat of substitute good or services


• The rivalry among existing firms in the industry

Q4. In relation to Porter's value chain model, what is meant by primary activities and support activities, and how does IT support these activities?

Primary activities involve the the purchasing of materials, the processing into products and delivering to the customers. Primary activities relate to both the production and distribution of the firms good and services creating value for which customers are willing to pay.
Primary activities are made up of:

1. Inbound Logistics 2. Operations 3. Outbound Logistics 4. Marketing and Sales 5. Services

Support Activities do not directly add value to the firms products or services, the contribute to the firms competitive advantage in the industry by supporting the primary industry.
Support activities are made up of:

1. The Firms Infrastructure 2. Human Resource Management 3. Product and Technology Development 4. Procurement

IT supports these activities by monitoring any changes or finding out and implementing faster and cheaper ways to achieve desired goals.

Q5. Discuss the logic of building information systems in accordance with the organizational hierarchical structure.

Each information system is built in accordance to it purpose or specific area. In this case of organisational hierarchical structure, systems are based on management level, where certain systems have certain information regarding to the rank or position in a company for example the information for Partners of a company are not in the same information system as the managers as they don't need to know that information.
When something is built or created for a specific purpose or area it is specialised in the way that those people work and over times is fixed so it is very efficient with no bugs.

Q6. How has the Internet affected each of the five forces in Porter’s competitive forces model.

The Internet has affected:

• The threat of entry of new competitors- with the Internet almost all companies have the opportunity to have a global market place and compete with global companies for market share in an industry which led to an increase in new competitors.


• The Bargaining power of suppliers-The increase in suppliers has allowed the the buyer to get a better deal as prices are reduced to attract more buyers


• The bargaining power of customers(buyers)-As above the increase in the number of choices available the lower the prices they are sold for.


• The threat of substitute good or services- The threat has increased as the Internet has allowed for an increase of substituted goods on the market


• The rivalry among existing firms in the industry-With more company's competing for the same business they must become competitive and reduce prizes to attract more consumers to them rather then other firms in the same industry.