MIS Chapter 2 Study Guide

Information Technology Management | Strategy & Technology

Relevant Lexicon

Sustainable Competitive Advantage Financial performance that consistently outperforms industry averages by establishing a unique, preserved difference that rivals cannot easily replicate. Slide 6
Porter’s Five Forces An external analytical tool used to assess industry attractiveness and structural profitability by evaluating rivalry, entry threats, substitutes, and bargaining powers. Slides 10-11
Capital Intensity A specific barrier to entry representing the significant financial resources required for fixed assets (e.g., fleet, R&D, infrastructure) to compete in an industry. Slide 13
Switching Costs (Lock-in) The economic and psychological friction (monetary, time, or learning-based) that discourages a customer from migrating to a competitor's ecosystem. Slide 14
Network Effects Also known as Metcalfe's Law; the phenomenon where the utility or value of a platform is a function of the total number of connected users. Slide 15
Porter’s Model of Competitive Strategy A strategic matrix where firms choose to compete on Cost or Differentiation across either a Broad or Narrow (Niche) market scope. Slide 19
Value Chain Model An internal analysis of a firm's sequential activities, categorized into Primary (revenue-generating) and Support (infrastructure-enabling) functions. Slide 22
5-Part IS Model A framework consisting of Hardware, Software, Data, Procedures, and People; automation represents the shift of work from the Human side to the Computer side. Slide 28

Interactive Practice

A group of UT students launches "StudyBuddy." As more students join, the data becomes more valuable. Users stay even when a better-looking app launches because their friends are on StudyBuddy.

Which concept best explains StudyBuddy's lead?

A shop owner sets up a new POS system with iPads and data backups, but baristas struggle because there were no written instructions or training sessions provided.

Which component of the 5-Part IS Model is failing?

"Longhorn Tees" managers spend their time negotiating with wholesalers for cheaper cotton and organizing their storage facility to speed up production prep.

Which primary activity of the Value Chain is this?

A student wants to start a scooter rental service but realizes the $200,000 upfront cost for a fleet and city permits is too high for her to afford right now.

Which of Porter's Five Forces is most significant here?

A tech company hires HR managers to recruit developers and invests in a new office building to house its programming team.

Which of the following is a support activity in the Value Chain?