OMIS2000- Chapter Notes

Advantages puts pressure to compete on price page 81

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Unformatted text preview: delivery suppliers 4 strategies for dealing w/ competitive forces: 1) Low- Cost Leadership: use IS to achieve the lowest operational costs and the lowest prices. Ex. Wal- Mart’s lightning speed inventory system has an efficient customer response system – directly links consumer behavior to distribution and production and supply chains. 2) Product Differentiation: manufacturers and retailers are using IS to create products and services that are customized and personalized to fit the precise specifications of individual customers. Ex. NIKEiD allows customers to customize their shoes with various options mass customization 3) Focus on Market Niche: use IS to enable a specific market focus and serve this narrow target market better than competitors. IS enable companies to analyze customer buying patterns, tastes, and preferences closely so that they efficiently pitch advertising and marketing campaigns to smaller and smaller target markets. Ex. Hilton Hotel’s OnQ system analyzes detailed data collected on active guests in all its properties to determine the preferences of each guest and each guest’s profitability. 4) Strengthening Customer and Supplier Intimacy: use IS to tighten linkages w/ suppliers & develop intimacy w/ customers. Ex. Chapters.Indigo.ca keeps track of user preferences for book and CD purchases and can recommend titles purchased by others to its customers. Storage linkages to customers and suppliers increase switching costs (the cost of switching from one product to a competing product), and loyalty to your firm. Impact of Intern...
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