Conceptual Topics
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Sustainable Competitive Advantage: Achieved when a firm’s financial performance
consistently outperforms industry averages by maintaining unique resources or
capabilities.
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Operational Effectiveness: Performing the same tasks better than rivals; not enough
for long-term advantage if easily copied.
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Strategic Positioning: Performing different tasks than rivals or similar tasks in unique
ways; focuses on differentiation rather than imitation.
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Straddling: When a firm tries to match the benefits of a successful position while
maintaining its existing one, often leading to inefficiency.
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Resource-Based View: True advantage comes from assets that are valuable, rare,
difficult to imitate, and non-substitutable.
Powerful Resources & Technology’s Role
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Imitation-Resistant Value Chains: Hard for rivals to replicate due to integration,
culture, or process design.
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Brand: Symbol of quality that builds customer trust; can reduce marketing costs.
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Scale Advantages: Cost savings achieved through size; allows lower per-unit cost.
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Switching Costs & Data: Costs consumers incur when changing providers; data
deepens customer lock-in.
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Differentiation: Standing out from competitors through unique offerings or services.
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Network Effects: The value of a product increases with each additional user.
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Distribution Channels: The route by which products/services reach customers.
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Technology enables these advantages by strengthening value chains, brands, data,
switching costs, network effects, and scale.
The Value Chain Model
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Depicts activities where competitive strategies can be applied using IT.
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Divides business processes into Primary (production, sales, marketing, service) and
Support (infrastructure, HR, tech).
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IT improves efficiency, lowers cost, and strengthens relationships with customers
and suppliers (CRM & SCM systems).
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Firms analyze each stage to identify where IS adds value and supports best
practices.
The Value Web
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A network of independent firms linked by IT to deliver products/services collectively.
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More flexible and adaptive than a linear value chain.
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Allows rapid response to changing supply and demand by optimizing partnerships
through IT.
Porter’s Five Forces
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1. Rivalry among existing competitors – intensity increases with transparency and
price competition.
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2. Threat of new entrants – Internet lowers entry barriers, increasing competition.
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3. Threat of substitutes – new technologies or services replace older ones.
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4. Bargaining power of suppliers – strong when few alternatives exist.
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5. Bargaining power of buyers – increased by price transparency and online options.
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Firms use IT to reduce these pressures: automation, CRM, differentiation, and
supply chain integration.
Levels of Management & Information Systems
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Senior Managers: Need summaries of firm-wide performance (sales, revenue,
profit). Use ESS (Executive Support System).
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Middle Managers: Monitor departmental and functional results (sales, production).
Use MIS (Management Information System)/DSS (Decision Support System).
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Knowledge Workers: Engineers/scientists create new products or knowledge using
specialized databases.
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Operational Managers: Need transaction-level data (inventory, hours worked). Use
TPS (Transaction Processing System).
Case Studies
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Zara: Integrated design, production, and distribution via real-time data; fast fashion
cycle reduces waste and meets demand quickly.
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FreshDirect: Uses data analytics and automation to optimize delivery and minimize
waste, offering fresher goods at lower prices.
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Netflix: Utilizes recommendation algorithms and data-driven personalization;
disrupted traditional media and built network effects.
Impact of the Internet on Competition
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Intensified competition by removing geographic barriers and standardizing tech.
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Increased customer bargaining power by enabling easy comparison shopping.
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Created entirely new industries and digital business models; disrupted existing ones.
Excel Function Summary
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Relative vs Absolute Addressing: Use $ to fix rows/columns (e.g., $A$1).
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IF(logical_test, value_if_true, value_if_false): Conditional logic.
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IFS(test1, value1, test2, value2, …): Multiple condition checks.
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AND / OR: Combine multiple logical conditions.
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IFERROR(value, value_if_error): Replaces errors with chosen output.
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SUMIF / SUMIFS: Add cells meeting one/multiple criteria.
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AVERAGEIF / AVERAGEIFS: Average cells meeting criteria.
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COUNTIF / COUNTIFS: Count cells meeting criteria.
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VLOOKUP(lookup_value, table_array, col_index_num, [range_lookup]): Search
vertically in first column.
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XLOOKUP(lookup_value, lookup_array, return_array, [if_not_found]): Flexible
lookup replacing VLOOKUP.
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TEXTBEFORE / TEXTAFTER / TEXTSPLIT: Extract text sections or split strings.
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TRIM / LEFT / RIGHT / CONCAT: Clean or combine text.
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SUMPRODUCT: Multiplies corresponding arrays and sums the results.
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VAR.P / VAR.S / STDEV.P / STDEV.S: Statistical variance and standard deviation.
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Conditional Formatting: Highlight data using built-in or custom rules.
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What-If Analysis: Goal Seek (find input for target output) & Data Tables (sensitivity
analysis).