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Management Information Systems

Notes Firstly we will recognize the definition of firm and business to understand firm-level strategy
in a clear manner.
A microeconomic notion specifies that a firm is a corporation that exists and makes decisions so
as to make the most of profits. The speculation of the firm goes along with the speculation of the
consumer, which specifies that consumers search for maximizing their on the whole utility.

Business is defined as an organization or enterprising unit occupied in commercial, industrial or
professional activities. A business can be a for-profit unit, like a publicly-traded firm, or a non-
profit organization involved in business activities, such as an agricultural cooperative. Businesses
communicate with the market to verify pricing and demand and then assign resources as per the
models that require maximize net profits.

2.5.2 Industry-Level Strategy and Information Systems

The industry level strategy and information system based on:
 Competitive Forces and Network Economics
 Information Partnerships

Competitive Forces and Network Economics

Look at the relationship between America OnLine and Microsoft. On one hand, they are fierce
competitors, going head to head in attracting Web users to their respective Web sites. On the
other hand, they work together to supply Web users with desktop icons for accessing the Web.
How is it that they can compete so vigorously in one area and yet cooperate so well in another?
Because both make sense and make money for each company.

Information Partnerships

Many times it’s more productive and cheaper to share information with other companies than to
create it yourself. Information partnerships between companies, even competitors, can enhance
a company’s products by aligning them with an industry-wide standard. Vehicle tire
manufacturers form information partnerships to share information about standard widths and
sizes of tires. Can you imagine how difficult it would be for consumers and other businesses if
each tire maker built tires differently?
Other companies form information partnerships to add extra elements to their products which
they couldn’t offer on their own. Lots of companies offer credit cards with their logo and company
information. They then share customer information with the credit card companies. Both companies
win because they can offer extra services and products not available if they had to act alone.
Industry is defined as a fundamental category of business activity. The term industry is sometimes
used to illustrate a very specific business activity (such as semiconductors) or a more common
business activity (such as customer durables). If a company contributes in numerous business
activities, it is generally considered to be in the industry in which most of its profits are derived.

Competitive Force Model

The most renowned support for scrutinizing competitiveness is competitive forces model. It has
been used to produce approaches for companies to augment their competitive frame. It also
illustrates how IT can increase the competitiveness of corporations. The model identifies the
chief forces that could jeopardize a company's position in a specified industry. Even though the
particulars of the model vary from one industry to another, its common structure is worldwide.

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