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Key termS anD ConCeptS Collaboration Exercise 3 141

Activity 126 Five forces model 120 Support activities 124
Business process 126 Linkages 124 Switching costs 131
Business process management 127 Margin 124 Value 124
Competitive strategy 121 Primary activities 124 Value chain 124
Cost 126 Repository 126

MyMISLab ™

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USinG y oUr KnowleDGe

3-1. Choose four organizations in a particular industry. The e. After identification of the primary activities for on-
first organization should be following the competitive line teaching, identify the support chain activities
strategy of lower cost across the industry, the second as they apply to this new code of teaching.
should be following the competitive strategy of lower f. Describe how information system could be used to
cost within an industry segment, the third should be support traditional classroom teaching.
following the competitive strategy of better service/ 3-3. John owns and operates two hotels, Budget 99 and
products across the industry, and the last should be Luxury 100. John never attended a professional
following the competitive strategy of better products/ course in any university. He has worked for years in
services within an industry segment. Compare their his uncle’s hotel and eventually gained experience
strategies and analyze how the information system and confidence to start his own business. Budget 99
could be used for each shortlisted organization to gain is a budget hotel that focuses on college tours, middle
competitive advantage.
or lower income groups, whereas Luxury 100 targets
3-2. Suppose that your college wants to open another high income groups, like business executives. John
branch in some other city. You are being hired as a has never heard of Michael Porter or any his theories.
consultant by your college. To guide the administration He operates his business by his ‘gut feeling.’
in deciding whether to open a new branch or not. You a. Explain how the knowledge of the Porter’s competi-
need to know the financial viability of the new project, tive model can help John to run his hotels in a better
which is dependent on the future intake of students way.
and also the competitors. For this you decide to imple- b. Refer to Figure 3.5 to enlist possible competitive strat-
ment Porter’s competitive forces model into practice. egies that John can formulate.
a. Analyze the present scenario of this industry ac- c. Refer to Figure 3.7 and list the task descriptions of
cording to the Porter’s competitive forces model. the primary activities of the value chain of the hotels.
b. Based on the analysis conducted in part a, recom- d. Refer to Figure 3.10 and make a detailed chart of
mend a competitive strategy. operations value chains at the reception counter for
c. Consult your teachers to find out new courses that both Budget 99 and Luxury 100 hotels.
should be included in the new college. e. Considering the above answers, how can John use
d. Suppose that you suggest a differentiation strategy information system for his Luxury 100 hotel. While
to start a new mode of teaching, i.e. online distance answering this question, take both perspectives
education courses to target the working executives. into account, i.e. operational as well as customer
In this new mode of teaching (online teaching), list perspective, and then give reasons on how the
the primary value chain activities as they apply to implementation of an information system will yield
this business. positive results for John.