Assignment # 3
Primary activities refer to actions that are directly concerned with delivery and creation of products and services. Primary activities can be grouped into five areas namely, service, inbound logistics, outbound logistics, operations, marketing and sales (Harrison and Caron 60). Inbound logistics involve receiving, storing, and distributing raw materials. Operations involve transforming raw materials into finished products. Outbound logistics entails receiving, storing, and distributing finished products. Marketing and sales involves identification of consumers’ needs, distribution, and generation of sales. Finally, services involve provision of support services to consumers.
Conversely, support activities are business processes that are not directly related to creation or delivery of products and services. However, they help in improving the effectiveness and efficiency of primary activities. Support activities include, procurement, technology development, human resource management (HRM), and infrastructure (Harrison and Caron 60). Procurement involves purchasing inputs such as equipment and supplies. Technology development involves incorporating technologies that support value creation in the production process. HRM entails recruiting, hiring, training and compensating employees. Finally, infrastructure involves business aspects such as control systems, organizational structure and culture.
Online Marketing: It involves using the internet to create market awareness and generate sales. The internet strengthens marketing and sales, which are primary activities. Businesses are able to reach a wider market and offer online services through applications such as shopping carts.
With rapid technological advancements, more products and services are being replaced by new technologies. For example, businesses that offer intermediary services are threatened by E-commerce, which is increasingly becoming popular. Buyers and sellers are able to meet online and transact businesses without the involvement of intermediaries.
Alignment strategy is the ability of a business to balance between the overall goals of the organization and those of departments and employees. Both organizational and individual objectives are met. Conversely, impact strategy is the ability of a business to influence change in departmental and employee goals. Departments and employees focus on attaining the overall goals of their institution.
The four strategic quadrants include diversification, market development, market penetration and product development. Market development and diversification involves business processes that are related to new products and services. Conversely, market penetration and product development involves processes that are related to existing products and services. E-commerce is an example of an IT system that would fit all the four quadrants. It creates an additional market segment and offers unique payment methods. Conversely, E-Commerce would also penetrate the market through online marketing tools. In addition, it would offer better quality product and service delivery.
Since IT is a source of product or service differentiation, it allows business to create uniqueness in production and service delivery. However, a free market environment weakens this competitive advantage. With time, competitors within the industry gain access to the new technology and as a result, will diminish its uniqueness. In addition, a new and more superior technology might be introduced into the market. To maintain a competitive advantage, businesses have to spend heavily on technological research development. According to Grimm, Moulton and Wasshausen, capital expenditure by US companies on IT rose from 30% to 50% between 1990 and 2000 (13). Smith, Fingar and Carr argue that business should be technological followers and not leaders (27). Focus should be kept on technological planning aimed at identifying and adopting existing technologies.
Enterprise Resource Planning (ERM)
Resource planning can be classified into space, equipment, finances and people. The ability of a manager to administer these four areas will influence the success of their departments. It is important for an IT manager to ensure teamwork and commitment from all employees and equitable budget allocation. The manager should also ensure that the organization is committed towards procuring new equipments that will improve production of the entire organization.
It is the duty of the IT manager to ensure that the organization stays informed of the changes and progress relating to the IT field. An IT manger must be able to identify new technologies that can be applied to their organization’s environment. This will ensure effectiveness and efficiency of primary activities.
E-commerce is a support activity that promotes electronic business transactions through systems such as the internet, intranet and extranets (Newman 117). Electronic commerce can be classified into four major groups namely business-to-business, business-to-customer, customer-to-customer and customer-to-business (Botha, Bothma and Geldenhuys 128). Through computer networks, communication between business and customer can be enhanced. Internet marketing would ensure that sellers advertise their products to the wider global market. It would enhance market awareness and increase online sales. Through electronic fund transfer, customers are able to pay for purchases. Electronic supply chain management would ensure that unnecessary intermediaries between the buyers and the sellers are eliminated. Though intranets and extranets, inventory management systems would enable suppliers to monitor stock levels their customers and automatically deliver inputs whenever necessary.
Botha, John, Cathrrine Bothma, and Pieter Geldenhuys. Managing E-Commerce in Business. Cape Town, South Africa: Juta, 2008. Print.
Grimm, Bruce, Brent Moulton and David Wasshausen. Information Processing Equipment and Software in the National Accounts. Washington, DC: US Department of Commerce’s Bureau of Economic Analysis, 2002. Print.
Harrison, Jeffrey and St. John Caron. Foundations in Strategic Management. Mason, Ohio: South-Western Cengage Learning, 2010. Print.
Newman, Robert. Computer Security: Protecting Digital Resources. Sudbury, Mass: Jones and Bartlett Publishers, 2010. Print.
Smith, Howard, Peter Fingar, and Nicholas G. Carr. It Doesn’t Matter-Business Processes Do: A Critical Analysis of Nicholas Carr’s I.t. Article in the Harvard Business Review. Tampa, Fla: Meghan-Kiffer Press, 2003. Print.
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