23-Ind-B4 Design of Information Systems · December 2017
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
National Exams — December 2017 — 98-Ind-B4, Design of Information Systems. 3 hours; closed book, no calculator permitted. The exam comprises four parts: Part A (select 20 terms from the list given and explain each in a sentence or two, no more than 50 words, 2 marks each = 40 marks), Parts B and C (select 2 of 5 questions in each part, 11 marks each = 22 marks per part), and Part D (select 1 of 2 questions, 16 marks). Complete answers to every term and every question in all four parts follow below, not only the minimum selection a candidate would submit on exam day.
Reference texts: Laudon & Laudon, Management Information Systems: Managing the Digital Firm, 15th ed.; Schwalbe, Information Technology Project Management, 9th ed.
Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.
Michael Porter's model identifies five forces that shape a firm's competitive position and profitability. Traditional competitors continually devise new products, services, and efficiencies. New market entrants bring fresh capacity and pressure prices, held back where barriers to entry (capital, expertise, established brand, regulation) are high. Substitute products and services can erode demand even without a direct competitor (e.g., video conferencing substituting for business travel). Customers exert power in proportion to how easily they can switch to a competitor's offering — a function of switching costs (Question 1, term 28) and information availability. Suppliers exert power in proportion to how much control they hold over a critical input, and how easily the firm could switch suppliers.
Low-cost leadership uses IT to achieve the lowest operational costs and lowest prices, e.g., supply-chain-management systems that minimize inventory and logistics cost. Product differentiation uses IT to create new products/services or enhance existing ones distinctively, e.g., mass-customization systems letting customers configure a product to their own specification. Focus on market niche uses IT, especially analytics (Question 1, term 3) and location analytics (term 8), to serve a narrow target market better than broad-based competitors, who lack the same granular customer data. Strengthen customer and supplier intimacy uses IT (CRM, supply-chain systems) to build switching costs and loyalty by making the relationship itself, not just the product, harder for a competitor to replicate.
The internet has a double-edged effect on Porter's forces. It lowers barriers to entry (a competitor can build a global storefront with modest capital, weakening a traditional advantage rooted in physical distribution scale) and dramatically increases the bargaining power of customers, who can now compare prices and product information across many suppliers almost instantly, reducing search costs (Question 1, unrelated term but same discipline) to near zero and eroding pricing power built on information asymmetry. It also creates or expands substitute threats across whole categories (streaming vs. physical media, e-commerce vs. bricks-and-mortar retail). At the same time, the internet can be turned into a competitive weapon: a firm that builds superior digital customer intimacy (personalization, recommendation engines), a stronger digital brand, or proprietary data/analytics capability can convert the same forces that erode competitors' advantages into a durable advantage of its own, because the internet raises the ceiling on how much value superior information use can create even as it raises the floor of baseline competition.
