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“What is meant by value chain? Explain its significance in MIS?

The connection between the producers and buyers may be reinforced, at least to the level of
customer loyalty, and perhaps to the point of establishing a partnership between them. Such a
relationship imposes ‘Switching casts’ on the buyer, because its internal process becomes adapted
to the beneficial peculiarities of the particular factor of production, and use of an alternative
would force internal changes. Hence product differentiation also serves as an entry barrier. In
addition, a continuous process of product differentiation may produce and additional cost
advantage over competitors and potential entrants, through intellectual property protections,
such as potent, and the cost of imitation.

The activities performed by a particular enterprise can be analyzed into primary activities, which
directly adds value to the enterprises factors of production, which are together referred to as the
‘value chain’, and supporting activities.

There is always a mention about what IT contributes to corporate strategy. It was recognized that
corporation achieved a significant competitive advantage by adopting suitable IT concepts in
building up their strategy. It quickly become incumbent on its competitors to neutralize that
advantage, and hence to avoid ‘competitive disadvantage’ (Vitate 1986, warner 1987, Brouns eau
1990). The notion of ‘competitive advantage’ and ‘contestable’ competitive advantage came in
light (Clemons 1986, Feeny andlves 1989, clborra 1992). Though many kinds of advantages which
can possibly be derived from innovative use of IT, it is possible to quickly neutralize by others. A
distinction needs to be made between the sustainable of the original advantage, and of any
derived advantage.

An enhancement to the porter framework of competitive strategy was the notion of ‘alliance’
(Barrett and Konsyanski 1982, Gummesson 1987, EDP Analyzed 1987, Johnston and vitale 1988,
Rockart and short 1989 Wiseman 1989, Konsyanski and Mcfarian 1990 ford 1990, Bowersox
1990). This referred to chains or clusters of organizations which collaborate in order to gain
competitive advantage over others, similar organizations, or to neutralize the advantage of one or
more competitor organizations. The innovation in IT and its strategies importance to enterprise is
compatible with the company’s existing characteristics and advantages (Beath and Ives 1986,
Clemons and Row 1987, Ives a and Vitale 1988, Hopper 1990). One policies and outline of factors
that influence organization’s strategic goals is summarized in the following levels.