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Chapter two ANSWERS TO DISCUSSION QUESTIONS

1. Suppose you are a manager being asked to develop e-business and e-commerce applications to gain a competitive advantage in an important market for your company. What reservations might you have about doing so? Why?

As a manager you are responsible to be aware of these emerging technologies and new ways of conducting business in the new economy. Of course, if the manager is familiar with the concepts of developing an e-business or e-commerce application they certainly will have personal reservations in what to do. If the manager is not familiar with the tools involved in information technology, or how to effectively use these tools the task may seen quite daunting. However, the key is to know that this technology exists, and that it can be used for competitive advantages. As a manager your first task will be to assemble a team of experts and users to work on the development of the application.

2. How could a business use information technology to increase switching costs and lock in its customers and suppliers? Use business examples to support your answers.

Switching Costs: A businesses investment in IT can make customers or suppliers dependent on the continued use of innovative, mutually beneficial on your interenterprise information systems. They then become reluctant to pay the cost in time, money, effort, and inconvenience that it would take to change to another firm or competitor.

Lock in customers and suppliers: A businesses investment in IT can lock in customers and suppliers by building valuable relationships with them, where both parties are experiencing mutual benefits. If that can be achieved, it will deter both customers and suppliers from abandoning your firm for a competitor, or from intimidating a firm into accepting a less-profitable relationship.

3. How could a business leverage its investment in information technology to build strategic IT capabilities that

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