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Sandun Kanchana Rathnayaka E130172 SIS
Sandun Kanchana Rathnayaka E130172 SIS
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LO2 Discuss the types of information systems that are used within all levels of an organisation
Pass, Merit & Distinction P3 P4 M2 D2
Descripts
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Submission format
Report: The submission should be in the form of an individual written report. This should
be written in a concise, formal business style using 1.5 line spacing and font size 12. You
are required to make use of headings, paragraphs and subsections as appropriate, and all
work must be supported with research and referenced. Provide in-text citations and the
reference list using Harvard referencing system. The recommended word limit is 4000
words, although you will not be penalised for exceeding the total word limit.
Scenario
The success of any organisation depends on the how data and information is captured,
processed, utilised and output. Information generated within the organisation can be
used to gain oraganisational efficiency, productivity and improved business decision
making. Modern organisations are heavily rely on use of Business information systems
to generate and disseminate desired information throughout the organisation.
Assume that you have been recruited as the associate business analyst for the
organisation and you have been asked to prepare a management report to the top
management by highlighting the importance of using information systems to generate
productive results.
In this report you are required present the profile of the organization indicating the
vision, mission, objectives and organizational chart.
Activity 01
• Discuss the information needs of the main functional departments of the
selected organisation and compare different processing activities that happen
within the functional departments. your answers should be supported with the
examples taken from the selected organizational context.
Activity 02
Activity 03
LO2: Discuss the types of information systems that are used within all levels of an organisation.
Activity 01……………………………………………………………................14
History of HSBC………………………………………………………………….14
Vision of HSBC………………………………………………………………….15
Purpose of HSBC…………………………………………………………………16
Values of HSBC…………………………………………………………………….16
Main functional departments of HSBC and compared the different processing activities that
Activity 02……………………………………………………………………………39
The information needs required at the operational, tactical, and strategic level of the
organization…………………………………………………………………………….43
Analyzation on how the effectiveness of each management level can be improved with the
Activity 03………………………………………………………………………………46
organization……………………………………………………………………………….46
purposes…………………………………………………………………………………….47
Analyzation the constraints that the organization may face when gathering data and
Activity 04………………………………………………………………………………...49
Justification on the ways in which an organization can obtain competitive advantage within a
global market…………………………………………………………………………….61
For this task, I've decided to use HSBC bank. The Hong Kong and Shanghai Banking
Corporation is known by the abbreviation HSBC. The idea of a regional bank serving clients
worldwide formed the foundation for HSBC. HSBC started operating in Hong Kong in
March 1865, helping to finance transcontinental trade between Europe and Asia. Around 40
million individuals, businesses, and high-net-worth clientele are served by them throughout
63 nations. Peter Wong serves as the company's CEO. Thomas Sutherland started HSBC.
History of HSBC
The founders of HSBC had a simple and basic goal when they established the bank in 1865:
to advance local and global trade, "which has grown so much wider and more diverse than in
adding new branches and creating money, we also invented financing for public works
projects. After enduring terrible financial storms at the turn of the century, we emerged as a
powerful financial force in Asia. HSBC had to overcome a number of challenges in the first
fifty years of the 20th century. first entering Asian markets, but during the Great Depression,
we suffered alongside our customers. Branches were taken over, funds were liquidated, and a
lot of workers who worked overseas were imprisoned during the Second World War. We had
huge stores and were wise enough to survive. HSBC assisted Hong Kong in remaking itself
environment. In the fifty years that followed, as new technologies changed the workplace, the
bank expanded and underwent diversification. In the Americas and Europe, important
acquisitions were completed, and the hexagon brand was used to unify all of our global
operations. The initial goals of the founders of the modern HSBC have been well surpassed.
Nevertheless, despite the bank's expanded size and scope, our philosophy hasn't changed
much over the years: we still look for opportunities to develop and offer those to our clients.
(HSBC.com, unknown)
Vision of HSBC
"Our goal is to become our clients' preferred global financial partner."- Group Chief
We are bringing together the individuals, ideas, and resources that foster development and
growth, assisting in the development of a better future for our clients, employees, investors,
Values of HSBC
Speaking different languages from birth, they both. They have been shaped by a variety of
experiences, traits, and voices; they are essential to who they are and how they operate. They
can better represent the worlds of their consumers and communities and provide for them if
they are more diverse and empathic. They therefore encourage inclusivity. They eliminate
Customers have a unique range of alternatives available to them. And only if they truly unify
across borders will they be able to fulfill this promise in its fullest. along with our customers
and business partners. together, both as a company and as coworkers. they collaborate
internationally as a result. Silos are taken down. Each one depends on and helps the other.
Make space for one another when needed and as well. They are able to accomplish things
People's lives, communities, and the environment are all significantly impacted by what they
do. They are quite serious about this duty. They assume accountability for their behavior and
They also behave as coworkers by speaking out and raising issues if something doesn't look
right. Currently, they are building for the future. They are only able to thrive if they prioritize
the long-term needs of their clients, investors, and the planet that we are all a part of.
(HSBC.com, unknown)
They continuously forge forward and take initiative, creating value for our customers and
investors. In order to learn and grow, they take calculated chances and try new things, making
them entrepreneurial. By showing dynamism, they reject mediocrity. The movement is quick.
They act courageously and decisively, showing a strong sense of resolve. Additionally, they
Main functional departments of HSBC and compared the different processing activities
A department or division that carries out a certain duty is referred to as a functional area
within an organization. Because they have a common set of skills and specializations, people
divisions to manage them allows organizations to more readily combine jobs and processes
HSBC bank is divided into a number of divisions and functional areas. Below is a list of
some of them.
• Security department
• Legal department
• Card department
• Accounts department
• Auditing department
• International department
Managing the workforce at the bank is the responsibility of the human resources division.
This entails keeping an eye on their actions, speaking with them in interviews, and assessing
• Performance management
• Evaluation of job
• HR Strategy
Training and development for employees must be supervised and directed by the HR
division. New hires are typically given training by their employer to assist them get
acquainted with the company's rules and practices as well as the tools, equipment, and
Performance management
evaluations are a regular aspect of performance management for both employees and
Evaluation of job
It could be the responsibility of the human resources department to assess the organizational
job roles. Each position's title, responsibilities, and needed skills are evaluated by these
professionals, who also establish the position's obligations. The department is in charge of
updating job descriptions as necessary because positions might change over time.
HR Strategy
Strategic workforce planning is the responsibility of HR. This one affect many other HR
The department of human resources' (HR) first goal is to collect personal data on workers and
employees, including copies of their passports, birth certificates, bank account numbers,
national identity cards, and other kinds of identification. The HR department needs access to
all of the company's electronic devices, including laptops, PCs, and cell phones, in order to
performance appraisal at the end of the year, detailed data on employees' absences as well as
Security department
The physical security of the institution's staff, clients, and property was probably the focus of
a bank security officer's key responsibilities. In contrast, the role has grown to encompass
more difficult duties over time. Managing the bank's cybersecurity and data protection
Sandun Kanchana Rathnayake / SIS ASSIGNMENT/ E-130172 20
initiatives, as well as keeping an eye out for fraud on intricate transactions, have all been
• Detect and prevent illegal activity attempts, such as fraud and embezzlement.
• Monitor Transactions
Detect and prevent illegal activity attempts, such as fraud and embezzlement.
Any suspect conduct, such as an illegal transaction, will be reported to the team that
investigates and prevents cybercrime and fraud, and they will make every effort to preserve
Under the Currency and Foreign Transactions Reporting Act of 1970, sometimes referred to
as the "Bank Secrecy Act" (BSA), U.S. financial institutions are required to assist federal
law enforcement in identifying and combating money laundering. (The Bank Secrecy Act,
or BSA, of 2019)
Using a system called a cyber security evaluation tool, asset owners and operators may
assess their information and operational technologies in-depth. To enhance cyber security,
help with more than simply compliance and avoiding fines—it could also aid with the
The security department will require access to the whole database, which includes
information on employees and clients, as well as the ability to track customer behavior and
the department in charge of online banking, in order to maintain the highest degree of
safety.
Legal department
Giving legal advice on every aspect of the Bank's obligations and activities is the main duty
of the legal department. The Bank's in-house lawyers do, in fact, offer advice on a range of
helping the Bank understand how its new programs, initiatives, products, services, and
assisting the bank in understanding the legal and regulatory ramifications of its new
If a claim is made against the organization, they help to shield our company from being
In order for the bank's legal department to be able to alert the bank if the bank breaks any of
the laws or guidelines and help the bank avoid any unfavorable legal repercussions, all legal
information, and regulations relevant to the global bank must be provided. Before approving
a loan on a property or completing a purchase, a bank's legal department must confirm the
The vital IT infrastructure of the bank is created and maintained by the IT division. In
addition to assessing the bank's exposure to IT risk, ensuring the effectiveness of the bank's
IT security measures, and providing IT training to the bank's workforce, professionals in the
In addition to other things, the IT department is in charge of maintaining all software and
hardware, including laptops, servers, switches, and routers. To avoid server failures, keep
A system update will be used to fix any vulnerabilities found by the IT team after they have
been identified.
Among the most significant duties of the IT department are the creation and upkeep of
To set up network setups correctly, the bank's IT staff need a comprehensive list of IP
addresses. In order to ensure that there are no errors and that all systems are operating at
their best, the IT staff will have vital access to every workstation. It will be beneficial for
maintenance if the IT team requires that the employees work distinct hours.
Card department
and credit card transactions. All concerns involving credit and debit cards are under the
The card department should arrange for installment payments for the cardholder's purchases
Online credit/debit card fraud has increased significantly in recent years. Using the
assistance of the security department, the card department will return the cardholder's
Debit and credit cards are often questioned by customers, and it is part of their duty to
information and card information, except the cardholder's PIN. In order for the card
information is required.
Accounts department
The section of the bank responsible for the creation of financial statements, the upkeep of
the general ledger, and the payment of bills is the accounting department.
• Financial Controls
A client's financial arrangements must be monitored for financial activity, and all essential
The accounting department generates the financial statement for the passbook and
Financial Controls
accounting rules, are intended to ensure compliance with regulations and avoid theft.
Sandun Kanchana Rathnayake / SIS ASSIGNMENT/ E-130172 26
Assuring the accuracy of all administrative processes is one of the Controller's major
responsibilities.
In order to compile a financial statement for the bank, the accounts department needs
account information, customer transaction reports, and international bank rules and
application programming interfaces (APIs) that permit the composition of services across
institutions to offer financial products and streamline transactions. Internet, mobile, and
automated teller machines are all ways that customers may access their bank accounts.
• Transaction of money
• Bill payments
Transaction of money
Money may currently be sent online. The Digital Banking division is in charge of enabling
any electronic transfers of monies that a client wants or wishes to make to another account.
Bill payments
Paying your bills online is possible with digital banking. If a consumer chooses to pay their
phone, power, or water bill using digital banking, one of the duties of the Digital Banking
Consumers are given OTPs by the department of digital banking to make sure their
In order to provide the OTP and information on money transfers and bill payments, the
account must have all necessary information, including the client's postal address and phone
number.
Auditing department
The audit section of a bank assesses the bank's risk management, control processes, and
operational activities. They also ensure that the bank's policies and procedures are always
making an evaluation of the bank system's vulnerability to make sure its upkeep is
manageable.
The report from all departments to ascertain if the bank is conforming to the global bank's
Risk management
The risk management team of the bank is in charge of day-to-day risk management. The risk
management division is now a crucial element of the Bank's risk management framework.
Making ensuring the bank's internal control system includes all necessary steps for risk
• Analyzing risk
• Decision making
Analyzing risk
The description of risks and their related costs is aided by the analysis of risks,
opportunities, and actions. Indicators must be created, maintained, and upper management
Decision making
Choosing the best course of action or rating the options in light of a certain risk management
objective are two examples of the decision-making process involved in risk management.
Finding possible hazards is just one of the tasks involved in risk management. A key
Strategies for current and future risk assessments, the economy of the nation as it relates to
International department
The foreign exchange activities of a bank are handled by the international department in
addition to transactions. Managing the purchase and sale of foreign currency as well as the
flow of money into and out of the business is the primary responsibility of the forex
department.
• foreign exchange
foreign exchange
Foreign exchange is the process of exchanging currencies between nations at the current
market rate. Let's examine what dealing with foreign money actually entails in more detail.
The currencies of various nations are all distinctive. Foreign exchange is the process
through which currencies from several nations are exchanged for one another.
Detailed information about the customer's account as well as the international account,
including exchange rates and laws on international transactions that are unique to each
country.
The bank's many departments are connected to one another for the sake of efficiency and
cohesion. Since all HSBC Bank branches follow the same procedure, consistency is
maintained. It is conceivable that if we engage in functional tasks, these three elements will
1.a contrast between the auditing, risk management, and accounting divisions. It is possible to
infer from the introduction their information needs and operational activities in these three
areas. Therefore, the accounting division is in charge of managing stocks and loans, while the
risk division makes the decision about whether or not to provide the loan depending on the
status of the national economy. The audit division looks for loopholes, while the risk
management division looks for external issues and reports on both. In essence, these two
departments do the same tasks. Consequently, the bank has to have these reports.
2.The legal and foreign departments are contrasted. Customers who wish to transfer money
abroad, whether local or foreign, can do so by contacting the international department. Legal
counsel on all facets of the Bank's operations and activities is what the legal department is
responsible for providing. International bank law is the area of overlap between these two
divisions. While the legal department has expertise in all areas, the international department
depends on the IT department for banking system maintenance. The building of facilities for
the division responsible for digital banking, the development of software for the division
responsible for services' management of cyber security, etc. While the support disk service is
In a bank, you could find comparables. Separately, no portion can endure. The benefits of this
might be felt by all of the departments. To support the activities of another division, one
also encompass the technological analysis and structuring of that information. It is possible to
Management uses a decision support system at the tactical level. The results of this strategy
provide quick judgments on several criteria. Consequently, managers and executives at the
operational level may be given access to future data. The previous two information systems
were only able to use internal data, however this decision support systems (DSS) provides
access to external data and information. It has a substantially greater capability for processing
information than its forerunners. Report creation, data appraisal, result predictions, danger
detection in the future, and drill-down capabilities are just a few of the numerous applications
of decision support systems (DSS). Don't just give written details; also include pictures.
Management information systems offer performance data for planning, regulating, and
When management information systems (MIS) were first developed, they were done so to
Chart creation, change tracking, and report authoring are all tasks that may be accomplished
by a management information system. The ability to generate reports for clients is required.
Management information systems (MIS) success depend heavily on data summaries obtained
system for supporting executives (ESS) a framework developed to support company directors
and senior executives in their strategic decision-making. Given that companies want to know
how to achieve social goals, they frequently use external data, which this system can analyses
both fast. A great number of functions for data administration are provided by the executive
control, and crisis management may be provided by this method. The executive support
system (ESS) offers a very user-friendly interface and graphical context, as well as services
for strategic planning, organizing, managing crises, and defining future direction. In order to
Transaction processing systems, which are essential business systems, are a major factor in
an organization's capacity to carry out regular activities. Just a few examples are systems for
pricing, payroll, and financial transactions. TPS activities include, for instance, input and
output, basic data processing, data editing, correction, modification, recording, data storage,
and productivity boosting. Crossings are a common procedure for which TPS is intended to
be used.
information system that increases office productivity. Nowadays, everyone is aware of how
Office automation systems (OAS) consist of networked hardware and software. A number of
office automation technologies are being used to fulfill business and communication tasks
that were formerly carried out manually or in several locations, such as strategy planning and
letter writing. Any organization may save overhead expenses and improve productivity by
recording.
Sandun Kanchana Rathnayake / SIS ASSIGNMENT/ E-130172 41
Business information systems (BIS)
Business data is analyzed and organized technically through the use of "business information
systems" (BIS). The vast majority of businesses substantially rely on computer systems and
networking infrastructures to run their business information systems (BIS). It is simple to see
how computerized BIS may improve accuracy, precision, and dependability. As a result of
their ability to be educated to do a variety of tasks, they are also incredibly flexible.
An organization's three primary levels are strategy level, tactics level, and operations level.
Therefore, depending on the situation, different roles and duties are required. Systems for
processing systems (TPS), are used at the operational level. The majority of the information
gathered by these systems consists of regular transactions and supplementary data that is
gathered every day, every week, or at most once every month. The operational level does not
require in-depth analytical data. As lower-level managers could require reports for staff
management, MIS is nonetheless preferred to TPS. DSS is utilized at the operational level of
businesses because intermediate managers and executors want more analytical data and
summaries for their tasks. The strategic level integration of ESS and data warehouses is
required due to the requirement for a strategic planning system among executives and
directors. Since ESS will take care of everything for them, they don't even need to do
organizational levels.
The information needs required at operational, tactical, and strategic level of the
organization.
An organization's top leadership teams engage in strategic planning. The bank's chief
executive officer (CEO), other senior executives, and the board of directors evaluate the
bank's overarching goals, plans, and strategies at this level and monitor how effectively those
things are doing in actuality. We now examine the perspectives that the legal, economic, and
competitive business settings have in more detail. Although long-term goals and a
compilation of all relevant data have been made, the decision-making process is currently in
flux. The HSBC executive level consists of the CEO, board members, and other senior
executives. They maintain oversight over the institution to make sure it runs in line with its
long-term objectives. To prepare for and accomplish their objectives, they made use of data
competition analysis, future economic forecasts, total deposits necessary, and vital capital
equipment.
The tactical level within an organization is the intermediate level. This stratum is led by
executives and managers from the middle class. Defining, categorizing, and translating the
organization's goals into strategies is the responsibility of middle management. They research
approaches to developing and managing budgets and plans that are consistent with the
overarching corporate strategy. Because of this, they deliver a range of papers to the business,
such as timetables and short-term strategies. The strategic and operational are connected by
this layer. The decision-making process has now been given some structure. Typically,
regional managers or higher work at HSBC level positions. HSBC has your back when it
comes to having a global footprint. For this reason, data on branches, cash flow forecasts,
budget management reports, return on assets, and staffing are needed at the tactical level.
Every organization's operational level, often known as the lowest organizational level, serves
as its base. The focus here is on the continuing duties that must be fulfilled. The final
decision on how things get done on a daily basis belongs to the operating managers and the
members. Goals, budgets, and deadlines are some of the larger considerations that operations
managers make. Each job is well defined at this point, and there is a structured process for
making choices. Local management and staff from the many national branches make up the
operational level of HSBC Bank. HSBC operates a sizable branch network abroad. They act
on behalf of the bank while dealing with clients, tracking donations, managing daily
operations, etc. They need access to data like average task completion times, consumer
spending patterns, objective and budget restraints, intervention in terms of terms and
operational level.
Analyzation on how the effectiveness of each management level can be improved with
An information system that is dependable and easy to use must be able to support all
Recording daily transections and the instructions that go with them is the company's
operational aim. The necessity for temporary protected status among entry-level employees
stems from this. Customers at HSBC, for instance, are required to enter their name, account
number, and the amount they wish to send when making a wire transfer. Upon entering these
details into the TPS system, the appropriate transfer will be handled. operating effectiveness.
To collect and arrange data at the operational level, the MIS employs the same techniques as
before. An operational-level manager who is using the MIS may create a report that examines
the financial health of the bank. MIS is therefore a suitable tool for this use. Each has distinct
circumstances at the operational and tactical levels. They start by looking within to get a
general knowledge of who they are, then they turn to the outer world to get motivation for
action. They then decide on their next course of action. Although DSS can help with this
decision, MIS and TPS are unable to. Effective tactical operations require DSS. Top-level
management frequently uses ESS for strategic planning as opposed to DSS because of the
latter's speedy data evaluation and insight-providing capabilities. The proper information
system will be implemented at the proper level of the company for a successful business. If
so, not only will the company achieve its goals, but it will also acquire a competitive
advantage.
How information can be used for effective decision making and forecasting in the
organization
which are all integral parts of an organization's overall operations. Data that is both accurate
and valid has been checked and is thus error-free, in contrast to data that is only valid.
Because of this, it's essential for all firms to have rapid access to such documents and data.
While certain information may be more relevant today than in the future for analysis and
planning, other data may be more appropriate. facts and pieces of information that
collectively make up the past. Therefore, any old information or data that the organization
will never require again should be disposed of. In that case, it is possible that the business
With the use of historical and current data, forecasting enables firms to set reasonable and
provide you the ability to monitor your progress and alter business procedures as required to
stay on course. The ability to make decisions about where to spend money and resources on
specific products and services or internal areas, including recruiting and strategy, is made
Information systems are mostly focused on the relationship between information systems and
decision-making.
Information systems are primarily used to provide accurate and timely data to decision
successful business' ability to enhance operations, achieve goals, and reap profits. In
query tools, and other components. The most important component for making wise decisions
More accurate forecasting techniques may lead to higher earnings. When planning for the
future, businesses utilize forecasting to delve into the past and present. The viability of the
company worries bank executives all the time. They require solid data in order to make
accurate forecasts.
The need for all managers and other decision-makers to have access to a management report
is evident. As a result, ESS, DSS, and MIS all have reporting capabilities. For the purpose of
offering reporting services, businesses could create specialized IT infrastructures. The board
of directors and senior executives use the management report to assess how well the business
is run. A strategic-level management report that ESS creates details the collective progress of
several management domains. It may also present data via graphs, tables, bar charts, line
charts, and pie charts, depending on the user's requirements and information filtering
preferences. Once a year, on average, ESS will report. A company's annual report contains
some very significant information. The yearly report makes a point of highlighting
management's ability to plan and coordinate numerous commercial efforts. use in the
management DSS report to achieve strategic objectives. Finding lucrative sites is made easier
by using DSS management reports. The data suggests that companies may deploy their
objectives and other resources wisely. Daily management reports that are of lower relevance
may be produced by the MIS. As a result, it makes it easier to follow the progress of branch-
accurate. By utilizing the data system, the objective is to enhance management reporting.
Analyzation the constraints that the organization may face when gathering data and
Financial sector banks collect client data in accordance with accepted procedures and
standards. They are able to obtain appropriate information as a result, and they encounter less
obstacles when looking for facts and information. They've had trouble gathering data and
information because of a variety of campaigns and other initiatives unrelated to the banking
industry. Let's say, for illustration purposes, that the bank is looking to collaborate with a
reputable company. The bank will be limited in its ability to obtain the information it needs
on other firms as a result of this arrangement. All firms have their own information security
policies, despite the extensive collaboration that takes place between them. As a result,
financial institutions are forced to change the rules and specifications governing data. The
gathering of strategic intelligence may suffer as a result of international law and World Bank
norms and regulations. To comply with these laws and norms, the bank must thus make
modifications.
When it comes to organizational growth, there are many different strategies. Its performance
can be enhanced by using all of these models together. The Porter model of competitive
advantage and the Wiseman method to strategic planning are two instances of this. As
companies work toward their long-term objectives, these models could assist them in deciding
Porter's Model
A straightforward yet effective method is to utilize Porter's Five Forces to identify the main
sources of competition in your industry or company. Understanding the forces at play in your
sector will enable you to alter your strategy, boost your profitability, and preserve your
competitive edge. While avoiding more mistakes, you might profit from a favorable position
• Competitive Rivalry.
• Supplier Power.
• Buyer Power.
• Threat of Substitution.
Competitive Rivalry
Porter's Five Forces analysis looks at your competitors' diversity and caliber in the first force.
Take into account the number, kind, and quality of your rivals' products in relation to your
own. Businesses attract customers by aggressively cutting prices and introducing high-impact
marketing initiatives in a market where there is fierce competition. Because of this, suppliers
and If clients believe they aren't getting a fair bargain from you, they may decide to shop
around. On the other hand, you'll probably have strong competitive advantage and sizable
earnings when there isn't any rivalry in your industry and no one else does what you do.
(MindTools.com, n.d).
Supplier Power
Suppliers have more clout if they can only increase their prices or lower the quality of their
goods. They have enormous supplier power if they are the only ones who can offer a certain
service. You should think about the expense of switching providers, even if you are able to.
The easier it will be to switch to a more affordable provider, the more alternatives you have.
On the other hand, if there are fewer suppliers and you rely heavily on them, their position
will be reinforced, and they will be able to charge you more.(MindTools.com, n.d).
Customers in a market have "buyer power" if there are relatively few of them compared to
the number of suppliers. This means that they could be able to switch to new, less priced
competitors without much difficulty, which might eventually result in price reductions.
Amount of their orders and moving to a competitor's price should both be taken into
account. Dealing with a small number of informed customers gives them more clout. When
there are numerous customers and little competition, buyer power, however, declines.
(MindTools.com, n.d).
Threat of Substitution
This is a reference to the possibility that your clients may find another provider of the same
services. It may cost less, be better, or perhaps both. The risk of replacement rises when
consumers might simply switch to a different product or when an unexpectedly new and
Your position might be affected by potential rivals' capacity to enter your market.
Competitive erosion may occur quickly if rivals can enter your market with little investment
and effort and effectively compete, or if your key technology is not adequately protected.
But if you face significant and persistent barriers to entry, you might be able to hold onto a
favorable position and legitimately take use of it. These challenges include hard-to-find
suppliers who aren't already committed to rivals, complicated distribution networks, high
initial capital costs, and the inability to find suppliers. Through economies of scale, big,
advantage over newcomers. It might also be a significant barrier to entry if customers find
Generic Strategies
Because they may be used with products or services from all industries and by organizations
of all sizes, three tactics are included in generic strategies. They were first mentioned by
Michael Porter in his 1985 book "Competitive Advantage: Creating and Sustaining Superior
Performance. “Porter referred to the fundamental strategies as "Cost Leadership" (no frills),
(providing a specialized service in a niche market). The Mind Tools content team, n.d.). He
then divided the Focus approach into "Cost Focus" and "Differentiation Focus."
The general Porter tactics are ways to create the "edge" that allows you to outsell your
competitors. They are ways to get a competitive advantage. There are two main methods to
accomplish this in a cost leadership strategy. boosting profits by reducing expenses while
maintaining industry-average pricing and expanding market share by lowering prices while
By setting the standard for cost in your market or sector, you are using the cost leadership
strategy. Being among the cheapest manufacturers is insufficient because you open yourself
up to attack from other cheap producers who could undercut your pricing and hinder your
Making your products or services stand out from those of your competitors is the process of
differentiating them. The nature of your industry and the products and services itself will
determine how you go about doing this, but you'll likely integrate features that customers
value, functionality, durability, support, and brand image. Companies require strong
services, and effective sales and marketing to get the market to understand the benefits
techniques in several market segments might attack businesses on multiple fronts if they
Employing focus strategies, businesses concentrate on a small number of niche markets and
create low-cost or well-defined products for those markets by understanding the dynamics
of those markets and the unique needs of their customers. They frequently engender high
brand loyalty among their consumers due to their excellent customer service in the
particular market they serve. Due of this, their market segment is less appealing to
Focus strategy has been defined as the main strategy, much like with wide market
strategies: Sometimes, focus is not enough. Whether you decide on a Cost Focus or
Differentiation Focus strategy, the secret to a generic Focus approach's success is to make
sure that you provide value by filling a particular market niche. If your company is too small
succeed (doing so puts you at danger of losing business to larger, more resource-rich broad
A value chain is a set of activities that a company carries out to create value for its
customers. In order to evaluate all of their activities and ascertain how they are connected;
firms might utilize Porter's generic value chain. The way value chain activities are carried out
has an impact on expenses and revenues, thus using this tool can help you determine the
sources of value for your company. Porter's Value Chain places more emphasis on systems
and the conversion of inputs into consumer-purchased outputs than it does on departments
or accounting cost types. By categorizing them into primary and secondary tasks, Porter
created a chain of operations that all businesses must follow. (Mental Tools, n.d.)
Primary Activities
• Inbound logistics
• Operations
• Outbound logistics
• Service
Inbound logistics
The process of acquiring, storing, and distributing raw materials internally is referred to as
"inbound logistics" in this context. Creating value in this situation depends heavily on your
These processes are responsible for converting inputs into finished products that are sold to
customers. The operational systems you use provide value in this way. (Mental Tools, n.d.)
Outbound logistics
Collecting, storing, and distributing systems are some of these, which may be internal or
The methods you employ in marketing and sales are meant to persuade clients to choose
you over your competitors. Your advantages and how well you convey them determine their
Service
These are the procedures involved in maintaining the worth of your item or service for your
Support Activities
• Procurement (purchasing)
• Technological development
• Infrastructure
To get the necessary operating resources, the organization engages in this activity. The best
A company's hiring, training, motivating, rewarding, and retaining of its staff is done through
the process of human resource management. Employing efficient HR practices may provide
Technological development
all covered by these operations. Value may be created through reducing information
technology costs, staying current with technology, and maintaining technical skill.
Infrastructure
These are the tools and services a business needs to carry out routine tasks. Infrastructure
In his work with GTE and other businesses, as well as in his position as President of
Competitive Applications, Inc., Charles Wiseman has utilized the modern ideas of strategic
various useful ways, and his book, Strategy and Computers: Information Systems as
Competitive Weapons, gives several examples of strategic systems. The use of information
and services lies not in the degree of technological sophistication they possess or the format
of the reports they produce, but rather in the part these information systems play in the
firm's planning and execution of strategies for gaining and maintaining competitive
advantage. According to Wiseman, using information systems may not necessarily give a
firm a competitive edge, but they may still be a crucial part of that organization's overall
strategic plan. One cannot discover strategic systems by accident. Strategic information
remain competitive. There must be room for both business and information management.
He continues by saying that competition may now be fostered via the use of information
important to continue with information technology-based strategic thrusts since there will
geographical expansion, etc., these motions are equally important. Planning is essential for
major initiatives like acquisition and significant business partnerships. The methods of
Business Systems Planning (BSP) and Critical Success Factor (CSF) are used to create
information architectures and identify conventional information systems that are primarily
used for planning and control. A fresh framework or model is necessary for SIS
identification. The conventional approach works with the organization's outwardly visible
structures. The development of new connections that expand the range of expectations
and is extremely difficult to put into practice. But most inventions just involve looking at the
Differentiation thrust.
It is beneficial to focus on areas where the service does not live up to the expectations of the
client.
Increased competition and lower pricing are the objectives of this sort of effort.
Innovation thrust.
Such a push seeks to accomplish something remarkable, such as the launch of new goods
Growth thrust.
Increasing the company's scope is a goal of this sort of push, which could involve raising
The goal of this type of effort is to grow the company through mergers and acquisitions so
Businesses may develop highly sought-after yet simple-to-repeat services or products that
appeal to niche markets by exploiting existing IT infrastructure. 2013's Thakur the company
has the opportunity to corner the market with this barrier to entry for new banks. In doing so,
the corporation can pave the way for its entry into foreign markets, which might boost its
reputation and financial success. Because of its competitive advantages, the bank may be able
Value chain technology leverage focuses on figuring out where information systems might
have the most strategic effect inside a business in order to better carry out competitive
objectives. This idea holds that in order to use IT to gain an advantage over the competition,
it is necessary to identify the best leverage points. 2013's Thakur the operations of a firm may
be enhanced in a variety of ways by the use of IT. Many companies are turning to IT efforts
to help them stand out from the competition in order to compete successfully in the modern
global market. with the purpose of enhancing the brand's popularity, standing, and ability to
their sales and marketing strategies, information systems also give them a competitive edge.
In these systems, existing data is regarded as a resource. For example, a bank may utilize its
databases to track client transactions and spot particular market segments. (2013 Thakur)
global provider of banking and financial services. Their global businesses, Wealth and
Personal Banking, Commercial Banking, and Global Banking & Markets, provide services to
close to 40 million customers. In addition to branches in North and South America and the
On a worldwide scale, HSBC may be a highly prosperous company. Such transactions are
facilitated by HSBC's global network of correspondent banks and agents. They have strong
connections in the world of business. Trade financing and remittances from overseas can both
be directly credited with this accomplishment. Most people can access their money from any
branch since they have an HSBC account. It is not surprising that the banking sector is
dominated by digital activity and electronic transactions given the number of countries in
advancements are the driving force behind this, HSBC aspires to be the leading bank in the
pertinent industry. Having an internet banking system that permits international money
transfers to any country sets this bank apart from the competitors. The first two prerequisites
are also satisfied. Facial unlocking is used in biometric authentication to increase security.
Your account balances are accessible through the software, which also tracks your earnings
and outlays. Any person you know or have saved as a payee will get money immediately.
From within the app, you may pay invoices and transfer funds to local banks or other HSBC
accounts. Customers of the HSBC bank in Sri Lanka who also have accounts with the
institution in other nations may use the international banking option. There won't be any more
goods need to be taken to the bank thanks to the built-in security system. By creating this app
in compliance with international standards and laws, HSBC might obtain a competitive edge
on a global level.