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Information system can improve the overall performance of these buisness units by promoting synergies and core corporations.
Synergies:
The output of some units can be used as inputs to other units, these relationship lower costs and generate profits.
The advantage of IS that encourage the sharing of knowledge across buisness units:
1*enhance competency 2*help employees become aware of new external knowledge 3*help buisness levarege existing competencies to related market
Network economies
THE law of diminishing returns: The more any given resources is applied to production ,the lower the marginal gain in output,untill a point is reached where the additional input produce no additional outputs. This network prespective ,can be strategically useful,and can used for people who want to share their experience.
3.Business ecosystem
Another term for those loosely coupled but interdependent network of suppliers ,distributors, outsourcing firm, and technology manufactures. That build on the idea of the value web described earlier
To align IT with the buisness and use information system effectively for competitive advantage,managers need to perform strategic system analysis 1-what are the structure of the industry in which the firm is located?? 2-what are the buisness,firm,and industry value chains for this particular firm?? 3-Have we aligned IT with our business strategy and goals??