chapter 3 strategic information systems for competitive advantage
Post on 19-Dec-2015
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TRANSCRIPT
Chapter 3
Strategic Information Systems for Competitive Advantage
A Good Strategy?
Why Have a Strategy?
Does a business/organization need a strategy?
What makes a good strategy? Does IT affect a strategy?
If so, how?
Elements of Strategic Management Long Range Planning
Outside scope of this course Response Management Proactive Innovation
Information Technologies Our focus
Where Does a Strategy Come From?
Mission
Goals
Organizational strategy
Functional strategies
Finance Marketing Operations
Tactics Tactics Tactics
Finance operations
Marketingoperations
Operationsoperations
What is a Mission?
Mission: The reason for existence of an organization
Mission Statement: A statement of purpose that serves as a guide for strategy and decision making
Should answer: What business are we in? Where should we be in 10
years? Who are our customers? What are our basic beliefs? How do we measure success?
IBM Mission Statement
We create, develop and manufacture the industry’s most advanced information technologies, including computer systems, software, networking systems, storage devices and microelectronics. We have two fundamental missions: We strive to lead in the creation, development, and
manufacture of the most advanced information technologies. (Performance objective & Business definition)
We translate advanced technologies into value for our customers as the world’s largest information services company. Our professionals worldwide provide expertise within specific industries, consulting services, systems integration, and solution development and technical support. (Business definition, customers)
Goals
Goal: Provides substance to the overall mission. More specific
Example: 3M Mission: “To solve unsolved problems innovatively
…” Possible Goal: Our corporate goal is to have 30%
of sales come from new products.
Distinctive Competencies
Distinctive Competencies: Special attributes or abilities possessed by an organization that give it a competitive edge
OR
Unique resources and strength of an organization that reflect the collective learning of an organization
Examples of Distinctive CompetenciesPrice Low Cost Half.com, Wal-Mart
Quality High Performance Design
Amazon
Time Rapid Delivery
On-Time Delivery
Office Max, Staples
Flexibility Variety, Volume Amazon
Service Superior Customer Service
Dell
Location Convenience BestBuy, McDonald’s, 7-Eleven
The Role of IT
IT creates applications that provide strategic advantages to companies
IT is a competitive weapon IT supports strategic change, e.g.
reengineering IT networks with business partners IT provides cost reduction IT provides competitive business intelligence
Competitive Advantage in the Web Economy
Competitive Strategy
Search for a competitive
advantage in an industry, which leads to control of the market
Competitive Advantage
Look for a competitive
necessity, which will help your
company keep up with the
competitors
Sustainable Strategic
Advantage
Maintain profitable and sustainable
position against the forces that
determine industry
competition
Analyzing Competitiveness
Well-known framework is Porter’s competitive forces model (1985) Used to develop strategies for companies to
increase their competitive edge Demonstrates how IT can enhance
competitiveness of corporations Recognizes 5 major forces that could endanger a
company’s position in a given industry
Porter’s 5 Competitive Forces The threat of entry of new competitors The bargaining power of suppliers The bargaining power of customers (buyers) The threat of substitute products or services The rivalry among existing firms in the
industry
Competitive Forces Diagram
Porter’s Model in Action
Step 1: The players in each force are listed Step 2: An analysis is made which relates
Porter’s determining factors Step 3: A strategy is devised to defend
against these factors Step 4: Support information technologies are
employed
Porter’s Model in Action, cont’d.
Case: DaimlerChrysler
Problem: In 1993, Chrysler lost $2.6 billion because its
program with parts suppliers was failing Solution:
Suppliers began using Lotus Notes/Domino Measurement reports to static HTML pages E-Procurement exchange at Covisint
Results Chrysler saved millions of $
Porter’s Value Chain Analysis Model Primary Activities
Inbound logistics (inputs) Operations (manufacturing and testing) Outbound logistics (storage and distribution) Marketing and Sales Service
These 5 activities constitute a supply chain
Value Chain Model, cont’d.
Support Activities Firm infrastructure Human resources management Technology development Procurement
Value System
A firm’s value chain is part of a larger stream of activities, which Porter calls a “Value System” Includes the suppliers that provide the necessary
inputs AND their value chains Applies to both products & services, for any
organization, PUBLIC or PRIVATE Is the basis for the Supply Chain Management
Functional Departments and the Value Chain
Value Chain Model, cont’d.
The Value System Model is used to: Evaluate a company’s process and competencies Investigate whether adding IT supports the value
chain Enable managers to assess the information
intensity and role of IT