6. Competitive Strategies
• Porter identified four competitive strategies:
1. Broad cost leadership across industry (most
efficient)
2. Narrow cost leadership focused on particular
industry segment (most efficient)
3. Broad differentiation across industry (most effective)
4. Narrow differentiation focused on particular industry
segment (most effective)
• Goals, objectives, culture, and activities must be
consistent with strategy
• Watch video clip
8. Linkages
• Interactions across value activities that
are:
– Sources of efficiencies
– Readily supported by information systems
– Often used to reduce inventory costs
• Correspond to the connections between
processes (systems).
• Can be streamlined and/or automated
using information systems.
Editor's Notes
Which is the best competitive strategy? Hardest?Usually have to pick one. Story about my dad. Started out as a painter. Tried to be the best in both cost and quality. E-book design & distribution. Broad or narrow? Cost? Smashwords. India. Differentiation – quality – book experience – author support.
Five primarytypes of activities:Inbound logistics = Receiving, storing, and disseminating inputs to the product. (Raw materials, resources).Operations = Transforming inputs to the final product.Outbound logistics = Collecting, storing, and distributing the product to buyers.Marketing and sales = Inducing buyers to purchase the product and provide a means for them to do so.Service = Assisting customer’s use of the product and thus maintaining and enhancing the products value.Support activities apply across, indirectly. Difficult to determine value and cost. ROI. Field within MIS
Information systems can create advantage by:Enhancing existing products (manufacturing processes)Differentiating products (customer service, order turn-around, )Locking in customers (Apple) How does apple lock in customers.Raising barriers to market entry (iTunes store).Increasing profit margins by decreasing costs and decreasing errors (Automation). If people can understand what is going on in the system, they will make fewer mistakes. (vs. repetitive).
