Chapter 5: IS/IT Strategic Analysis: Future Potential

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Chapter 5: IS/IT Strategic Analysis: Future Potential

  1. 1. Chapter 5 IS/IT Strategic Analysis: The Future Potential
  2. 2. Agenda <ul><li>Criteria for effective planning </li></ul><ul><li>Business strategic and IS/IT strategic analysis methods </li></ul><ul><ul><li>Market leadership </li></ul></ul><ul><ul><li>Value Chain </li></ul></ul><ul><ul><li>Strategic option generator </li></ul></ul><ul><ul><li>Resource life cycle analysis </li></ul></ul>
  3. 3. Criteria for Effective Planning <ul><li>Situation analysis and competitive assessment </li></ul><ul><li>Evaluation of strategic options </li></ul><ul><li>Dynamic allocation of resources </li></ul>
  4. 4. Market Leadership <ul><li>By Treacy and Wiersma </li></ul><ul><li>Three paths to market leadership </li></ul><ul><ul><li>Operational excellence: low costs and consistent quality (Wal-Mart) </li></ul></ul><ul><ul><li>Customer Intimacy: precisely and tailoring products and services to target market (Home Depot) </li></ul></ul><ul><ul><li>Product leadership: product innovation (Johnson and Johnson) </li></ul></ul>
  5. 5. Question <ul><li>How can you utilize application portfolio (high potential, strategic, key operational, and support) to market leadership business strategy? </li></ul>
  6. 6. Value Chain Analysis - I <ul><li>corporate value chain = support activities & primary activities = value added = </li></ul><ul><li>Value added – cost = margin </li></ul>
  7. 7. Value Chain Analysis - II <ul><li>Support activities </li></ul><ul><ul><li>Administration and infrastructure </li></ul></ul><ul><ul><li>Human resources management </li></ul></ul><ul><ul><li>Product and technology development </li></ul></ul><ul><ul><li>Procurement </li></ul></ul>
  8. 8. Value Chain Analysis - III <ul><li>Primary activities </li></ul><ul><ul><li>Inbound logistics </li></ul></ul><ul><ul><li>Operations </li></ul></ul><ul><ul><li>Outbound logistics </li></ul></ul><ul><ul><li>Sales and marketing </li></ul></ul><ul><ul><li>Services </li></ul></ul>
  9. 9. Value Chain Analysis - Types <ul><li>Natural </li></ul><ul><ul><li>The unattainable optimum structure for the industry’s value adding processes and information flows based on what needs to be done </li></ul></ul><ul><li>Contrived </li></ul><ul><ul><li>How (far from optimal ways) thins are currently done </li></ul></ul>
  10. 10. IS/IT Role in Value Chain Analysis <ul><li>Information about the industry </li></ul><ul><li>Information about the corporate in the industry </li></ul><ul><li>Information about customers and suppliers to improve the business performance </li></ul><ul><li>Information flow in the corporate value chain for optimizing performance, reducing costs, and adding value </li></ul>
  11. 11. Question <ul><li>How can you usage application portfolio in value chain to achieve business goals? </li></ul>
  12. 12. Strategic Option Generator - I <ul><li>By Rackoff, Wiseman and Ullrich </li></ul><ul><li>To identify strategic IS opportunities in relation to three targets </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Competitors </li></ul></ul>
  13. 13. Strategic Option Generator - II <ul><li>Five strategic thrusts </li></ul><ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>Cost </li></ul></ul><ul><ul><li>Innovation </li></ul></ul><ul><ul><li>Growth </li></ul></ul><ul><ul><li>Alliance </li></ul></ul>
  14. 14. Strategic Option Generator - III <ul><li>Two strategies </li></ul><ul><ul><li>Offensive: to create or increase a competitive edge </li></ul></ul><ul><ul><li>Defensive: to reduce a competitor’s advantage or prevent a potential disadvantage </li></ul></ul>
  15. 15. Question <ul><li>Can you give an example each for the IS/IT offensive strategy and IS/IT defensive strategy discussed in strategic option generator? </li></ul>
  16. 16. Resource Life-Cycle Analysis <ul><li>By IBM </li></ul><ul><li>Four main stages </li></ul><ul><ul><li>Requirements determination </li></ul></ul><ul><ul><li>Acquisition </li></ul></ul><ul><ul><li>Stewardship </li></ul></ul><ul><ul><li>Retirement or disposal </li></ul></ul>
  17. 17. Points to Remember <ul><li>Criteria for effective planning </li></ul><ul><li>Business strategic and IS/IT strategic analysis methods </li></ul><ul><ul><li>Market leadership </li></ul></ul><ul><ul><li>Value Chain </li></ul></ul><ul><ul><li>Strategic option generator </li></ul></ul><ul><ul><li>Resource life cycle analysis </li></ul></ul>

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