Information Systems for Strategic AdvantagePresentation Transcript
Information Systems for Strategic Advantage BUS 782
Strategic Information System
Information systems that provide a firm with competitive products and services which give it a strategic advantage over its competitors in the marketplace.
Information systems that promote business innovation, improve operational efficiency .
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Strategic Advantage and Strategic Necessity
Strategic advantage refers to obtaining a sustainable competitive edge over competitors. The ability to obtain a greater than normal return on investment.
A strategic necessity is a system that must be installed to remain competitive and stay in business.
Yahoo Auction site is retired
Ability to search and view items, view seller info and bid history, place a bid, online payment.
Ebay store /ProStore
SkyPe : http://pages.ebay.com/skype/
Special SkyPe services for eBay sellers and buyers
Others: Special niches
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Being the First
Internet Search Engines:
New Way of Doing Business
America West website -- http://www.americawest.com/awa/
Select your seats
Web check-In (Travel Tools and Services)
Travel:Yahoo vs Expedia
Real Estate:Century 21 vs ReMax
Buy: neighborhood, school
Competitive forces model by Michael Porter Threat of New Entrants Bargaining Power of Suppliers Bargaining Power of Customers Rivalry among Existing Competitors Threat of Substitute Products
Cost leadership strategy :
Become a low cost producer of products and services
Find ways to help suppliers or customers reduce their costs
Product differentiation strategy.
Innovation strategy: Finding new way of doing business , enter new market .
Alliance strategy: Establish alliances with customer, suppliers, competitors, other company.
Interorganizational IS, EDI, automatic inventory replenishment system
Creating switching costs
make customers dependent on the continued use of innovative IS.
Raising barriers to entry
discourage competitors from entering a market
The Value Chain and Strategic IS
It views a firm as a series, or chain, or network of basic activities that add value to its products and services, and thus add a margin of value to the firm.
Margin is the value of the firm’s products and services less their costs, as perceived by the firm’s customers.
Administration, human resource management ,etc.
Inbound logistics, operations, outbound logistics, marketing, etc.
The Value Chain Administrative Coordination & Support Services Human Resource Management Technology Development Procurement of Resources Inbound Logistics Operations Outbound Logistics Marketing and Sales Customer Service Competitive Advantage
Becoming an Agile Competitor
Agility in competitive performance is the ability of a business to prosper in rapidly changing, continually fragmenting global markets for high-quality, high-performance, customer-configured products and services. An agile company can:
1. Make a profit in markets with broad product ranges and short model lifetimes
2. Process orders in arbitrary lot sizes
3. Offer individualized products while maintaining high volumes of production.
IT and Agility
Agile companies depend heavily on information technology to:
1. Enriched its customers with customized solutions to their needs.
2. Cooperate with other businesses to bring products to market as rapidly and cost-efficient as possible.
Electronic Exchange: An electronic forum where manufacturers, suppliers, and competitors buy and sell goods.
Example: WorldWide Retail Exchange (WWRE)
Fedex Package Tracking System
By using the package tracking system and making the package progress visible to the customer, Fedex changed the way the packaging business operates. The tracking system helped Fedex manage its package delivery efficiently and provided customers with a way to know when to expect their packages. After Fedex introduced the system, every company in the packaging business, including the US Postal Service, were forced to offer the service.