Information Systems for Strategic Advantage
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Information Systems for Strategic Advantage

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  • The Value Chain Concept , developed by Michael Porter, is useful for helping you to decide when and how to apply the strategic capabilities of IT. The Concept views a firm as a series, or chain, of basic activities that add value to a firm’s products and services, and thus add a margin of value to the firm. In this way some activities are seen as primary processes, while others are seen as support processes that provide direction and support for the specialized work of primary activities. Thus, the framework highlights where competitive strategies can best be applied in a business. For each activity, the role of strategic information systems (SIS) can contribute significantly to that activity’s contribution to the value chain. For example: Administrative Coordination & Support Services . The key role of SIS here is in enterprise communication and collaboration. Human Resources Management. SIS role: Career development Intranet for employees. Technology Development. SIS role: Computer-Aided Design Extranets with partners. Procurement of Resources. SIS role: E-Commerce Extranet with suppliers. Primary Activities . These activities directly contribute to the transformation process of the organization. Inbound Logistics. SIS role: Automated Warehousing, JIT. Operations. SIS role: Computer-Aided Manufacturing. Outbound Logistics. SIS role: Online Data Entry. Marketing and Sales. SIS role: Interactive Targeted Marketing. Customer Service. SIS role: Customer Relationship Management. Teaching Tips This slide corresponds to Figure 2.9 on p. 61 and relates to the material on p. 59.

Information Systems for Strategic Advantage Information Systems for Strategic Advantage Presentation 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 .
  • Movie Rental
    • Netflix: Early player
    • Blockbuster:
      • Rent Online - Return By Mail Or In-Store with BLOCKBUSTER Total Access
      • In-Store Exchanges
    • Netflix:
      • With Netflix, you will be able to watch movies instantly on your PC at no additional cost. The number of hours varies by plan. On our most popular plan, the 3 at-a-time unlimited plan for $16.99 a month, you will also be able to watch 17 hours of movies and TV episodes instantly on your PC - all in addition to your regular "by mail" selections!
  • Photo Printing
    • Kodak: http://www.kodakgallery.com/Welcome.jsp
      • Upload photos
      • Online album
      • View and Edit
      • Buy prints
    • Walgreen: http://photo.walgreens.com
      • Order professionally-developed wallet sized, 4x6", 5x7", 8x10", or poster prints of any photo in your account, on Real Photographic Paper in glossy finish. You can pick them up at a Walgreens store near you an hour later, or have them shipped straight to you!
  • 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.
  • Auction sites
    • Yahoo Auction site is retired
    • Ebay
    • Necessity:
      • Ability to search and view items, view seller info and bid history, place a bid, online payment.
    • Advantage:
      • Ebay
        • Ebay store /ProStore
        • PayPal
        • Micropayments
        • SkyPe : http://pages.ebay.com/skype/
          • Special SkyPe services for eBay sellers and buyers
    • Others: Special niches
    • Amazon Associates:
      • Amazon.com's affiliate marketing program. By linking to Amazon products and services you can add compelling content for your site visitors enjoyment and receive up to 8.5% in referral fees for doing so.
      • aStore
  • Being the First
    • Internet Search Engines:
      • Yahoo, Google
      • Teoma
      • Mooter
  • New Way of Doing Business
    • Dell:
      • Customization
    • America West website -- http://www.americawest.com/awa/
        • Select your seats
        • Web check-In (Travel Tools and Services)
  • Comparing Websites
    • Travel:Yahoo vs Expedia
      • Hotels
      • Cars
      • Vacations
      • Cruises
    • Real Estate:Century 21 vs ReMax
      • Buy: neighborhood, school
      • Sell
      • Finance
      • Learn
  • 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
  • Competitive Strategies
    • 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.
    • Growth strategy: expanding, diversifying, integrating.
  • Strategic Roles for Information Systems
    • Improving business operations
    • Promoting business innovation
    • Locking in customers and suppliers
      • 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.
    • Support activities:
      • Administration, human resource management ,etc.
    • Primary activities:
      • 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.
        • Mass customization
      • 2. Cooperate with other businesses to bring products to market as rapidly and cost-efficient as possible.
      • B2B E-Commerce
        • 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.