Strategic And Competitive Opportunities

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  • 1.
    • Chapter 2
    • STRATEGIC AND COMPETITIVE OPPORTUNITIES
    • Using IT for Competitive Advantage
  • 2. Presentation Overview
    • Competitive Advantage Examples
    • Developing A Strategy For The Internet Age
    • Key E-Commerce Strategies
    • The U.S. Airline Industry
    • Summing It Up
  • 3. Opening Case Study Zara – Fashion Fast Forward
    • Zara sets itself apart with its computerized network that ties stores to design shops and company-owned factories in real time.
    • How can technology be used to respond quickly to shifts in consumer tastes?
  • 4.
    • Competitive advantage – a company provides a product or service in a way that customers value more than what the competition is able to do.
    • Application architect - information technology professional who can design creative technology-based business solutions.
    Introduction
  • 5. Competitive Advantage Examples Federal Express
    • FedEx – lets you access information about your packages through your Internet connection and Web browser.
    • Temporary advantage - whatever you do, sooner or later the competition duplicates what you’ve done.
    • First mover - the company who is first to market with a new IT-based product or service .
  • 6. Competitive Advantage Examples Federal Express Enter your tracking number here.
  • 7. Competitive Advantage Examples Charles Schwab
    • Schwab was a first mover in offering stock trades over the Internet, along with other online brokers such as E*Trade.
    • Schwab’s willingness to embrace the Internet early has made Schwab the largest online broker.
  • 8. Competitive Advantage Examples Dell Computer
    • Dell computer has a direct sell model that gives the company a huge advantage over any competitor.
    • Distribution chain - the path followed from the originator of a product or service to the end consumer.
    • Alliance partner - a company you do business with on a regular basis in a cooperative fashion, usually facilitated by IT systems.
  • 9. Competitive Advantage Examples Dell Computer
    • Information partnership - lets two or more companies cooperate by integrating their IT systems.
    On Your Own Looking for Opportunities Close to Home
  • 10. Competitive Advantage Examples - D ell Computer
  • 11. Competitive Advantage Examples Cisco Systems
    • Cisco Systems - a leader in utilizing the direct sell model over the Internet.
    • Business to Business (B2B) - companies whose customers are primarily other businesses.
    • Business to Consumer (B2C) - companies whose customers are primarily individuals.
  • 12.  
  • 13. Developing A Strategy For The Internet Age
    • Porter’s three frameworks are:
      • The Five Forces model
      • The Three Generic Strategies
      • The Value Chain
  • 14. Developing A Strategy For The Internet Age The Five Forces Model
  • 15. Developing A Strategy For The Internet Age The Five Forces Model
    • Five forces model - determines the relative attractiveness of an industry.
    • Buyer power - high when buyers have many choices of whom to buy from, and low when the choices are few.
    • Supplier power - high when buyers have few choices of whom to buy from, and low when there are many choices.
  • 16. Developing A Strategy For The Internet Age The Five Forces Model
    • Threat of substitute products or services - low if there are very few alternatives to using the product or service.
      • Switching costs - costs that can make customers reluctant to switch to another product or service.
    • Threat of new entrants - high when it is easy for competitors to enter the market.
    • Rivalry among existing competitors – high when the industry is less attractive .
  • 17. Developing A Strategy For The Internet Age The Three Generic Strategies
  • 18. Developing A Strategy For The Internet Age The Three Generic Strategies
    • Three generic strategies
      • Cost leadership
      • Differentiation
      • Focused strategy
  • 19. Developing A Strategy For The Internet Age Using the Five Forces Model
    • Buyer power
      • Loyalty programs.
    • Supplier power
      • B2B marketplace - an Internet-based service which brings together many buyers and sellers.
    • Threat of substitute products or services
      • IT-based alternatives.
  • 20. Developing A Strategy For The Internet Age Using the Five Forces Model
    • Threat of new entrants
      • Entry barrier - a product or service feature that customers have come to expect from companies in a particular industry.
    • Rivalry among existing competitors
      • Using IT systems to be more efficient.
  • 21. Developing A Strategy For The Internet Age Bridging the Gap Between Business People and Technical People
    • Project team - a team designed to accomplish specific one-time goals, which is disbanded once the project is complete.
    • Form a team that draws the best knowledge of the business problem from the business people and the best technical solution from the technology people.
  • 22.  
  • 23. Developing A Strategy For The Internet Age Viewing the Business Problem from Another Perspective
    • Take the perspective of a customer of the company.
    • Design the information system so it enhances the customer’s experience.
  • 24. Developing A Strategy For The Internet Age Using the Three Generic Strategies
    • Use the three generic strategies to change the basis of competition.
    • Amazon.com makes the buying experience a pleasure by using sophisticated software to personalize the site for each individual.
  • 25. Developing A Strategy For The Internet Age Developing a Creative Design
    • Creative design - solves the business problem in a new and highly effective way rather than the same way others have done it.
    Team Work Finding the Best IT Strategy For Your Industry
  • 26. Developing A Strategy For The Internet Age The Value Chain
    • Business process - a standardized set of activities that accomplishes a specific task, such as processing a customer’s order.
    • Value chain - views the organization as a chain – or series – of processes, each of which adds value to the product or service for the customer.
  • 27. Developing A Strategy For The Internet Age The Value Chain
  • 28. Developing A Strategy For The Internet Age The Value Chain
    • Talbott used the value chain to:
      • Plan for a better way of meeting customer demands.
      • Identifying processes that add value.
      • Identifying processes that reduce value.
  • 29. Developing A Strategy For The Internet Age The Value Chain
  • 30. Developing A Strategy For The Internet Age The Value Chain
  • 31. Developing A Strategy For The Internet Age Looking Beyond The Four Walls Of The Company
    • Just-in-time - an approach that produces or delivers a product or service just at the time the customer wants it.
    • Supply chain - consists of the paths reaching out to all of a company’s suppliers of parts and services.
    • Collaborative planning, forecasting, and replenishment (CPFR) - a concept that encourages and facilitates collaborative processes between members of a supply chain.
  • 32. Key E-Commerce Strategies
    • Three capabilities made possible by the Internet are:
      • Mass customization and personalization
      • Disintermediation
      • Global reach
  • 33. Key E-Commerce Strategies Mass Customization and Personalization
    • Mass customization - a business gives its customers the opportunity to tailor its product or service to the customer’s specifications.
    • Personalization - a Web site can know enough about your likes and dislikes that it can fashion offers that are more likely to appeal to you.
    • Collaborative filtering - a method of placing you in an affinity group of people with the same characteristics.
  • 34. Key E-Commerce Strategies Disintermediation
    • Disintermediation – using the Internet as a delivery vehicle, intermediate players in a distribution channel can be bypassed.
  • 35. Key E-Commerce Strategies Global Reach
    • Global reach - the ability to extend reach to customers anywhere there is an Internet connection, and at a much lower cost.
  • 36. The U.S. Airline Industry Airline Reservation Systems
    • The airlines really began using IT in a significant way when American Airlines and United Airlines introduced the first airline reservations systems.
      • SABRE
      • APPOLO
  • 37. The U.S. Airline Industry Frequent Flyer Programs
    • Frequent flyer programs are a great example of using IT to alter Porter’s five forces.
      • They reduced buyer power by making it less likely a traveler would choose another airline.
      • They reduced the threat of substitute products or services by increasing switching costs.
      • They erected entry barriers by making a frequent flyer program a practical necessity for any airline to compete effectively.
  • 38. The U.S. Airline Industry Yield Management Systems
    • Yield management systems are designed to maximize the amount of revenue that an airline generates on each flight.
    • Yield management systems are the reason that an airfare you’re quoted over the phone can be $100 higher when you call back an hour later.
  • 39. The U.S. Airline Industry Yield Management Systems
  • 40. The U.S. Airline Industry Disintermediating the Travel Agent
    • Expert surveys have estimated that the number of travel agents in the U.S. will be sharply reduced as a result of disintermediation.
    Team Work Helping the Little Guy Compete
  • 41. The U.S. Airline Industry Utilizing Emerging Technologies
    • Permission marketing - when you have given a merchant your permission to send you special offers.
  • 42. Summing It Up
    • Important considerations you should keep in mind as you work to bring an IT competitive advantage to your organization include:
      • Be efficient and effective.
      • Competition is all around you.
      • Push the state-of-the-art.
      • IT competitive advantages are only temporary.
  • 43. Case Study GM Tries to Lure Customers with OnStar
    • GM added an in-car cellular service, OnStar, to update its image and increase sales.
    • Did the OnStar system give GM a competitive advantage?
  • 44. Case Study Speedpass: Throw Away Your Plastic?
    • Speedpass offers a short plastic cylinder, called a Key Tag, that transfers customer billing information automatically.
    • Speedpass is an alternative to a credit card.
    • How is Speedpass an example of a first mover?