IT plays an important role in business strategy and competitive advantage. Businesses can pursue five basic competitive strategies - cost leadership, differentiation, innovation, growth, and alliances. IT can be strategically used to support these strategies. For example, businesses can build customer-focused operations through IT that allows them to track customer preferences, supply customized products and services anytime through multiple channels, and encourage cross-functional collaboration with customers. IT can also help reengineer and streamline business processes like order management. Knowledge management systems allow businesses to better manage and apply institutional knowledge for long term benefits. Collaboration technologies and social business tools further enhance how businesses work together internally and engage customers.

1. ROLE OF IT IN
BUSINESS
LESSON#2

2. LECTURE
COMPONENTS
Role of IT
IT in business
Competitive forces
Value chain

3. BUSINESSES
CAN DEVELOP
COMPETITIVE
STRATEGIES TO
COUNTER THE
ACTIONS OF
THE
COMPETITIVE
FORCES THEY
CONFRONT IN
THE
MARKETPLACE

4. FIVE BASIC COMPETITIVE STRATEGIES
• Cost Leadership Strategy:
Becoming a low-cost producer of products and services in the
industry or finding ways to help suppliers or customers reduce their
costs or increase the costs of competitors.
• Differentiation Strategy:
Developing ways to differentiate a firm’s products and services from
those of its competitors or reduce the differentiation advantages of
competitors. This strategy may allow a firm to focus its products or
services to give it an advantage in particular segments or niches of a
market.

5. • Innovation Strategy:
Finding new ways of doing business. This strategy may involve
developing unique products and services or entering unique
markets or market niches. It may also involve making radical
changes to the business processes for producing or distributing
products and services that are so different from the way a
business has been conducted that they alter the fundamental
structure of an industry.
• Growth Strategies:
Significantly expanding a company’s capacity to produce goods
and services, expanding into global markets, diversifying into
new products and services, or integrating into related products
and services

6. • Alliance Strategies:
Establishing new business linkages and alliances with customers,
suppliers, competitors, consultants, and other companies. These
linkages may include mergers, acquisitions, joint ventures,
formation of virtual companies, or other marketing,
manufacturing, or distribution agreements between a business
and its trading partners.

7. STRATEGIC USES OF INFORMATION
TECHNOLOGY:

9. OTHER STRATEGIC INITIATIVES :

10. BUILDING A CUSTOMER-FOCUSED
BUSINESS:
• For many companies, the chief business value of becoming a
customer-focused business lies in its ability to help them keep
customers loyal, anticipate their future needs, respond to
customer concerns, and provide top-quality customer service.
This strategic focus on customer value recognizes that quality,
rather than price, has become the primary determinant in a
customer’s perception of value.

11. Companies that consistently offer the best value from the
customer’s perspective are those that
keep track of their customers’ individual preferences
keep up with market trends
supply products, services, and information anytime and anywhere
 provide customer services tailored to individual needs.
Thus, Internet technologies have created a strategic opportunity
for companies, large and small, to offer fast, responsive, high-
quality products and services tailored to individual customer
preferences

12. • Internet technologies can make customers the focal point of
customer relationship management (CRM) and other e-business
applications.
• Such communications enable continual interaction with
customers by most business functions and encourage cross-
functional collaboration with customers in product
development, marketing, delivery, service, and technical
support.

14. THE VALUE CHAIN AND STRATEGIC IS:
• The value chain concept, developed by Michael Porter. In the
value chain conceptual framework, some business activities are
primary processes; others are support processes.
i. Primary processes are those business activities that are directly related
to the manufacture of products or the delivery of services to the
customer.
ii. In contrast, support processes are those business activities that help
support the day-to-day operation of the business and that indirectly
contribute to the products or services of the organization.

16. ORDER MANAGEMENT PROCESS:

17. EXAMPLES OF INFORMATION TECHNOLOGIES
THAT SUPPORT REENGINEERING THE ORDER
MANAGEMENT PROCESSES.

18. KNOWLEDGE MANAGEMENT SYSTEMS:
• Knowledge Management Systems Some firms perform better than
others because they have better knowledge about how to create,
produce, and deliver products and services.
• This firm knowledge is unique, difficult to imitate, and can be
leveraged into long-term strategic benefits.
• Knowledge management systems (KMS) enable organizations to better
manage processes for capturing and applying knowledge and
expertise.
• These systems collect all relevant knowledge and experience in the
firm, and make it available wherever and whenever it is needed to
improve business processes and management decisions. They also

20. SYSTEMS FOR COLLABORATION AND
SOCIAL BUSINESS :
WHAT IS COLLABORATION?
Collaboration is working with others to achieve shared and
explicit goals. Collaboration focuses on task or mission
accomplishment and usually takes place in a business, or other
organization, and between businesses.
WHAT IS SOCIAL BUSINESS?
Many firms today enhance collaboration by embracing social
business—the use of social networking platforms, including
Facebook, Twitter, and internal corporate social tools—to

21. APPLICATIONS OF SOCIAL BUSINESS

22. BUSINESS BENEFITS OF COLLABORATION
AND SOCIAL BUSINESS

23. TOOLS AND TECHNOLOGIES FOR
COLLABORATION AND SOCIAL BUSINESS
E-mail and Instant Messaging (IM)
Wikis (A type of site)
Virtual Worlds

24. CONTACT DETAILS
humasheikh107@gmail.com