1. Information Systems for Competitive Advantage
Using MIS 4e Chapter 3
Information Systems for Competitive Advantage

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Q1: How Does Organizational Strategy Determine Information Systems Structure?
Organizations examine the structure of their industry and determine a competitive strategy
Competitive strategy determines value chains determine business processes
Structure of business processes determines design of supporting information systems
Figure 3-1
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3. Q2: What Five Forces Determine Industry Structure?
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4. Q2: What Five Forces Determine Industry Structure? (cont’d)
Five Forces at FlexTime
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5. Q3: How Does Analysis of Industry Structure Determine Competitive Strategy?
Porter’s Four Competitive Strategies
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6. Q4 How Does Competitive Strategy Determine Value Chain Structure?
Value is amount of money a customer is willing to pay for a resource, product, or service. Difference between value an activity generates and its cost is called margin.
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7. Support Activities in the Value Chain
Support Activity
Description
Technology
R & D, New Techniques, Methods, Procedures
Procurement
Raw Materials
Human Resources
Training, Recruiting, Compensation
Firm Infrastructure
General Management, Finance, Accounting, Legal, Government Affairs
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8. Bicycle Maker’s Value Chain
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9. Value Chain Linkages
Interactions across value activities readily supported by information systems
Manufacturing systems use linkages to reduce costs
Sales forecasts to plan production
Production plan used to determine raw materials needs
Material needs used to schedule purchases
Just-in-time inventory
Reduced Inventory sizes and costs
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10. Three Examples of Business Processes for Bicycle Manufacturer
Materials ordering process transforms cash into a raw materials inventory
Manufacturing process transforms raw materials into finished goods
Sales process transforms finished goods into cash
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11. Improved Ordering Process
Purchase Bicycle Parts activity queries both raw materials inventory database and finished goods inventory database
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Q6 How Does Competitive Strategy Determine Business Processes and Structure of Information Systems?
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Q6 How Does Competitive Strategy Determine Business Processes and Structure of Information Systems? (cont’d)
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14. High-Service Business Bike Rental
Extensive use of information systems
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Bottom Line
Organizations analyze their industry and choose a competitive strategy
Given a strategy, business processes to span value-generating activities are designed
Those processes determine scope and requirements of each organization’s information systems
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