CHAPTER 2 Organizational Strategy, Competitive Advantage, and Information Systems

CHAPTER OUTLINE 2.1 Business Processes 2.2 Business Process Reengineering and Business Process Management 2.3 Business Pressures, Organizational Responses, and Information Technology Support

CHAPTER OUTLINE (cont) 2.4 Competitive Advantage and Strategic Information Systems 2.5 Business – Information Technology Alignment

LEARNING OBJECTIVES 1. Understand the concept of business processes, and provide examples of business processes in the functional areas of an organization. 2.Differentiate between the terms business process reengineering and business process management. 3.List and provide examples of the three types of business pressures, and describe one IT response to each.

LEARNING OBJECTIVES (continued) 4. Identify the five competitive forces described by Porter, and explain how the Web impacts each one. 5.Describe the strategies that organizations typically adopt to counter the five competitive forces and achieve competitive advantage. 6.Define business – information technology alignment, and describe the characteristics of effective alignment.

2.1 Business Processes Business Process Cross-Functional Business Processes

2.2 Business Process Reengineering and Business Process Management

2.3 Business Pressures, Organizational Responses, and IT Support Market Pressures Technology Pressures Societal Pressures

Market Pressures The Global Economy and Strong Competition The Changing Nature of the Workforce Powerful Customers

The Stages of Globalization (From Thomas Friedman in The World is Flat) Globalization 1.0 (from 1492 to 1800) Globalization 2.0 (from 1800 to 2000) Globalization 3.0 (from 2000 to the present)

Thomas Friedman’s Ten Flatteners Fall of the Berlin Wall Netscape goes public Development of work-flow software Uploading Outsourcing Offshoring Supply Chaining Insourcing Informing The Steroids

The Steroids Computing Instant messaging and file sharing Voice over Internet Protocol Videoconferencing Computer graphics Wireless technologies

Technology Pressures Technological Innovation and Obsolescence Information Overload

Societal/Political/Legal Pressures Social Responsibility Government Regulation and Deregulation Protection Against Terrorist Attacks Ethical Issues

Organizational Responses Strategic Systems Customer Focus Make-to-Order and mass customization E-business and E-commerce

2.4 Competitive Advantage and Strategic Information Systems

Porter’s Competitive Forces Model

Porter’s Competitive Forces Model Threat of entry of new competitors Barriers to entry

Porter’s Competitive Forces Model Bargaining power of suppliers Bargaining power of buyers

Porter’s Competitive Forces Model Threat of substitute products or services Rivalry among firms in an industry

Porter’s Value Chain Model Primary activities Support activities

Strategies for Competitive Advantage Cost Leadership Differentiation Innovation Operational Effectiveness Customer-orientation

Closing Case The Problem The Solution The Results