CISB113 Fundamentals of Information Systems Competing With Information Technology

Learning Outcomes At the end of this lesson, you should be able to: Explain how IT/IS affects the competitive forces

How can organization uses IT to achieve competitive advantages? More than just to support day-to-day business processes. As a start we 1. Must understand our business … what are the threats? 2. Address the threats through competitive strategies 3. Apply IT/IS to support the strategies Strategic IT – beyond supporting operation

Source : O’Brien & Marakas (2010) Competitive Forces and Strategies

COST LEADERSHIP Use IT to substantially reduce the cost of business process Strategic Uses of Information Technology CompanyStrategic Use of ITBusiness Benefit Dell ComputerOnline orderingLowest-cost producer Examples: Another example

Value Chain Using Online Sales and Internet Delivery - Lowest Cost Software development activities Online marketing and promotion activities Systems to accept credit card payment and allow immediate download Technical support and customer service activities Software development activities CD-ROM production and packaging activities Marketing and promotion of software Warehousing and shipping of wholesaler- retailer orders Technical support activities Activities of software retailers Activities of wholesale distributors of software products Value Chain Using Traditional Channels - Highest Cost Value Chain Using Traditional Channels - Highest Cost

INNOVATION Create new products and services that include IT components Strategic Uses of Information Technology CompanyStrategic Use of ITBusiness Benefit Plus MalaysiaTouch and GoMarket leadership Federal ExpressOnline package tracking Market leadership Examples:

DIFFERENTIATION Develop new IT features to make products /services unique compared to the competitors Strategic Uses of Information Technology CompanyStrategic Use of ITBusiness Benefit Moen. IncOnline customer design Increase in market share Telekom Malaysia Unify - Internet TV Increase in market share Example:

PROMOTE GROWTH Use IT to manage regional and global business expansion Strategic Uses of Information Technology CompanyStrategic Use of ITBusiness Benefit Habib JewelPOS Inventory Tracking Increase in Market Share Example:

DEVELOP ALLIANCES Use IT to manage and identify joint ventures opportunities Strategic Uses of Information Technology CompanyStrategic Use of ITBusiness Benefit Air Asia & Car Rental Services Air Asia & Hotels Identify the potential alliances through Business Intelligence Increase in market share Example:

Discussion You are the owner of a Travel Agency. Discuss Porter’s 5 Forces in relation to your business. Discuss how do you plan to use IT to : add the element of uniqueness in order to achieve competitive advantage. achieve cost leadership

Learning Outcomes At the end of this lesson, you should be able to: Explain how IT/IS affects the competitive forces

Questions?