1. Information Systems for Strategic Advantage
BUS 782

2. Strategic Information System
Information systems that provide a firm with competitive products and services which give it a strategic advantage over its competitors in the marketplace.
Information systems that promote business innovation, improve operational efficiency.

3. Movie Rental Netflix: Early player Blockbuster: Netflix:
Rent Online - Return By Mail Or In-Store with BLOCKBUSTER Total Access
In-Store Exchanges
Netflix:
With Netflix, you will be able to watch movies instantly on your PC at no additional cost. The number of hours varies by plan. On our most popular plan, the 3 at-a-time unlimited plan for $16.99 a month, you will also be able to watch 17 hours of movies and TV episodes instantly on your PC - all in addition to your regular "by mail" selections!

4. Photo Printing Kodak: http://www.kodakgallery.com/Welcome.jsp
Upload photos
Online album
View and Edit
Buy prints
Walgreen:
Order professionally-developed wallet sized, 4x6", 5x7", 8x10", or poster prints of any photo in your account, on Real Photographic Paper in glossy finish. You can pick them up at a Walgreens store near you an hour later, or have them shipped straight to you!

5. Strategic Advantage and Strategic Necessity
Strategic advantage refers to obtaining a sustainable competitive edge over competitors. The ability to obtain a greater than normal return on investment.
A strategic necessity is a system that must be installed to remain competitive and stay in business.

6. Auction sites Yahoo Auction site is retired Ebay Necessity: Advantage:
Ability to search and view items, view seller info and bid history, place a bid, online payment.
Advantage:
Ebay store/ProStore
PayPal
Micropayments
SkyPe:
Special SkyPe services for eBay sellers and buyers
Others: Special niches

7. Amazon Associates:
Amazon.com's affiliate marketing program. By linking to Amazon products and services you can add compelling content for your site visitors enjoyment and receive up to 8.5% in referral fees for doing so.
aStore

8. Being the First
Internet Search Engines:
Yahoo, Google
Teoma
Mooter

9. New Way of Doing Business
Dell:
Customization
America West website --
Select your seats
Web check-In (Travel Tools and Services)

10. Comparing Websites Travel:Yahoo vs Expedia
Hotels
Cars
Vacations
Cruises
Real Estate:Century 21 vs ReMax
Buy: neighborhood, school
Sell
Finance
Learn

11. Competitive forces model by Michael Porter
Threat of
New Entrants
Bargaining Power
of Suppliers
Rivalry among
Existing Competitors
Bargaining Power
of Customers
Threat of Substitute
Products

12. Competitive Strategies
Cost leadership strategy:
Become a low cost producer of products and services
Find ways to help suppliers or customers reduce their costs
Product differentiation strategy.
Innovation strategy: Finding new way of doing business, enter new market.
Alliance strategy: Establish alliances with customer, suppliers, competitors, other company.
Growth strategy: expanding, diversifying, integrating.

13. Strategic Roles for Information Systems
Improving business operations
Promoting business innovation
Locking in customers and suppliers
Interorganizational IS, EDI, automatic inventory replenishment system
Creating switching costs
make customers dependent on the continued use of innovative IS.
Raising barriers to entry
discourage competitors from entering a market

14. The Value Chain and Strategic IS
It views a firm as a series, or chain, or network of basic activities that add value to its products and services, and thus add a margin of value to the firm.
Margin is the value of the firm’s products and services less their costs, as perceived by the firm’s customers.
Support activities:
Administration, human resource management ,etc.
Primary activities:
Inbound logistics, operations, outbound logistics, marketing, etc.

15. The Value Chain Administrative Coordination & Support Services
Human Resource Management
Technology Development
Procurement of Resources
Inbound
Logistics
Operations
Outbound
Marketing
and
Sales
Customer
Service
Competitive
Advantage
The Value Chain Concept, developed by Michael Porter, is useful for helping you to decide when and how to apply the strategic capabilities of IT. The Concept views a firm as a series, or chain, of basic activities that add value to a firm’s products and services, and thus add a margin of value to the firm. In this way some activities are seen as primary processes, while others are seen as support processes that provide direction and support for the specialized work of primary activities. Thus, the framework highlights where competitive strategies can best be applied in a business. For each activity, the role of strategic information systems (SIS) can contribute significantly to that activity’s contribution to the value chain. For example:
Administrative Coordination & Support Services. The key role of SIS here is in enterprise communication and collaboration.
Human Resources Management. SIS role: Career development Intranet for employees.
Technology Development. SIS role: Computer-Aided Design Extranets with partners.
Procurement of Resources. SIS role: E-Commerce Extranet with suppliers.
Primary Activities. These activities directly contribute to the transformation process of the organization.
Inbound Logistics. SIS role: Automated Warehousing, JIT.
Operations. SIS role: Computer-Aided Manufacturing.
Outbound Logistics. SIS role: Online Data Entry.
Marketing and Sales. SIS role: Interactive Targeted Marketing.
Customer Service. SIS role: Customer Relationship Management.
Teaching Tips
This slide corresponds to Figure 2.9 on p. 61 and relates to the material on p. 59.

16. Becoming an Agile Competitor
Agility in competitive performance is the ability of a business to prosper in rapidly changing, continually fragmenting global markets for high-quality, high-performance, customer-configured products and services. An agile company can:
1. Make a profit in markets with broad product ranges and short model lifetimes
2. Process orders in arbitrary lot sizes
3. Offer individualized products while maintaining high volumes of production.

17. IT and Agility
Agile companies depend heavily on information technology to:
1. Enriched its customers with customized solutions to their needs.
Mass customization
2. Cooperate with other businesses to bring products to market as rapidly and cost-efficient as possible.
B2B E-Commerce
Electronic Exchange: An electronic forum where manufacturers, suppliers, and competitors buy and sell goods.
Example: WorldWide Retail Exchange (WWRE)

18. Fedex Package Tracking System
By using the package tracking system and making the package progress visible to the customer, Fedex changed the way the packaging business operates. The tracking system helped Fedex manage its package delivery efficiently and provided customers with a way to know when to expect their packages. After Fedex introduced the system, every company in the packaging business, including the US Postal Service, were forced to offer the service.