1. CHAPTER 2 Organizational Strategy, Competitive Advantage, and Information Systems

2. Competitive Advantage Competitive advantage is an advantage over competitors in some measure such as: Cost Quality Speed Desired Results: Control of a market Larger-than-average profits

3. Business Process Collection of related activities that produce a product or a service of value to: Organization Business partners Customers Cross-Functional Business Processes

4. Notify Traveler Receive Ticket Order Reserve Seats Charge Credit Card Confirm Flight(s) Issue e-Ticket Plan Trip Check Flights Submit Ticket Order Receive e-Ticket Seats Available Use Credit Card? Charge OK? Seats Available ? Notify Traveler Frequent Flyer Mileage Sufficient? Subtract Mileage NO YES NO YES NO YES NO YES Traveler Airline Web Site YES NO

5. Business Pressures, Organizational Responses, and IT Support Business Pressures Market Pressures Technology Pressures Societal Pressures

6. Market Pressures The Global Economy & Strong Competition The Changing Nature of the Workforce Powerful customers

7. Technology Pressures Technological Innovation and Obsolescence Information Overload

8. Societal Pressures Social Responsibility Government Regulation and Deregulation Protection Against Terrorist Attacks Ethical Issues

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

10. Porter’s Competitive Forces Model

11. Threat of entry of new competitors is high when it is easy to enter a market and low when significant barriers to entry exist. A barrier to entry is a product or service feature that customers expect from organizations in a certain industry. Impact of Internet?

12. Porter’s Competitive Forces Model The bargaining power of suppliers is high when buyers have few choices and low when buyers have many choices. Impact of Internet?

13. Porter’s Competitive Forces Model The bargaining power of buyers is high when buyers have many choices and low when buyers have few choices. Switching costs are the costs (money and time) to buy elsewhere. Impact of Internet?

14. Porter’s Competitive Forces Model The threat of substitute products or services is high when there are many substitutes for an organization’s products or services and low where there are few substitutes. What types of industries have highest threat of substitute products/services? Why?

15. Porter’s Competitive Forces Model The rivalry among firms in an industry is high when there is fierce competition and low when there is not. What are industries that have high rivalry?

16. Strategies for Competitive Advantage Cost Leadership Differentiation Innovation Operational Effectiveness Customer-orientation Examples of businesses who implement these?