Presentation is loading. Please wait.

Presentation is loading. Please wait.

Strategic Information Systems for Competitive Advantage

Similar presentations

Presentation on theme: "Strategic Information Systems for Competitive Advantage"— Presentation transcript:

1 Strategic Information Systems for Competitive Advantage
Chapter 3 Strategic Information Systems for Competitive Advantage

2 A Good Strategy?

3 Why Have a Strategy? Does a business/organization need a strategy?
What makes a good strategy? Does IT affect a strategy? If so, how?

4 Elements of Strategic Management
Long Range Planning Outside scope of this course Response Management Proactive Innovation Information Technologies Our focus

5 Where Does a Strategy Come From?
Mission Goals Organizational strategy Functional strategies Finance Marketing Operations Tactics operations

6 What is a Mission? Mission: The reason for existence of an organization Mission Statement: A statement of purpose that serves as a guide for strategy and decision making Should answer: What business are we in? Where should we be in 10 years? Who are our customers? What are our basic beliefs? How do we measure success?

7 IBM Mission Statement We create, develop and manufacture the industry’s most advanced information technologies, including computer systems, software, networking systems, storage devices and microelectronics. We have two fundamental missions: We strive to lead in the creation, development, and manufacture of the most advanced information technologies. (Performance objective & Business definition) We translate advanced technologies into value for our customers as the world’s largest information services company. Our professionals worldwide provide expertise within specific industries, consulting services, systems integration, and solution development and technical support. (Business definition, customers)

8 Goals Goal: Provides substance to the overall mission. Example: 3M
More specific Example: 3M Mission: “To solve unsolved problems innovatively …” Possible Goal: Our corporate goal is to have 30% of sales come from new products.

9 Distinctive Competencies
Distinctive Competencies: Special attributes or abilities possessed by an organization that give it a competitive edge OR Unique resources and strength of an organization that reflect the collective learning of an organization

10 Examples of Distinctive Competencies
Price Low Cost, Wal-Mart Quality High Performance Design Amazon Time Rapid Delivery On-Time Delivery Office Max, Staples Flexibility Variety, Volume Service Superior Customer Service Dell Location Convenience BestBuy, McDonald’s, 7-Eleven

11 The Role of IT IT creates applications that provide strategic advantages to companies IT is a competitive weapon IT supports strategic change, e.g. reengineering IT networks with business partners IT provides cost reduction IT provides competitive business intelligence

12 Competitive Advantage in the Web Economy
Competitive Strategy Search for a competitive advantage in an industry, which leads to control of the market Competitive Advantage Look for a competitive necessity, which will help your company keep up with the competitors Sustainable Strategic Advantage Maintain profitable and sustainable position against the forces that determine industry competition

13 Analyzing Competitiveness
Well-known framework is Porter’s competitive forces model (1985) Used to develop strategies for companies to increase their competitive edge Demonstrates how IT can enhance competitiveness of corporations Recognizes 5 major forces that could endanger a company’s position in a given industry

14 Porter’s 5 Competitive Forces
The threat of entry of new competitors The bargaining power of suppliers The bargaining power of customers (buyers) The threat of substitute products or services The rivalry among existing firms in the industry

15 Competitive Forces Diagram


17 Porter’s Model in Action
Step 1: The players in each force are listed Step 2: An analysis is made which relates Porter’s determining factors Step 3: A strategy is devised to defend against these factors Step 4: Support information technologies are employed

18 Porter’s Model in Action, cont’d.

19 Case: DaimlerChrysler
Problem: In 1993, Chrysler lost $2.6 billion because its program with parts suppliers was failing Solution: Suppliers began using Lotus Notes/Domino Measurement reports to static HTML pages E-Procurement exchange at Covisint Results Chrysler saved millions of $

20 Porter’s Value Chain Analysis Model
Primary Activities Inbound logistics (inputs) Operations (manufacturing and testing) Outbound logistics (storage and distribution) Marketing and Sales Service These 5 activities constitute a supply chain

21 Value Chain Model, cont’d.
Support Activities Firm infrastructure Human resources management Technology development Procurement

22 Value System A firm’s value chain is part of a larger stream of activities, which Porter calls a “Value System” Includes the suppliers that provide the necessary inputs AND their value chains Applies to both products & services, for any organization, PUBLIC or PRIVATE Is the basis for the Supply Chain Management

23 Functional Departments and the Value Chain


25 Value Chain Model, cont’d.
The Value System Model is used to: Evaluate a company’s process and competencies Investigate whether adding IT supports the value chain Enable managers to assess the information intensity and role of IT

Download ppt "Strategic Information Systems for Competitive Advantage"

Similar presentations

Ads by Google