1. CISB444 - Strategic Information Systems Planning
Chapter 2 - An Overview of Business Strategy Concepts and the
IS/IT Strategy Implications
Part II

2. Course Overview
Chapter 2 considers approaches and techniques involved in business strategy formulation and strategic management and their implications for IS/IT strategy development.

3. Main topics
The evolving nature of strategy and strategic planning in organisations
The strategic framework
Strategy implementation
Strategy tools and techniques

4. Competitive Forces and Competitive Strategies
An enterprise exists within an industry, and to succeed, it must effectively deal with the competitive forces that exist within the particular industry.
For example, the forces in an emerging industry such as bio-technology or genetic engineering are considerably different from those of a growth industry, say leisure or financial services, or the more mature or declining industries such as coal mining.

5. Competitive Forces and Competitive Strategies
The enterprise interacts with its customers, suppliers, and competitors, but in addition to these interactions, there are potential new entrants into the particular competitive marketplace and potential substitute products and services.
To survive and thrive in this environment, it is obviously vital to understand these interactions and the implications in term of how to avoid being disadvantaged and to understand the opportunities to gain competitive advantage

6. Porter Competitive Forces Model
Describes the interaction of external influences, specifically threats and opportunities, affecting an organisation’s strategy and ability to compete

7. Porter Competitive Forces Model
Describes the interaction of external influences, specifically
threats and opportunities, affecting an organisation’s strategy
and ability to compete

8. Porter Competitive Forces Model

9. Analysing the Five Competitive Forces: How to Do It
Step 1: Identify the specific competitive pressures associated with each of the five forces
Step 2: Evaluate the strength of each competitive force : fierce, strong, moderate, or weak?
Step 3: Consider the overall pattern of competition and collective impact of all five forces

10. Strategic Implications of the Five Competitive Forces
Competitive environment is unattractive from the standpoint of earning good profits when
Rivalry is strong
Entry barriers are low and entry is likely
Competition from substitutes is strong
Suppliers and customers have considerable bargaining power

11. Strategic Implications of the Five Competitive Forces
Competitive environment is ideal from a profit making standpoint when
Rivalry is moderate
Entry barriers are high and no firm is likely to enter
Good substitutes do not exist
Suppliers and customers are in a weak bargaining position

12. Five Competitive Forces
Coping With the
Five Competitive Forces
Objective is to formulate a strategy
To insulate firm from competitive pressures
To initiate actions to produce a sustainable competitive advantage, placing added pressure on rivals
Which allows firm to define the business model for the
industry

13. and Factors Affecting Strength of Rivalry
Weapons for Competing
and Factors Affecting Strength of Rivalry

14. Factors Affecting the Threat of Entry

15. Factors Affecting Competition From Substitute Products

16. Factors Affecting the Bargaining Power of Suppliers

17. Bargaining Power of Buyers

18. Analysis of Competitive Forces to Identify IS/IT Opportunity and Threats
How can IS/IT build barriers to entry?
How can IS/IT build in switching costs for customers?
How can IS/IT change the basis of competition?
How can IS/IT change the balance of power in supplier/customer relationship?
How can IS/IT generate new products and services?

19. Competitive Strategies : Strategic Approaches to Building Competitive Advantage
1. Strive to be the industry’s low-cost provider 2. Out compete rivals on a key differentiating feature 3. Focus on a narrow market niche, doing a better job than rivals of serving the unique needs of niche buyers 4. Develop expertise, resource strengths, and capabilities not easily imitated by rivals

20. Competencies vs. Core Competencies vs. Distinctive Competencies
A competence is the product of organisational learning and experience and represents real proficiency in performing an internal activity
A core competence is a well-performed internal activity that is central (not peripheral or incidental) to a company’s competitiveness and profitability
A distinctive competence is a competitively valuable activity that a company performs better than its rivals

21. Competencies and Competitive Advantage
Operational Excellence
Enabling products and services to be obtained reliably, easily, and cost-effectively by customers.
Customer Intimacy
Targeting markets very precisely and tailoring products and services to the needs of particular customer groups.
Not just to satisfy but to please customers by understanding their needs and meeting them on every occasion

22. Competencies and Competitive Advantage
Product Leadership
Continuing product innovation meeting customers’ needs
Not only creativity in developing new products and enhancing existing ones, but also astute market knowledge to ensure that they sell.

23. Questions?