Chapter 3. Strategy and Information Systems

Transcription

1 Chapter 3 Strategy and Information Systems

2 And we ve got a lot of process and systems work to do." Differentiates itself by having a large inventory of parts. Competitive strategy is threatened by 3D printing. Manufacturing 3D printing line means building new business processes and systems. Innovations threaten competitive strategies. 3-2

3 Study Guide Q1: How does organizational strategy determine information systems structure? Q2: What five forces determine industry structure? Q3: How does analysis of industry structure determine competitive strategy? Q4: How does competitive strategy determine value chain structure? Q5: How do business processes generate value? Q6: How does competitive strategy determine business processes and the structure of information systems? Q7: How do information systems provide competitive advantages? Q8: 2024? 3-3

4 Q1: How Does Organizational Strategy Determine Information Systems Structure? 3-4

5 Q2: What Five Forces Determine Industry Structure? Competitive Forces Competition from vendors of substitutes. Competition from new competitors. Competition from existing rivals. Bargaining Power Forces Bargaining power of suppliers. Bargaining power of customers. 3-5

6 Use 5-forces Model to Identify Sources of Strong Competition 3-6

7 Assessing the Five Forces at AllRoad 3-7

8 Q3: How Does Analysis of Industry Structure Determine Competitive Strategy? Porter's Four Competitive Strategies 3-8

9 Bottom Line To be effective goals, objectives, culture, and activities must be consistent with strategy. In MIS, this means all information systems must reflect and facilitate the organization's competitive strategy. 3-9

10 Yikes! Bikes! You are the operations manager for Yikes! Bikes, a manufacturer of high-end mountain bicycles. New owners plan to pursue lowest-cost vendor strategy by importing low-cost, lower quality bikes. New owners are not being honest with employees about cutting jobs. Say you might be promoted to new general manager. Should you trust them? Q: Are the owner s actions illegal? Unethical? 3-10

11 Q4: How Does Competitive Strategy Determine Value Chain Structure? Linkages 3-11

12 Task Descriptions for Primary Activities of the Value Chain 3-12

13 Q5: How Do Business Processes Generate Value? 3-13

14 Improved Material Ordering Process 3-14

15 Q6: How Does Competitive Strategy Determine Business Processes and the Structure of Information Systems? Low-Cost Rental Value Chain 3-15

16 High-Service Rental Value Chain 3-16

17 3-17

18 Using MIS InClass Exercise 3: Competitive Strategy Over the Web Industry Structure Value Chains Information Systems Competitive Strategy Business Processes vs. vs. vs. vs. vs

19 Q7: How Do Information Systems Provide Competitive Advantages? Principles of Competitive Advantage 3-19

20 How Does an Actual Company Use IS to Create Competitive Advantages? Maintains customer account data IS collects information for ABC (adds value). IS saves customers time by automatically filling in part of form (adds value for customer). Package & information delivery system IS helps customer to select delivery address and generate shipping labels. What value does shipper get? 3-20

21 Two Roles for Information Systems Regarding Products 3-21

22 ABC, Inc., Web Page to Select a Contact from the Customer s Records 3-22

23 ABC, Inc., Web Page to Specify Notification 3-23

24 ABC, Inc., Web Page to Print a Shipping Label 3-24

25 Q8: 2024? Models of business strategy, competitive advantages, and relationship to processes and IS unlikely to change. Pace of business will accelerate. New ideas and innovations and require businesses to be constantly on alert for changes that may affect their strategy. Be a modern-day prospector and use technology to create new products. 3-25

26 Security Guide: Differentiating on Security! Major data centers harden their sites; computer criminals turn to less strongly protected assets held by small organizations and individuals. Habit of effective security behavior easy way to gain a competitive advantage. 3-26

27 Active Review Q1: How does organizational strategy determine information systems structure? Q2: What five forces determine industry structure? Q3: How does analysis of industry structure determine competitive strategy? Q4: How does competitive strategy determine value chain structure? Q5: How do business processes generate value? Q6: How does competitive strategy determine business processes and the structure of information systems? Q7: How do information systems provide competitive advantages? Q8: 2024? 3-27

28 Case Study 3: Fulfillment by Amazon (FBA): Primary product offerings: 1. Online retail store. 2. Computing infrastructure leasing. 3. Order fulfillment services. Amazon buys, takes ownership, physical possession, inventories good, sells from inventory. 3-28

29 Is FBA Right for AllRoad Parts? Outsource to AllRoad, thus avoiding cost of developing own processes, facilities, and order fulfillment information systems. 3-29

30 FBA Fees for Products Like Sporting Goods as of May

31 Guide: Your Personal Competitive Advantage Who will be your competitors when you seek a job after graduating from college? What will be your competitive advantage in the job market? What can you do before you graduate to develop your competitive advantage? 3-31

32 Using the Guide: Your Personal Competitive Advantage (cont'd) How do these elements of competitive advantage apply to you personally? Switching costs? Differentiating products? Creating barriers? Establishing alliances? Reducing costs, increasing revenues? 3-32

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