Strategic Advantage Competitive Strategy Concepts Strategic Uses of. Information Technology

Transcription

1 ompeting with Learning bjectives 1. Identify several basic competitive strategies and explain how they can use information technologies to confront the competitive forces faced by a business. 2. Identify several strategic uses of Internet technologies, and give examples of how they give competitive advantages to a business. 3. Give examples of how business process reengineering frequently involves the strategic use of Internet technologies. opyright 2005, McGraw-Hill/Irwin, Inc. 2-1 opyright 2005, McGraw-Hill/Irwin, Inc. 2-2 Learning bjectives 4. Identify the business value of using Internet technologies to become an agile competitor or to form a virtual company. 5. Explain how knowledge management systems can help a business gain strategic advantages. Fundamentals of IT Supports Efficient Business perations Workgroup or Enterprise ollaboration Effective Business Decisions Real World ase 1- GE, Dell, Intel, and thers lick to go to ase 1 opyright 2005, McGraw-Hill/Irwin, Inc. 2-3 opyright 2005, McGraw-Hill/Irwin, Inc. 2-4

2 Systems Support Position an Be Any Kind of System Gain Reduce a Disadvantage opyright 2005, McGraw-Hill/Irwin, Inc. 2-5 Strategies ost Leadership Differentiation Innovation Growth Alliance ther Strategies Rivalry of ompetitors Threat of New Entrants Threat of Substitutes Bargaining Power of s Forces Bargaining Power of Suppliers opyright 2005, McGraw-Hill/Irwin, Inc. 2-6 ther Strategies Lock in s Lock in Suppliers Switching osts Barriers to Entry Leverage Investment in IT Wal-Mart and thers Satellite Network Linking all Point-of-Sale Terminals Immediate Sales and Inventory Extended to s and Suppliers Interenterprise Systems Stockless Inventory Replenishment Systems opyright 2005, McGraw-Hill/Irwin, Inc. 2-7 opyright 2005, McGraw-Hill/Irwin, Inc. 2-8

3 Value hain & IT Support Administrative oordination and Support Services Human Resources Management Development Procurement of Resources Value hain & IT Primary Business Inbound Logistics perations utbound Logistics Marketing and Sales Service opyright 2005, McGraw-Hill/Irwin, Inc. 2-9 opyright 2005, McGraw-Hill/Irwin, Inc Value hain & IT SUPPRT PRESSES PRIMARY BUSINESS PRESSES of a Firm Administrative oordination & Support Services ollaborative Workflow Intranet Human Resources Management Employee Benefits Intranet Development Product Development Extranet with Partners Procurement of Resources E-ommerce Web Portals for Suppliers Inbound Logistics Automated Just-in in-time Warehousing perations utbound Marketing Logistics & Sales nline Point-of of-sale And rder Processing Target Marketing MPETITIVE ADVANTAGE Service omputer- Aided Flexible Manufactu- ring Relation- ship Manage- ment opyright 2005, McGraw-Hill/Irwin, Inc Using IT for IT Major Differentiator Use IT to Develop Real World ase 2- lick to go to Intec Engineering: ase 2 opyright 2005, McGraw-Hill/Irwin, Inc. 2-12

4 Using IT for - Building Value Fast Response to Individual Needs Use of Internet, Intranets, and Extranets Using IT for Hilton Hotels Hilton.om Reservation System Services Tailored Automatically to Last Visit High Level of Personalization Deeper Personal Relationship Direct-to- Business Model Via the Web opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc Building Value Database by Preferences & Profitability Employee View of is omplete Intranets Database Place rders Directly Internet Web Personalization Builds Loyalty Build a Web ommunity of s, etc. Transaction Database s heck wn History Internet rders Through Partners Intranets Extranets s Linked With Distribution Intranets Extranets Business Business Improvement Level of hange Incremental Process hange Starting Point Frequency of hange Time Required Typical Scope Path to Execution Improved New Version of Process Existing ne-time or ontinuous Short Narrow, Within Functions Primary Enabler Statistical ontrol Risk Moderate Business Radical Brand New Process lean Slate Horizon Past and Present Future ultural Periodic ne-time hange Long Broad, ross- Functional Participation Bottom-up Top-down ultural Structural High opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc. 2-16

5 Business rder Management Process Business Functions P R P S A L M M IT M EN T NF I G UR A TI N H R E E D K I I T N G opyright 2005, McGraw-Hill/Irwin, Inc D EL I V E R Y B IL L I N G LL SALES MANUFATURING FINANE LGISTIS E TI NS rder Management Process Johnson ontrols: Success with Web-Based Project Fixing a Problem During Engineering osts 1/10 of orrection at the Prototype Stage Web-Based ollaboration Saved 80% on R&D Investments opyright 2005, McGraw-Hill/Irwin, Inc rder Management Relationships Using Intranets and the Internet Supplier Managed Inventories Using the Internet ross-functional ERP Software Integrating Manufacturing, Distribution, Finance, and Human Resource -Access to Web rder Entry, Status-hecking, Payment, and Services, Product, and rder Status Databases accessed via Intranets and Extranets by Employees and Suppliers rder Management Agilent Technologies: Failure in Rocky ERP Project Lost $105 Million in Revenue and $70 Million in Profits Implementation Disruptions More Extensive than Expected ERP hanges Affect People,, Policies, and ompany ulture opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc. 2-20

6 Becoming an Agile ompany 1. s Perceive Products and Services as Solutions to their Individual Problems 2. ooperates with s, Suppliers, and Even ompetitors to Bring Products to Market Quickly and at Lowest ost 3. rganized to Thrive on Uncertainty 4. Leverages the Impact of its People and Knowledge Becoming an Agile ompany Dell omputer Agility in Action -Focused ompany hampion of Mass ustomization Build-to-rder Business Model 25,000 on a Typical Day Tight Supply hain Management Rarely More than Two Hours Worth of Parts Inventory opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc Major Supplier Extranets Small Suppliers The Virtual ompany Interenterprise IS Subcontractors Intranets ross-functional Teams Engineering Teams Boundary of a Firm Response and rder- Fulfillment Teams Major Manufacturing Teams omplementary Services opyright 2005, McGraw-Hill/Irwin, Inc Virtual ompany Strategies Virtual ompany Strategies Share Infrastructure and Risk with Alliance Partners Link omplementary ore ompetencies Reduce oncept-to-ash Time Through Sharing Increase Facilities and Market overage Gain Access to New Markets and Share Market or Loyalty Migrate from Selling Products to Selling Solutions opyright 2005, McGraw-Hill/Irwin, Inc. 2-24

7 Virtual ompany Strategies isco Systems: Virtual Manufacturing Alliances Alliances reate a Virtual Manufacturing ompany Three ompanies Involved in the Alliance Provides and Agile Build-to- rder apability in Fiercely Industry Knowledge reating ompany Learning rganizations Knowledge Management Explicit Knowledge Knowledge Management Systems (KMS) opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc Knowledge Management Enterprise Intelligence reation, Sharing, and Management Document Management Knowledge Management Siemens AG: Global Knowledge Management System Stop Employee Problem of Knowledge Hoarding reated ShareNet Web Site Profitable Real-time Worldwide ollaboration Real World ase 3- Yellow, JetBlue and Gentex: lick to go to ase 3 opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc. 2-28

8 ut osts Differentiate and Innovate Products and Services Promote Growth Develop Alliances Lock in s & Suppliers reate Switching osts reate Barriers to Entry Leverage IT Investment Develop opyright 2005, McGraw-Hill/Irwin, Inc Develop Business Value Make Value the Focus Use of Internet, Intranets, and Extranets to Track and Serve Needs and Interests Provide Services Tailored to Specific Needs opyright 2005, McGraw-Hill/Irwin, Inc Business Enable Radical hanges to Business Improves Efficiency and Effectiveness IT Supports Innovative hanges in Work Flows, Job Requirements, and rganizational Structures in a ompany Becoming an Agile ompany Rapid Response to Market hanges Broad Product Ranges Short Model Lifetimes Heavy Dependence Upon IT to Respond to s Unique Situations Enhance ost Effectiveness opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc. 2-32

9 reating a Virtual ompany Use of Internet and IT Provide omputing and ommunications Resources IT Enables Management of a Network of People, Knowledge, Financial, and Physical Resources Takes of Rapidly hanging Markets reating ompany reates a Lasting Innovative Use of rganization Knowledge Supports Development and Management of New rganization Knowledge Integrates Into New Products and Services opyright 2005, McGraw-Hill/Irwin, Inc opyright 2005, McGraw-Hill/Irwin, Inc. 2-34