Chapter2
COMPETING WITH INFORMATION TECHNOLOGY
• Goal: Introduces fundamental concepts of competitive
advantage through information technology and illustrates
major strategic applications of information systems.
• Learning outcome: These chapters will prepare you to
move on to study chapters on information technologies.
• Objective:
– Identify several basic competitive strategies and explain how
they use information technologies to confront the competitive
forces faced by a business.
– Identify several strategic uses of Internet technologies and give
examples of how they can help a business gain competitive
advantages.
– Identify the business value of using Internet technologies to
become an agile competitor or form a virtual company.
Content
• Fundamentals of Strategic Advantage
– Competitive Strategy Concepts
– Strategic Uses of Information Technology
– Building a Customer-Focused Business
• Using Information Technology for Strategic
Advantage
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Reengineering Business Processes
Becoming an Agile Company
Creating a Virtual Company
Knowledge Management Systems
Competitive Strategy Concepts
Competitive Strategy Concepts
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Competitive forces:
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The rivalry of competitors within its industry
The threat of new entrants into an industry and its markets
The threat posed by substitute products that might capture market share
The bargaining power of customers: Refers to the pressure consumers can exert on businesses
to get them to provide higher quality products, better customer service, and lower prices.
– The bargaining power of suppliers
•
Basic Strategy:
– Cost Leadership Strategy: Becoming a low-cost producer of products and services in the
industry or finding ways to help suppliers or customers reduce their costs or increase the costs
of competitors.
– Differentiation Strategy: Developing ways to differentiate a firm’s products and services from
those of its competitors or reduce the differentiation advantages of competitors.
– Innovation Strategy: Finding new ways of doing business(developing unique products and
services or entering unique markets).
– Growth Strategies: Significantly expanding a company’s capacity to produce goods and
services, expanding into global markets, diversifying into new products and services, or
integrating into related products and services.
– Alliance Strategies: Establishing new business linkages and alliances with customers,
suppliers, competitors, consultants, and other companies.
Strategic Uses of Information
Technology
Example
Other Strategic Uses of Information
Technology
Building a Customer-Focused Business
The Value Chain and Strategic IS
Reengineering Business Processes
Example
Becoming an Agile Company
How information technology can help a company be an agile competitor, with the help of customers and business partners.
Creating a Virtual Company
Knowledge Management Systems