Strategic Information Systems
3-1
Elements of Strategic Management
• Long-Range Planning
• Response Management
• Innovation
Explore the interrelationships...
3-2
Strategic Management
• Innovation
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New products
Extended products
Differentiated products
Super systems
Customer terminals
Electronic delivery
Computer-aided sales
Internet web site
• Role of IT
– Applications
– Reengineering
– Business intelligence
3-3
Figure 03.01
Caterpillar Story
Can we generalize?
Porter’s Competitive Forces Model
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Threat of new competitors
Bargaining power of suppliers
Bargaining power of customers
Threat of substitute products or services
Rivalry among existing firms
3-5
Figure 03.04
Porter’s Competitive Forces Strategies
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Cost leadership
Differentiation
Focus
Strategic positioning
Customer service
3-7
Figure 03.05
Use of Porter’s Model
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List players
Analyze business drivers
Devise a strategy
Investigate supportive information
technologies
3-9
Porter’s Value Chain Analysis
Model
• Primary activities
• Support activities
3-10
Porter’s Value Chain Analysis
Model - Support Activities
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Firm infrastructure
Human resource management
Technology department
Procurement
3-11
Porter’s Value Chain Analysis
Model - Primary Activities
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Inbound logistics
Operations
Outbound logistics
Marketing / sales
Service
3-12
Figure 03.06
Figure 03.07
Porter and Millar Framework
• Industry structure has changed
• Rules of competition have changed
• Organizations have outperformed
competition using IT
3-15
Bakos and Treacy Framework
• Bargaining power and comparative
efficiency
• Search related costs
• Unique product features
• Switching costs
• Internal efficiency
• Interorganizational efficiency
3-16
Porter and Millar
Five-Step Process
• Access information intensity
• Determine the role of IT in the industry
structure
• Identify and rank the ways in which IT can
create competitive advantage
• Investigate how IT might spawn new
businesses
• Develop a plan for taking advantage of IT
3-17
Strategic Information Systems
Applications
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Cost leadership
Differentiation
Growth
Alliances
Innovation
Improve internal efficiency
Customer-oriented approaches
3-18
Strategic Information Systems
Applications
• Florida Power and Light - computerized
TQM
• Geisinger - intranet
• J.C. Penny - custom made suits
• MacGregor - EDI
• Otis: IT used to block competitors
3-19