BUSI 240
Introduction to Information
Systems
Tuesday & Thursday 8:05am – 9:30am
Wyant Lecture Hall
Please initial the roster on the back table.
The course syllabus is available at:
http://online.apu.edu
Current Events – What’s going on?
More tech workers get bonuses, pay raises: survey
More U.S. technology and engineering workers got bonuses and
pay raises last year than in 2009, but the pay hikes were tiny for
professionals outside large corporations and Silicon Valley,
according to a survey by Dice.com, part of online recruiter Dice
Holdings Inc.
The average U.S. information technology (IT) worker earned
$79,384, adding less than $1,000 from the prior year. About half of
IT workers got raises, up from a third in 2009.
http://www.reuters.com/article/idUSTRE70I3KP20110119
2-2
Current Events – What’s going on?
HP Technologies Drive the Dallas Cowboys'
Stadium
http://www.eweek.com/c/a/IT-Infrastructure/HP-Technologies-Drive-theDallas-Cowboys-Stadium-777293/
2-3
Current Events – What’s going on?
Apple Vs. Google
The battle over the future of computing
Video:
http://feedroom.businessweek.com/index.jsp?fr_story=510b221a484d8825ef43e0f9dd00098011693a5d
2-4
Current Events – What’s going on?
Apple Approves Google Voice App for
iPhone App Store
More than 14 months after shutting the door on the
official and third-party applications for Google Voice,
Apple has relented, approving GV Mobile for the
iPhone.
http://www.eweek.com/index2.php?option=content&task=view&id=63473&pop=1&hide_ads=1&page=0&hide_j
s=1&catid=13
2-5
Current Events – What’s going on?
Meet the Maker of Apple's Other Tablet
The Modbook, a MacBook modified for use
with a digital pen, is the brainchild of former
Apple exec Andreas Haas, whose company
Axiotron offers it.
http://www.businessweek.com/print/technology/content/jan2010/tc20100122_583507.htm
2-6
Current Events – What’s going on?
Why Apple Leaves Low-End Computers to
the Competition
Its adherence to a graceful design esthetic and
a limited lineup keeps margins sky-high.
Macs accounted for 18.9% of all laptops and
desktops sold in U.S. retail outlets. For
computers priced above $1,000, Apple's share
was an astonishing 89%.
http://www.businessweek.com/magazine/content/09_47/b4156000345421.htm?chan=technology_tech+maven
+page+-+new_computer+reviews
2-7
Chapter
2a
Competing with Information
Technology
How can a business use IT to compete?
Competitive strategies and forces
McGraw-Hill/Irwin
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved.
Strategic IT
 Technology
is no longer an afterthought in forming
business strategy, but the actual cause and driver.
 IT can change the way businesses compete.
 A strategic information system is
 Any
kind of information system
 That uses IT to help an organization



2-9
Gain a competitive advantage
Reduce a competitive disadvantage
Or meet other strategic enterprise objectives
Competitive Forces and Strategies
2-10
Competitive Forces
 If
a business wants to succeed must develop
strategies to counter these forces:
 Rivalry
of competitors within its industry
 Threat of new entrants into an industry and its markets
 Threat posed by substitute products which might
capture market share
 Bargaining power of customers
 Bargaining power of suppliers
2-11
Five Competitive Strategies
 Cost
Leadership
 Become
low-cost producers
 Help suppliers or customers reduce costs
 Increase cost to competitors
 Example, Priceline uses online seller bidding so buyer
sets the price
 Differentiation
 Develop
Strategy
ways to differentiate a firm’s products from its
competitors
 Can focus on particular segment or niche of market
 Example, Moen uses online customer design
2-12
Competitive Strategies (cont.)

Innovation Strategy
 Find new ways of doing business
Unique products or services
 Or unique markets
 Radical changes to business processes to alter the fundamental
structure of an industry

Example, Amazon uses online full-service customer systems
Growth Strategy
 Expand company’s capacity to produce
 Expand into global markets
 Diversify into new products or services
 Example, Wal-Mart uses merchandise ordering by global
satellite tracking


2-13
Competitive strategies (cont.)
 Alliance
Strategy
 Establish

linkages and alliances with
Customers, suppliers, competitors, consultants and other
companies
 Includes
mergers, acquisitions, joint ventures, virtual
companies
 Example, Wal-Mart uses automatic inventory
replenishment by supplier
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Using these strategies
 The
strategies are not mutually exclusive
 Organizations use one, some or all
2-15
Using IT for these strategies
2-16
Other competitive strategies
 Lock
in customers and suppliers
 And
lock out competitors
 Deter them from switching to competitors
 Build in switching costs
 Make customers and suppliers dependent on the use of
innovative IS
 Barriers
to entry
 Discourage
or delay other companies from entering
market
 Increase the technology or investment needed to enter
2-17
Other competitive strategies (cont.)
 Include
IT components in products
 Makes
substituting competing products more difficult
 Leverage
investment in IT
 Develop
IT
2-18
new products or services not possible without
Customer-focused business
 What
is the business value in being customerfocused?
 Keep
customers loyal
 Anticipate their future needs
 Respond to customer concerns
 Provide top-quality customer service
 Focus
on customer value
 Quality
value
2-19
not price has become primary determinant of
How can we provide customer
value?
 Track
individual preferences
 Keep up with market trends
 Supply products, services and information anytime,
anywhere
 Provide customer services tailored to individual
needs
 Use Customer Relationship Management (CRM)
systems to focus on customer
2-20
Building customer value using the
Internet
2-21
Value Chain
 View
the firm as a chain of basic activities that add
value to its products and services
 Activities are either
 Primary
processes directly related to manufacturing or
delivering products
 Support processes help support the day-to-day running
of the firm and indirectly contribute to products or
services
 Use
the value chain to highlight where competitive
strategies can best be applied to add the most value
2-22
Using IS in the value chain
2-23
Value Reference Model
2-24