Strategic Information Systems
3-1
Strategic Advantage and IT
• Strategic Information System (SIS)
• Elements of strategic management
3-2
Elements of Strategic
Management
• Innovation
• Role of IT
• Competitive intelligence
3-3
Competitive Intelligence
• Internet
• Competitive strategy and sustainable
advantage
3-4
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
Porter’s Competitive Forces
Strategies
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Cost leadership
Differentiation
Focus
Strategic positioning
Customer service
3-6
Use of Porter’s Model
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List players
Analyze business drivers
Devise a strategy
Investigate supportive information
technologies
3-7
Porter’s Value Chain Analysis
Model
• Primary activities
• Support activities
3-8
Porter’s Value Chain Analysis
Model - Primary Activities
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Inbound logistics
Operations
Outbound logistics
Marketing / sales
Service
3-9
Porter’s Value Chain Analysis
Model - Support Activities
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Firm infrastructure
Human resource management
Technology department
Procurement
3-10
Strategic Information Systems
Frameworks
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Porter and Millar’s framework
Wiseman and MacMillan framework
Bakos and Treacy framework
Customer resource life cycle framework
3-11
Porter and Millar Framework
• Industry structure has changed
• Rules of competition have changed
• Organizations have outperformed
competition using IT
3-12
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
3-13
Wiseman and MacMillan
Framework
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Based on Porter’s strategies
Innovation
Growth
Alliance
Time
3-14
Bakos and Treacy Framework
• Bargaining power and comparative
efficiency
• Search related costs
• Unique product features
• Switching costs
• Internal efficiency
• Interorganizational efficiency
3-15
Customer Resource Life Cycle
Framework
• Ives and Learmouth, 1984
• Customer relationship key to strategic
advantage?
• Thirteen fundamental stages of the customer
relationship
3-16
Framework for Global
Competition
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Apply IT through global business drivers
Quality
Risk reduction
Suppliers
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
Strategic Information Systems
Applications
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Port of Singapore: intelligent systems
Volvo: global network
Baxter International: IT for the customer
Merril Lynch: cash management accounts
system
• American Airlines: reservation system
3-20
Strategic Information Systems
Applications
• Odense Shipyard: CAD
• Dun and Bradstreet: credit evaluation
• National Car Rental: car pickup
3-21
Sustaining A Strategic Advantage
• Inward systems: efficient, effective
• Comprehensive, innovative and expensive
system: difficult to duplicate
3-22
Managerial Issues
• Implementing strategic information systems
can be risky
• Strategic information systems require
planning
• Sustaining competitive advantage is
challenging
• Ethical issues
3-23
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3-24