Why Study 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.
Strategic View of Information
Systems
• Information systems are vital competitive
networks.
• Information systems are a means of
organizational renewal.
• IS are a necessary investment in technologies
that help a company adopt strategies and
business processes that enable it to reengineer
or reinvent itself in order to survive and succeed
in today’s dynamic business environment.
Strategic Information Systems
Definition:
• Any kind of information system that uses
information technology to help an
organization gain a competitive
advantage, reduce a competitive
disadvantage, or meet other strategic
enterprise objectives.
Competitive Forces and
Strategies
Competitive Forces
Definition:
• Shape the structure of competition in its
industry.
Porter’s Competitive Forces
Model
To survive and succeed, a business must
develop and implement strategies to effectively
counter the:
• 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
Competitive Strategies
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Cost Leadership
Differentiation
Innovation
Growth
Alliance
Cost Leadership Strategy
• Becoming a low-cost producer of products
and services
• Finding ways to help suppliers and
customers reduce their costs
• Increase costs of competitors
Differentiation Strategy
• Developing ways to differentiate a firm’s
products and services from its competitors’
• Reduce the differentiation advantages of
competitors
Innovation Strategy
• Development of unique products and services
• Entry into unique markets or market niches
• Making radical changes to the business
processes for producing or distributing products
and services that are so different from the way a
business has been conducted that they alter the
fundamental structure of an industry
Growth Strategy
• Significantly expanding a company’s
capacity to produce goods and services
• Expanding into global markets
• Diversifying into new products and
services
• Integrating into related products and
services
Alliance Strategy
• Establishing new business linkages and
alliances with customers, suppliers,
competitors, consultants, and other
companies