Module
Instructor’s Manual
1
IT and Business Advantage
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> US$ 2 trillion spent on IT worldwide in 2007
Continued
rapid spending growth
Truly global spending distribution
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Ever increasing dependence on and impact of IT
Search
for opportunity
Avoidance of operational risk
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Module 1 discusses how to leverage IT to create business advantage.
Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009
Module 1: IT and Business Advantage
Overview of Chapters
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Chapter 1
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Chapters 2
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Examines the impact of IT on business models
Chapter 3
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Introduces the organizing framework for the module
Defines a business model
Explores evaluation of business models
Examines the impact of IT on organizational capabilities
Chapter 4
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Examines the impact of IT on business value
Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009
Module 1: IT and Business Advantage
The Five Competitive Forces that Shape Strategy
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Michael Porter’s classical theory of strategy formulation
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Original HBR article in 1979
Simple, powerful description of five forces
Five forces analysis in practice
Five forces distinguished from contemporary “factors” (e.g. the internet)
What can we learn from this article?
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How economic value is created and claimed by participants in a business
network or industry
How IT might change the relative strength of each force
Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009
Module 1: IT and Business Advantage
Amazon.com: The Brink of Bankruptcy
Traces evolution of Amazon.com from founding in 1994 to 2001
 The case ends with the company poised at the “brink of bankruptcy”
 What can we learn from this case?
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Apply business model thinking
Demonstrate how IT can be used as a key driver of business value through its
impact on strategy and organizational capabilities
Identify how to identify IT-enabled proprietary assets that can serve as a
platform to exploit disruptive change
Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009
Module 1: IT and Business Advantage
Canyon Ranch
Founded in 1979
 Leader in health resort and spa industry
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Goal: leverage customer information to increase customer loyalty and
cross-selling opportunities
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Facing increasing competitive pressure
Role of IT in building CRM capabilities
What can we learn from this case?
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How to use information assets to drive business value
How IT can shape strategy and capabilities
Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009
Module 1: IT and Business Advantage
Boeing’s e-Enabled Advantage
Until late 1990s, largest commercial airplane company
 Airline industry faces multiple challenges
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Customers face increased cost pressure
 Fragmented suppliers
 Boeing drops to #2 behind government-subsidized rival, Airbus
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Strategic goal: use IT to regain market dominance
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More information-driven product and service offerings
Improved IT-enabled efficiency
What can we learn from this case?
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How to use IT to differentiate a product and create new revenue streams by
selling packaging and selling information and by creating new service
offerings
Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009
Module 1: IT and Business Advantage
Royal DSM N.V.: IT enabling Business Transformation
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Diversified Netherlands-based company
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Strategic shift from highly cyclical businesses to high growth businesses
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Coal mining, industrial chemicals, life science products, etc.
Rapid divestitures and acquisitions
Use IT to enable rapid growth and acquisition integration
Standardization of IT infrastructure and applications
 IT function shifts from support to strategic
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What can we learn from this case?
How to leverage IT in support of organizational flexibility and agility
 How to use IT to build an organizational platform for business
transformation
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Applegate, L.M., Austin, R.D., and Soule, D.L., Corporate Information Strategy and Management, 8th edition, Burr Ridge, IL: McGraw-Hill/Irwin, 2009