Organizational Business Environment Strategy and Competitive Advantage 2

Organizational Business Environment, Strategy, and Competitive Advantage – 2 Sources: (1) Adapted from: Chapter 2, in Rainer, Kelly, Prince, Brad and Watson, Hugh, Management Information Systems: Moving Business Forward, John Willey & Sons, Inc. : New Jersey, 3 rd Edition, 2015; (2) Various online resources as indicated. Updated: Celeste Ng, March 2020

Contents 1. Business Environment, Business Pressures壓力, Organizational Responses, and Information Technology Support • Identify effective IT responses to different kinds of business pressures(有效的IT對 應). 2. Competitive Advantage and Porter’s five competitive forces 3. Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces應對波特五種競爭壓力的 戰略.

1. Business Environment & Business Pressures q. Business Environment q The combination of economic/market, Physical /IT environment實體的環境 (e. g. IT development), social, legal法律and political factors in which businesses conduct their operations. q. Business Pressures q. Significant changes in any of these factors are likely to create Business Pressures on organizations.

Figure 2. 1: Business Pressures, Organizational Performance & Responses, and IT Support

1 -1 Economic/Market Pressures市場壓力 – Globalization全球化 Globalization – The integration and interdependence一體化和相互依賴 (IT support: rapid IT support advances in information technology) – Changing Nature of the Workforce員 團隊性質的改變 Changing nature of workforce – The workforce … is becoming more diversified. Increasing numbers of women, single parents, minorities少數民族, and persons with disabilities殘障are now employed in all types of positions. Powerful customers – Powerful強大Customers – Consumer sophistication and expectations成熟和期望increase as customers become more knowledgeable about the products and services they acquire. – (IT support: Customers can use the Internet to find detailed information about IT support products and services, to compare prices, and to purchase items at electronic auctions. )

1 -2 Physical / Technology Pressures Technological innovation and obsolescence v. Technological Innovation and Obsolescence 過時 v. Client-side: Windows 7 Windows 10 v. Server-side: Win Server 2008 Win Server 2016/2019 v Substitute Technology substitute v. Improved technologies rapidly create or support substitutes for products and service. Information overload v. Information Overload 信息過量 v. Internet and other telecommunications networks are bringing a flood of information to managers.

1 -3 Societal/Political/Legal Pressures • Social Pressures – Social Responsibility Social responsibilities • Philanthropy慈善事業to education Philanthropy • Green IT • Ethics relates to general standards of right and wrong Ethics Compliance with Government Regulations • Legal Pressures – Government Regulations • Compliance with Government Regulations (e. g. Sarbanes–Oxley Act; IFRS-國際財務報告準則; Food Law - sugar, coloring, carcinogenic elements). • Political Pressures – tax policy, freedom of the press, competition • Organizations have been under increased pressure to protect regulation, government stability, import restrictions進口限制, themselves against terrorist attacks consumer protection消費者保護法 Source: https: //pestleanalysis. com/political-factors-affecting-business/

Legal Source: http: //investtaiwan. org/eng/show. jsp? ID=8 Prepared by: Celeste Ng

Legal Source: https: //www. fda. gov. tw/EN/law. aspx? cid=16 Prepared by: Celeste Ng

Political Source: Financial Times, 24 September, 2018, URL: https: //www. ft. com/content/d 2 b 097 d 2 -bfa 9 -11 e 8 -95 b 1 -d 36 dfef 1 b 89 a Prepared by: Celeste Ng

Bloomberg, 2017, URL: Political Source: http: //investtaiwan. org/eng/show. jsp? ID=8 Prepared by: Celeste Ng

Political Source: Business News, 2017, URL: https: //www. reuters. com/article/us-applefoxconn-wisconsin-id. USKBN 1 AB 258 Governor - 州長 incentives subsidy - 政府獎勵補貼 Prepared by: Celeste Ng

Political Source: CNBC, 2018, URL: https: //www. cnbc. com/2018/12/18/huaweicfo-meng-wanzhou-extradition-case-whathappens-next. html Iran sanctions violations - 伊朗制裁違法行為 fraud allegations involving the banks - 涉及銀行的欺 詐指控 (欺騙銀行) Prepared by: Celeste Ng

Social Source: Far Eastern Group Prepared by: Celeste Ng

Social Source: Far Eastern Group Prepared by: Celeste Ng

Social URL: http: //www. msn. com/en-us/news/world/shocksadness-but-no-panic-minutes-that-saved-notredame/ar-BBW 0 y. Qk? ocid=ientp Notre Dame - 巴黎圣母院 Prepared by: Celeste Ng

Social URL: https: //www. npr. org/2019/04/16/714116303/donation -pledges-roll-in-for-notre-dames-reconstruction The donors include billionaire Francois. Henri Pinault, owner of the luxury group Kering, who pledged 100 million euros. His Kering rival, billionaire businessman and owner of LVMH luxury goods group Bernard Arnault, LVMH luxury goods group said his family and company will donate 200 million euros. The Bettencourt Meyers family, owners of the French cosmetic company L'Oréal, said they and the Bettencourt Schueller Foundation will donate 200 million euros. The French oil company Total is pledging French oil company 100 million euros. Almost a dozen other French companies and banks are pledging tens of millions of euros more and technical expertise to aid the reconstruction, according to Reuters. Prepared by: Celeste Ng

1 -4 Organizational Responses組織反應 - to the various pressures by implementing v Strategic Systems v Customer Focus v Provide superb customer service can make the difference between attracting and retaining customers留住客戶versus losing them to competitors. Numerous IT tools and business processes have been designed to keep customers happy. v Make-to-Order按訂單生產 v A strategy of producing customized (made to individual specifications) products and services v Mass Customization v A large quantity of items, but it customizes them to match the needs and preferences of individual customers. Mass customization is essentially an attempt to perform make-to-order on a large. v E-Business and E-Commerce v Electronic commerce (EC or e-commerce): describes the process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet. v E-business: includes servicing customers, collaborating with business partners, and performing electronic transactions within an organization.

Competitive Advantage and Porter’s Competitive Forces Model 2 -1. Competitive advantage 2 -2. Porter’s Competitive Forces Model 2 -3. Porter’s Value Chain Model

2 -1. Competitive Advantage § Any assets資產that provide an organization with an edge against its competitors針對其競 爭對手的優勢in some measure such as cost, quality, or speed. It also helps an organization to control a market and to accrue larger-thanaverage profits累計超越平均水平的利潤.

2 -1 Porter’s Five Forces Model波特的五力競爭模型 1. The threat of new competitors 2. The bargaining power of suppliers 3. The bargaining power of customers (buyers) 4. The threat of substitute products or services 5. The rivalry among existing firms in the industry在行業內現有企業之間的競爭

Figure 2. 2: Porter’s Competitive Forces Model

2 -2 Porter’s Value Chain Model v. Value Chain v. A sequence of activities活動序列through which the organization’s inputs, are transformed into more valuable outputs v. Two Categories of Organization Activities in the Value Chain v. Primary Activities主要活動 v. Relate to the production and distribution生產和分銷of the firm’s products and services. These activities create value for which customers are willing to pay v. Support Activities 支援性活動 v. Supporting the primary activities, but do not add value directly to th firm’s products or services

2 -2 -1 Primary Activities (Typical Manufacturing Companies) v. Inbound logistics內部物流 (warehouse, quality control) v. Operations 運作 (manufacturing and testing, packaging) v. Outbound logistics對外物流 (delivery and invoice) v. Marketing and sales (order taking) v. Services (warranty)

2 -2 -2 Support Activities v. Accounting and finance v. Human Resources Management v. Product and Technology (R&D) v. Procurement

Figure 2. 3: Porter’s Value Chain Model

3. Strategies for Competitive Advantage 1. 2. 3. 4. 5. Cost leadership strategy成本領導戰略 – Produce products and/or services at the lowest cost in the industry (e. g. , Walmart’s automatic inventory replenishment system). Differentiation strategy差異化策略 – Offering different products, services, or product features than your competitors (e. g. , Southwest Airlines has differentiated itself as a low-cost, short-haul短距離, express airline). Innovation strategy創新戰略 – Introduce new products and services, add new features to existing products and services, Organizational effectiveness strategy組織效率戰略 – Executes its internal business processes so that it performs these activities more effectively than its rivals. Such improvements increase quality, productivity, and employee and customer satisfaction while decreasing time to market Customer orientation strategy客戶導向戰略 – Concentrate on making customers happy. Web-based systems are particularly effective in this area because they can create a personalized, one -to-one relationship with each customer.

LINE CEO – “Customer focused” URL: https: //www. techinasia. com/lin e-strategy-ceo-takeshi-idezawa

LINE CEO – “Customer focused” URL: https: //www. techinasia. com/linestrategy-ceo-takeshi-idezawa

Figure 2. 4: Strategies for Competitive Advantage

What are the “strategies” used by Samsung? – Samsung Foldable Phone – (2019, URL: https: //news. yahoo. com/apple-may-playingsamsung-displays-141600972. html) Other video: https: //www. tomsguide. com/us/galaxy-fold-specs-price-release-date, news-29463. ht