Strategic Information Systems 1 Elements of Strategic Management

Strategic Information Systems 1

Elements of Strategic Management • Long-Range Planning • Response Management • Innovation Explore the interrelationships. . . 2

Strategic Management • Innovation – – – – New products Extended products Differentiated products Super systems Customer terminals Electronic delivery Computer-aided sales Internet web site • Role of IT – Applications – Reengineering – Business intelligence 3

Figure 03. 01 Caterpillar Story Can we generalize?

Porter’s Competitive Forces Model • • • Threat of new competitors Bargaining power of suppliers Bargaining power of customers Threat of substitute products or services Rivalry among existing firms 5

Figure 03. 04

Porter’s Competitive Forces Strategies • • • Cost leadership Differentiation Focus Strategic positioning Customer service 7

Figure 03. 05

Use of Porter’s Model • • List players Analyze business drivers Devise a strategy Investigate supportive information technologies 9

Porter’s Value Chain Analysis Model • Primary activities • Support activities 10

Porter’s Value Chain Analysis Model - Support Activities • • Firm infrastructure Human resource management Technology department Procurement 11

Porter’s Value Chain Analysis Model - Primary Activities • • • Inbound logistics Operations Outbound logistics Marketing / sales Service 12

Figure 03. 06

Figure 03. 07

Porter and Millar Framework • Industry structure has changed • Rules of competition have changed • Organizations have outperformed competition using IT 15

Bakos and Treacy Framework • Bargaining power and comparative efficiency • Search related costs • Unique product features • Switching costs • Internal efficiency • Interorganizational efficiency 16

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 17

Strategic Information Systems Applications • • Cost leadership Differentiation Growth Alliances Innovation Improve internal efficiency Customer-oriented approaches 18

Strategic Information Systems Applications • Florida Power and Light - computerized TQM • Geisinger - intranet • J. C. Penny - custom made suits • Mac. Gregor - EDI • Otis: IT used to block competitors 19