IT creates applications that provide strategic advantages to companies
IT is a competitive weapon
IT supports strategic change, e.g, re-engineering
IT networks with business partners
IT provides cost reduction
IT provides competitive business intelligence
14. Response Strategies ( Porter , 1985) FOCUS Selecting a niche market and achieving cost leadership and/or differentation. DIFFERENTATION Being unique in the industry COST LEADERSHIP Providing products and/or services at the lowest cost in the industry.
22. McFarlan’s Portfolion Framework (1984) High Current Low Low High Future High Potential Applications that may be important in achieving future business success Support Applications that are currently valuable and desirable but not critical for future business success Strategic Applications that are critical for future business strategy Key Operational Applications upon which the organisation currently depends for success
23. McFarlan’s Portfolion Framework (1984) High Current Low Low High Future High Potential Intelligent data mining e-mail direct marketing Support frequent flyer account tracking Training on-line Wireless SMS info Strategic e-procurement Electronic ticketing Agent’s management Key Operational Scheduling on-line Online parts ordering Maintenance online
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Today’s action
What do these suggest in terms of IT working envirnments? Mainframe – computers hidden away by anoraks doing repetitive jobs Micro’s – on desktops doing support jobs Networks - ???????? Global business e commerce etc
Don’t confuse with Porter’s 5 comp forces Disintermediation – getting rid of the intermediaries – agents. Between buyers and sellers Commission cuts –similar to above Rebates – buying power – supermarkets Online competitors – Reverse auction – an ebuying mechanism – sellers are invited to bid for fullfilment of an order
How?????
Can mean the difference between success and failure Hertz monitor car rental prices Banks monitor each other’s rates and services Supermarkets prices Chat rooms – for consumer tips Complaints – hotels and holiday resorts
What industries have been changed for ever by IT/IS?
Different competitive environments requiring different strategic information needs Competing on margins rationalisation of the industry will be taking place, aiming to reduce costs. Supplier links will be vitally important . Competing on differences of features of product or services the customer database is of prime importance.
Growth – Reaching customers that otherwise wouldn’t – new marketing channels Alliances – B2B – allainces with suppliers – JIT, replenishment Innovation – Such as what? Improve internal – BPR later CRM – one to one environment - call centres E-bookers holidays
Careful one companies support is another’s key operational For example, on-line training could be key operational for a software vendor
For Analyzing Existing, Planned & Potential Information Systems Can be applied to any type of application Current and Future as perceived by management
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