Bài giảng Information Systems in Business - Chapter 2 Competing with Information Technology

Competing withInformation TechnologyChapter2McGraw-Hill/IrwinCopyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.Identify several basic competitive strategies and explain how they use information technologies to confront the competitive forces faced by a businessIdentify several strategic uses of Internet technologies and give examples of how they help a business to gain competitive advantagesGive examples of how business process reengineering frequently involves the strategic use of ITLearning ObjectivesIdentify the business value of using Internet technologies to become an agile competitor or form a virtual companyExplain how knowledge management systems can help a business gain strategic advantagesLearning ObjectivesA strategic information system uses IT to help an organizationGain a competitive advantageReduce a competitive disadvantageMeet other strategic enterprise objectivesWhat is Competitive Advantage?Capability for advantage over competitive forcesLeading the industry in some identifiable waySustains profits above the industry averageHard to maintain over a long period of timeCompetitive Strategy ConceptsRivalry of CompetitorsPositive, natural, healthyThreat of new entrantsApple, TRS 80, Commodore, IBM, HP, Compaq, Gateway, Dell, AcerThreat of substitutesSalon shampoo vs Wal-Mart brandVCR vs DVD vs BluRayCustomer bargaining powerBuy from competitors or don’t buySuppliers bargaining powerYour competitor pays in days not weeksPorter’s Five Forces of CompetitionCost LeadershipBecome low-cost producersHelp suppliers or customers reduce costsIncrease cost to competitorsExample: PricelineDifferentiation StrategySet a firm’s products apart from competitors’Focus on a particular segment or niche marketExample: DellFive Competitive StrategiesInnovation StrategyUnique products, services, or marketsRadical changes to business processesExample: DellGrowth StrategyExpand company’s capacity to produceExpand into global marketsDiversify into new products or servicesExample: Wal-MartCompetitive Strategies (continued)Alliance StrategyIncludes mergers, acquisitions, joint ventures, virtual companiesCustomers, suppliers, competitors, consultants, and other companiesExample: Wal-Mart uses automatic inventory replenishment by supplierCompetitive Strategies (continued)Not mutually exclusiveOne alone won’t usually fix the problemGenerally need a combinationInnovation not necessarily differentiatedKindle v. iPad MP3 players vs iPodGateway made in US, relaxed officeDifferentiation not necessarily innovativeShipping more efficient but not differentTelecom companies competeUsing Competitive StrategiesOther Competitive StrategiesLock in Customers and SuppliersDeter them from switching to competitorsCreate Switching CostsTime, money, effort or inconvenience needed to switch to a competitorRaise Barriers to EntryDiscourage or delay other companies from entering the marketIncrease the technology or investment needed to enterOther Competitive StrategiesBuild a strong IT departmentUse IT to:Take advantage of strategic opportunitiesImprove efficiency of business practicesDevelop products and services that would not be possible without a strong IT capabilityUse IT to do more than automate a system, be creativeCalled BPR or simply ReengineeringRadicalSeeks improvementsHigh potentialHigh riskImportant enabler of reengineeringITProcess teamsCase managersBusiness Process Reengineering Presents products as solutions to problemsCan price as a solution not cost to produceCooperates with customers, suppliers and competitorsBrings products to market as quickly and cost-effectively as possibleThrives on change and uncertaintyResponds to changing customer expectationsLeverages people and knowledgeProvides incentives for responsibility, adaptability, and innovationStrategies for Becoming an Agile CompanyA virtual company uses IT to linkPeopleOrganizationsAssetsIdeasInter-enterprise information systems linkCustomersSuppliersSubcontractorsCompetitorsCreating a Virtual CompanyA knowledge-creating company or learning organizationConsistently creates new business knowledgeDisseminates it throughout the companyBuilds it into its products and servicesBuilding a Knowledge-Creating Company