Download - Business Stratedgy IT
-
8/9/2019 Business Stratedgy IT
1/44
-
8/9/2019 Business Stratedgy IT
2/44
- 2 -© Minder Chen, 1993-2013
Strategy and IS Industry Structure
(5 Competing Forces)
Competiti e
Str!tegy
"!#ue Ch!in
$n!#ysis
%usiness ProcessDesign & 'eengineering
In orm!tionSystems
-
8/9/2019 Business Stratedgy IT
3/44
- 3 -© Minder Chen, 1993-2013
Business Strategies• he *o+ o the str!tegist is to underst!nd !nd
cope ith competition .• Competition or profits goes +eyond
est!+#ished industry ri !#s to inc#ude our othercompetiti e orces- customers, supp#iers,
potenti!# entr!nts, !nd su+stitute products.• he e tended ri !#ry th!t resu#ts rom !## i e
orces de ines !n industry/s structure !ndsh!pes the n!ture o competiti e inter!ction
ithin !n industry.
-
8/9/2019 Business Stratedgy IT
4/44
- 4 -© Minder Chen, 1993-2013
Industry Structure and Forces• Forces !re intense- !ir#ines, te ti#es, !nd hote#s,
!#most no comp!ny e!rns !ttr!cti e returns onin estment.
• Forces !re +enign- so t !re, so t drin0s, !ndtoi#etries, m!ny comp!nies !re pro it!+#e
• Industry structure, m!ni ested in thecompetiti e orces, sets industry profitability &competitiveness in the medium !nd #ong run.
•Industry structure !nd ! irm strategic positioning
• Identi y the strongest competitive force ororces or str!tegy ormu#!tion.
-
8/9/2019 Business Stratedgy IT
5/44
- 5 -© Minder Chen, 1993-2013
New Entrances or Substitutes• 'i !#ry is o ten ierce in commodity industries•
Photogr!phic i#m industry- 1od!0 !nd Fu*i – 1ey competing orce – Po#!roid Su+stituti e products&ser ices
http-&&en. i0ipedi!.org& i0i&Po#!roid2Corpor!tion
• 3e entr!nts !re di ersi ying rom otherm!r0ets, they c!n #e er!ge e isting c!p!+i#ities
– Pepsi did hen it entered the +ott#ed !ter industry, –
Microso t did hen it +eg!n to o er internet+ro sers ( embrace and extend ) – $pp#e did hen it entered the music distri+ution
+usiness.http://www.businessweek.com/199 /29/9 0!15.htm
"#$"%& M"C'($()* + rt 1 "#$"%& M"C'($()* + rt 2
http://en.wikipedia.org/wiki/Polaroid_Corporationhttp://www.businessweek.com/1996/29/960715.htmhttp://www.businessweek.com/1996/29/960715.htmhttp://www.businessweek.com/1996/29/b34841.htmhttp://www.businessweek.com/1996/29/b34842.htmhttp://www.businessweek.com/1996/29/b34842.htmhttp://www.businessweek.com/1996/29/b34841.htmhttp://www.businessweek.com/1996/29/960715.htmhttp://en.wikipedia.org/wiki/Polaroid_Corporation
-
8/9/2019 Business Stratedgy IT
6/44
- -© Minder Chen, 1993-2013
Five Competing Forces
ou*ube ideo: *he )i e Competiti e )orces *h t $h pe $tr te
http://www.google.com/url?sa=t&source=web&cd=3&ved=0CBkQtwIwAg&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DmYF2_FBCvXw&ei=D7WrTKPROoX2tgPoyNXyAw&usg=AFQjCNEsm-DJP0-Eonrh5nvlI1uHaRzDOQhttp://www.google.com/url?sa=t&source=web&cd=3&ved=0CBkQtwIwAg&url=http%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DmYF2_FBCvXw&ei=D7WrTKPROoX2tgPoyNXyAw&usg=AFQjCNEsm-DJP0-Eonrh5nvlI1uHaRzDOQ
-
8/9/2019 Business Stratedgy IT
7/44- ! -© Minder Chen, 1993-2013
Sources of Switc ing Costs• 4oy!#ty progr!ms- S itching c!n c!use customers to #ose out on
progr!m +ene its. hin0 re uent purch!ser progr!ms th!t o er6mi#es7 or 6points7 (!## en!+#ed !nd dri en +y so t !re).
• 4e!rning costs- S itching techno#ogies m!y re uire !n in estmentin #e!rning ! ne inter !ce !nd comm!nds.
• In orm!tion !nd d!t!- Users m!y h! e to reenter d!t!, con ert i#esor d!t!+!ses, or m!y e en #ose e!r#ier contri+utions on incomp!ti+#esystems.
• Fin!nci!# commitment- C!n inc#ude in estments in nee uipment, the cost to !c uire !ny ne so t !re, consu#ting, ore pertise, !nd the de !#u!tion o !ny in estment in prior techno#ogiesno #onger used.
• Contr!ctu!# commitments- %re!0ing contr!cts c!n #e!d tocompens!tory d!m!ges !nd h!rm !n org!ni8!tion/s reput!tion !s !re#i!+#e p!rtner.
• Se!rch costs- Finding !nd e !#u!ting ! ne !#tern!ti e costs time!nd money.
-
8/9/2019 Business Stratedgy IT
8/44- -© Minder Chen, 1993-2013
Barriers to Entry • Supp#y9side economies o sc!#e•
Dem!nd9side +ene its o sc!#e (net or0 e ects)• Customer s itching costs-
– Enterprise resource p#!nning (E'P) so t !re is !ne !mp#e o ! product ith ery high s itching costs.
• C!pit!# re uirements – Semiconductor oundry s. corner co ee shop
• Incum+ency !d !nt!ges independent o si8e – %r!nd, e periences cur e
• Une u!# !ccess to distri+ution ch!nne#s – Using e9commerce or direct s!#es
• 'estricti e go ernment po#icy
-
8/9/2019 Business Stratedgy IT
9/44- 9 -© Minder Chen, 1993-2013
Emergingtechno#ogies
&ntr thre t/&ntr b rriers
http://www. outube.com/w tch 6m )27)8C w
http://www.youtube.com/watch?v=mYF2_FBCvXwhttp://www.youtube.com/watch?v=mYF2_FBCvXw
-
8/9/2019 Business Stratedgy IT
10/44- 10 -© Minder Chen, 1993-2013
!isruptive Tec nology
http://en.wikipedi .or /wiki/)i e:%isrupti etechno o . i;
-
8/9/2019 Business Stratedgy IT
11/44- 11 -© Minder Chen, 1993-2013
Type of Innovations• Sust!ining- $n inno !tion th!t does not ! ect
e isting m!r0ets. – E o#ution!ry- $n inno !tion th!t impro es ! product
in !n e isting m!r0et in !ys th!t customers !ree pecting. (E.g., ue# in*ection )
– 'e o#ution!ry (discontinuous, r!dic!#)- $n inno !tionth!t is une pected, +ut ne erthe#ess does not ! ecte isting m!r0ets. (E.g., the !utomo+i#e )
• Disrupti e- $n inno !tion th!t cre!tes ! nem!r0et +y !pp#ying ! di erent set o !#ues, hichu#tim!te#y (!nd une pected#y) o ert!0es !ne isting m!r0et. (E.g., the #o er pricedFord Mode# )
8ower, Christensen, C ton M. +1995 . ?%isrupti e *echno o ies: C tchin the @ e?Harvard Business Review , < nu r A)ebru r 1995
http://en.wikipedia.org/wiki/Fuel_injectionhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Ford_Model_Thttp://en.wikipedia.org/wiki/Harvard_Business_Reviewhttp://en.wikipedia.org/wiki/Harvard_Business_Reviewhttp://en.wikipedia.org/wiki/Ford_Model_Thttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Fuel_injection
-
8/9/2019 Business Stratedgy IT
12/44- 12 -© Minder Chen, 1993-2013
Innovator"s !ilemma• :ood irms !re usu!##y ! !re o the inno !tions, +ut their
+usiness en ironment does not !##o them to pursue them
hen they irst !rise, +ec!use they !re not pro it!+#eenough !t irst !nd +ec!use their de e#opment c!n t!0esc!rce resources ! !y rom th!t o sust!ining inno !tions( hich !re needed to compete !g!inst current competition).
• ;:ener!##y, disrupti e inno !tions ere techno#ogic!##ystr!ight or !rd, consisting o o 9the9she# components puttogether in ! product !rchitecture th!t !s o ten simp#erth!n prior !ppro!ches. hey o ered #ess o h!t customersin est!+#ished m!r0ets !nted !nd so cou#d r!re#y +einiti!##y emp#oyed there. hey o ered ! di erent p!c0!ge o!ttri+utes !#ued on#y in emerging m!r0ets remote rom,!nd unimport!nt to, the m!instre!m.;
B http://en.wikipedi .or /wiki/%isrupti e7inno tion nd Christensen, C ton M. +199! , The innovator's dilemma: when new technologies cause great firms to fail , 8oston, M ss chusetts, $D: E r rd 8usiness $choo ress , "$8# 9! -0- !5 4-5 5-2 .
http://en.wikipedia.org/wiki/Disruptive_innovationhttp://en.wikipedia.org/wiki/Clayton_M._Christensenhttp://books.google.com/books/about/?id=SIexi_qgq2gChttp://books.google.com/books/about/?id=SIexi_qgq2gChttp://en.wikipedia.org/wiki/Harvard_Business_School_Presshttp://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://en.wikipedia.org/wiki/Special:BookSources/978-0-87584-585-2http://en.wikipedia.org/wiki/Special:BookSources/978-0-87584-585-2http://en.wikipedia.org/wiki/International_Standard_Book_Numberhttp://en.wikipedia.org/wiki/Harvard_Business_School_Presshttp://books.google.com/books/about/?id=SIexi_qgq2gChttp://en.wikipedia.org/wiki/Clayton_M._Christensenhttp://en.wikipedia.org/wiki/Disruptive_innovation
-
8/9/2019 Business Stratedgy IT
13/44- 13 -© Minder Chen, 1993-2013
Strategy and t e Internet
-
8/9/2019 Business Stratedgy IT
14/44- 14 -© Minder Chen, 1993-2013
#pple"s Entrance to !ifferent Industries
-
8/9/2019 Business Stratedgy IT
15/44- 15 -© Minder Chen, 1993-2013
#pple• $pp#e Computer Inc. $pp#e Inc.•
$pp#e to M!c• iPod < i une < music• $pp#e Stores (see te!ching note)• iPhone < i une < $pps• iP!d < i une < $pps < i%oo0
• From ! system to !n eco9system• From h!rd !re to so t !re to contents !nd
ser ices
-
8/9/2019 Business Stratedgy IT
16/44- 1 -© Minder Chen, 1993-2013
#pple Stores Services• Intensi e contro# o ho emp#oyees inter!ct ith
customers, scripted tr!ining or on9site techsupport !nd consider!tion o e ery store det!i#do n to the pre9#o!ded photos !nd music on demode ices.
hoto b 8obb 8 nk/Fett "m es
-
8/9/2019 Business Stratedgy IT
17/44- 1! -© Minder Chen, 1993-2013
Customer #udit #pproc
-
8/9/2019 Business Stratedgy IT
18/44- 1 -© Minder Chen, 1993-2013
Competitor #udit #pproac
-
8/9/2019 Business Stratedgy IT
19/44- 19 -© Minder Chen, 1993-2013
$n!#y8ing Competiti e Forces !nd Str!tegic Positioning
http://Gc o.b .ttu.edu/Drc) 10/ pp e te7ch01.pd;
http://qcao.ba.ttu.edu/ArcFall10/applegate_ch01.pdfhttp://qcao.ba.ttu.edu/ArcFall10/applegate_ch01.pdfhttp://qcao.ba.ttu.edu/ArcFall10/applegate_ch01.pdfhttp://qcao.ba.ttu.edu/ArcFall10/applegate_ch01.pdfhttp://qcao.ba.ttu.edu/ArcFall10/applegate_ch01.pdf
-
8/9/2019 Business Stratedgy IT
20/44- 20 -© Minder Chen, 1993-2013
$orter %eneric Strategies• Cost 4e!dership- =igh o#ume !nd #o pro it m!rgin• Di erenti!tion str!tegy- =igh m!rgin&price, #o o#ume
$ource: http://b o s.hbr.or /cs/2011/0 /wh 7hps7dep rture7;rom7the7pc.htm
re d the comments
http://blogs.hbr.org/cs/2011/08/why_hps_departure_from_the_pc.htmlhttp://blogs.hbr.org/cs/2011/08/why_hps_departure_from_the_pc.html
-
8/9/2019 Business Stratedgy IT
21/44- 21 -© Minder Chen, 1993-2013
%eneric Strategies and Industry Forces
-
8/9/2019 Business Stratedgy IT
22/44- 22 -© Minder Chen, 1993-2013
alue C ain
-
8/9/2019 Business Stratedgy IT
23/44- 23 -© Minder Chen, 1993-2013
Internet and alue C ain #nalysis
http://hi hered.mc r w-hi .com/sites/d /;ree/00!3043559/3140 3/(8rien713e7Ch pter72.pd;
$
-
8/9/2019 Business Stratedgy IT
24/44- 24 -© Minder Chen, 1993-2013
alue C ain and E'$( C')( SC)
Supp#y Ch!inM!n!gement
Customer 'e#!tionshipM!n!gement
Enterprise 'esourc eP#!nning
l d
-
8/9/2019 Business Stratedgy IT
25/44- 25 -© Minder Chen, 1993-2013
alue Networ* #udit #pproac
-
8/9/2019 Business Stratedgy IT
26/44
C 5-
Relative SizeSpeed
InnovationQuality
Ability forAction andResponse
OutcomesDrivers of
CompetitiveBehavior
$ !renessMoti !tionC!p!+i#ity
CompetitorAnalysis
Mar etCommonality
ResourceSimilarity
Interfirm Rivalry!Attac " Response
#i elihood of Attac #i elihood of Attac $irst Mover Incentives
#i elihood of Response#i elihood of Re sponse%ype of Competitive
Action
Dependence on theMar et
Resource Availability
Actor&s Reputation
CompetitiveCom petitive
Slo'( Standardor $ast Cycle
Mar et %ypesMar et % ypes
CompetitiveCom petitive
SustainedOutcomesOutcomes
CompetitiveAdvanta)e
%emporaryAdvanta)e*volutionary*volutionar yOutcomesOutcomes
*ntrepreneurial
or Mar et+,o'er
-ro'th+Oriented
ActionFeedbac*
Competiti e Dyn!mcis (Mode# o Inter irm 'i !#ry)-4i0e#ihood o $tt!c0 !nd 'esponse
http://www.wiHiG.com/tutori /3 1-Competiti e-% n mics
l
http://www.wiziq.com/tutorial/381-Competitive-Dynamicshttp://www.wiziq.com/tutorial/381-Competitive-Dynamics
-
8/9/2019 Business Stratedgy IT
27/44- 2! -© Minder Chen, 1993-2013
Five+Force #nalysis vs, Competitive !ynamics )i e-)orce Dn sis Competiti e % n mics
8 sic premise "ndustr structure determinescompetition nd pro;it bi it
Competition is Id n micJ +or inter cti end re ti eK ctions/ responses m tter ;or
;irm per;orm nce=e e o; n sis M cro industr e e Micro ;irm nd ction e e"nte ectu ori in "ndustri or niH tion
economics*heoretic nd empiric work in str te icm n ement eLtended ;rom $chumpeter
nd Dustri n economics
)ocus )i e ;orces th t m ke up theindustr structure
Dction/response d d nd/or indi iduction
Competiti ed nt e
Competiti e d nt e c n becre ted nd sust ined
Competiti e d nt e istime-dependent nd ephemer Kon re ti e d nt es eList
(rient tion "ndustr /en ironment 8 nced m rket-resource +or eLtern -intern consider tion
'e tionshipbetween ;irms
$ mmetric Ds mmetric
Competiti estr te
Feneric t pes 'epertoires o; ctions nd responses
% n micconsider tion
Comp rison between two timepoints
&Lch n e o; ctions nd responses orinter cti e beh iors between two ;irms
http://www.min erchen.com/d /Dc demic7 pers/20127DMD7Competiti e7% n mics*hemes.pd;
' B d i f C i i #d
-
8/9/2019 Business Stratedgy IT
28/44- 2 -© Minder Chen, 1993-2013
'esource+Based iew of Competitive #dvantage
• he str!tegic thin0ing !ppro!ch suggesting th!ti ! irm is to m!int!in sust!in!+#e competiti e!d !nt!ge, it must contro# !n e p#oit!+#eresource, or set o resources, th!t h! e ourcritic!# ch!r!cteristics.
• hese resources must +e – "!#u!+#e, – '!re, – Imper ect#y imit!+#e, !nd – 3on9su+stitut!+#e.
N http-&&en. i0ipedi!.org& i0i&'esource9+!sed2 ie N #icho s C rr, ;Does I M!tter,; -arvard Business 'eview , M!y >?? , pp. AB9A .
(CSUCI 4i+r!ry n#ine D!t!+!se ) !nd 'esponses
P d &M! 0 P i i i $ di $ ! h
http://en.wikipedia.org/wiki/Resource-based_viewhttp://faculty.csuci.edu/minder.chen/MIS310/Reading/JournalArticles.aspxhttp://www.johnseelybrown.com/Web_Letters.pdfhttp://www.johnseelybrown.com/Web_Letters.pdfhttp://faculty.csuci.edu/minder.chen/MIS310/Reading/JournalArticles.aspxhttp://en.wikipedia.org/wiki/Resource-based_view
-
8/9/2019 Business Stratedgy IT
29/44- 29 -© Minder Chen, 1993-2013
Product&M!r0et Positioning $udit $ppro!ch
S $
-
8/9/2019 Business Stratedgy IT
30/44
- 30 -© Minder Chen, 1993-2013
.+Step $rocess
• h!t !re your mission& isions&go!#s
• h!t !re your str!tegies – Product&ser ice str!tegies – M!r0eting&+r!nding str!tegies – echno#ogy str!tegies
• h!t !re your methods orimp#ementing your str!tegies
• =o do you 0no you !re m!0ingprogress to !rds your go!#s
Fi / ti
-
8/9/2019 Business Stratedgy IT
31/44
- 31 -© Minder Chen, 1993-2013
Five /uestions• $tr te is c oice .• 5 choices- a winning
aspiration, where to play, how to win, corecapabilities, andmanagement systems .
• More speci;ic ,str te is ninte r ted set o;choices th t uniGue
positions t e firm in
its industry so s tocre te sust in b ed nt e nd
superior ue re ti eto the competition.
$ource
St S i 0S il C 1
http://www.playingtowin.info/sites/leadingauthorities.drupalgardens.com/files/aPlaybookForStrategy.pdfhttp://www.playingtowin.info/sites/leadingauthorities.drupalgardens.com/files/aPlaybookForStrategy.pdf
-
8/9/2019 Business Stratedgy IT
32/44
- 32 -© Minder Chen, 1993-2013
Stan S i 0Smile Curve1
I%M 4e!ds the !y in the Post9PC Er! @h "8M eLited the C m rket
$ource: http:// sm rterp net.com/b o /2011/0 /ibm- e ds-the-w -in-the-post-pc-er .htm
# l I
http://asmarterplanet.com/blog/2011/08/ibm-leads-the-way-in-the-post-pc-era.htmlhttp://asmarterplanet.com/blog/2011/08/ibm-leads-the-way-in-the-post-pc-era.htmlhttp://asmarterplanet.com/blog/2011/08/ibm-leads-the-way-in-the-post-pc-era.htmlhttp://asmarterplanet.com/blog/2011/08/ibm-leads-the-way-in-the-post-pc-era.html
-
8/9/2019 Business Stratedgy IT
33/44
- 33 -© Minder Chen, 1993-2013
#pple Inc,
St S i 0S il C 1
-
8/9/2019 Business Stratedgy IT
34/44
- 34 -© Minder Chen, 1993-2013
Stan S i 0Smile Curve1
Components of a Business )odel
-
8/9/2019 Business Stratedgy IT
35/44
- 35 -© Minder Chen, 1993-2013
Components of a Business )odel
http://Gc o.b .ttu.edu/Drc) 10/ pp e te7ch01.pd;
$rocess in $erspective
-
8/9/2019 Business Stratedgy IT
36/44
- 3 -© Minder Chen, 1993-2013
$rocess in $erspective
$ource: rocess in erspecti e +or I*e me in, wh re we doin this OprocessP stu;; J , :e!ry 'umm#er
Business $rocesses
-
8/9/2019 Business Stratedgy IT
37/44
- 3! -© Minder Chen, 1993-2013
Business $rocesses• he order m!n!gement process consists o
se er!# +usiness processes !nd crosses the+ound!ries o tr!dition!# +usiness unctions.
http://hi hered.mc r w-hi .com/sites/d /;ree/00!3043559/3140 3/(8rien713e7Ch pter72.pd;
#n Example of !etail alue C ain #ctivities
-
8/9/2019 Business Stratedgy IT
38/44
- 3 -© Minder Chen, 1993-2013
#n Example of !etail alue C ain #ctivities
IT $ermeates t e alue C ain
-
8/9/2019 Business Stratedgy IT
39/44
- 39 -© Minder Chen, 1993-2013
IT $ermeates t e alue C ain
$ource: Eow in;orm tion i es ou competiti e d nt e.
Industrial alue C ain
-
8/9/2019 Business Stratedgy IT
40/44
- 40 -© Minder Chen, 1993-2013
Industrial alue C ain
Industry alue C ain
-
8/9/2019 Business Stratedgy IT
41/44
- 41 -© Minder Chen, 1993-2013
Industry alue C ain
Dcti it Q r Ps ue Ch in
-
8/9/2019 Business Stratedgy IT
42/44
- 42 -© Minder Chen, 1993-2013
Dcti it
P'IM$'G $C I"I IES
"nbound =o istics"*-en b ed
-
8/9/2019 Business Stratedgy IT
43/44
- 43 -© Minder Chen, 1993-2013
p)orce
; p )
*hre t o; #ew&ntr nts
Q r Ps "* supports its ti ht -knit roup o; desi ners, m rket speci ists, productionm n ers nd production p nners. #ew entr nts re un ike to pro ide "* to supportre tionships th t h e been bui t o er time. )urther it h s rich in;orm tion repositor
bout customers th t wou d be h rd to rep ic te.
8 r ininower o;
8u ers
@ith its const nt in;usion o; new products, bu ers re dr wn to Q r stores. Q rbo sts more th n 11,000 new desi ns e r, where s competitors t pic o;;er on2,000 A 4,000. )urther, bec use o; the ow in entor th t the Q r stores stock, there u rs bu products the ike when the see them bec use the re ike to be onethe neLt time the isit the store. More recent Q r h s emp o ed ser techno o tome sure 10,000 women o unteers so th t it c n dd the me surements o; Ore Pcustomers into its in;orm tion repositories. *his me ns th t the new products wi bemore ike to ;it Q r customers.
8 r ininower o;
$upp iers
"ts computer-contro ed cuttin m chine cuts up to 1000 ers t time. "t then sendsthe cut m teri s to supp iers who sew the pieces to ether. *he supp iersP work isre ti e simp e nd m n supp iers c n do the sewin . *hus, the poo o; supp iers iseLp nded nd Q r h s re ter ; eLibi it in choosin the sewin comp nies. )urther,bec use Q r d es 50R o; the ; bric in its p nt, it is ess dependent on supp iers ndc n respond more Guick to mid-se son ch n es in customer co or pre;erences.
*hre t o;$ubstitute
roducts
"ndustr competitors on m rketed the desire o; dur b e, c ssic ines. Q r ;orces onmeetin customer pre;erences ;or trend , ow-cost ; shion. "t h s the hi hest s es persGu re ;oot o; n o; its competitors. "t does so with irtu no d ertisin nd on10R o; stock is unso d. "t keeps its in entor e e s er ow nd o;;ers new products t
n m Hin p ce ;or the industr +i.e., 15 d s ;rom ide to she es . Q r h seLtreme e;;icient m nu; cturin nd distribution oper tions.
"ndustri
Competitors
Q r o;;ers eLtreme ; shion b e ines th t re on eLpected to st ;or pproLim te
10 we rs. "t o;;ers trend , ppe in pp re t h rd-to-be t price.
Integration
-
8/9/2019 Business Stratedgy IT
44/44
Integration