i.s chapter 2 part 1

8/13/2019 i.s Chapter 2 Part 1

1/14

Manal A. Abdel-Fattah, PhD

Faculty of Commerce & Business Administration


2/14

Chapte

r

2

2 2012 by Dr. Manal A. Abdel-Fattah


3/14

Chapte

r

2


1.

Identify basic competitive strategies anddiscuss Porters classic model of competition.

2. Discuss the value chain and strategic IS

3. Give examples of how IT give competitiveadvantages to a business.

4. Give examples of how business processreengineering frequently involves the strategicuse of IT.

5. Identify the business value of using Internettechnologies to become an agile competitor orto form a virtual company.

6. Explain how knowledge management systemscan help a business gain strategic advantages.


4/14

4

Chapte

r

2

2012 by Dr. Manal A. Abdel-Fattah

Technology is no longer an afterthought in

forming business strategy, but the actual cause

and driver.

IT can change the way businesses compete. Although competition can require significant

resources, it is a positive characteristic in

business that is natural and healthy.


5/14

5

Chapte

r

2


The strategic role of IS means using IT to

develop products, services and capabilities that

give a company major advantages over the

competitive forces it faces in the global

marketplace.

A strategic information system is

Any kind of information system (MIS, DSS, etc)

That uses IT to help an organization Gain a competitive advantage.

Reduce a competitive disadvantage.

Or meet other strategic enterprise objectives.


6/14

6

Chapte

r

2



7/147

Chapte

r

2


In Porters classic model of competition, ifa

business wants to succeed must develop and

implement strategies to counter these 5 forces:

1. Rivalry of competitors within its industry.2. Threat of new entrants into an industry and its

markets.

3. Threat posed by substitute products which might

capture market share.

4. Bargaining power of customers.

5. Bargaining power of suppliers.


8/148

Chapte

r

2



9/14

Chapte

r

2



10/1410

Chapte

r

2


1. Cost Leadership Become low-cost producers Help suppliers or customers reduce costs Increase cost to competitors

2. Differentiation Strategy Develop ways to differentiate a firms products from

its competitors Can focus on particular segment of market

3. Alliance Strategy Establish linkages and alliances with Customers, suppliers, competitors, consultants and other

companies (reduced inventory cost and increased sales)

Online one-stop shopping with partners


11/14

Chapte

r

2


4. Innovation Strategy Find new ways of doing business Unique products or services.

Or unique markets.

Radical changes to business processes for producing ordistributing products and services.

Example, Amazon uses online full-service customersystems

5. Growth Strategy

Expand companys capacity to produce Expand into global markets

Diversify into new products or services


12/14

Chapte

r

2


The strategies are not mutually exclusiveOrganizations use one, some or all

Porters Four Competitive Strategies

12 C


13/14

Chapte

r

2


Lock in customers and suppliers By building valuable relationships with them

prevent them from switching to competitors

Build in switching costs

Make customers and suppliers dependent on the useof innovative IS

Barriers to entry Discourage or delay other companies from entering

market Increase the technology or investment needed to

enter

13


14/14

i.s chapter 2 part 1

Documents