microsoft power point - lecture 2-uoa

8/8/2019 Microsoft Power Point - Lecture 2-UoA

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What is Strategy?

s Operational Effectiveness meansperforming similar activities better thanrivals do

s Strategic Positioning meansperforming different activities from rivalsor performing similar activities in different ways

s Organizations have competitiveadvantage when they provide morevalue to their customers or when theyprovide the same value to customers ata lower price

Source: Porter, M.E. HBR November-December 1996


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The Essence of Strategy

The essence of strategy ischoosing to perform activitiesdifferently than rivals do

Source: Porter, M.E. HBR November-December 1996


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s

Strategy concerns both organization andenvironmentx A basic premise of thinking about strategy

concerns the inseparability of organization andenvironmentthe organization uses strategy to deal

with changing environmentss The substance of strategy is complex

x Because change brings novel combinations ofcircumstances to the organization, the substance ofstrategy remains unstructured, un-programmed, non-

routine, and non-repetitives Strategy affects overall welfare of the

organizationx Strategic decisions are considered important

enough to affect the overall welfare of theorganization

Areas of Agreement onStrategy (Chaffee, 1985)


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Areas of Agreement onStrategy (Chaffee, 1985) (2)

s Strategy involves issues of both content andprocess

x The study of strategy includes both the actionstaken, or the content of strategy, and the processesby which actions are decided and implemented

s Strategies are not purely deliberatex Theorists... Agree that intended, emergent, andrealized strategies may differ from one another

s Strategies exist on different levelsx Firms havecorporate strategy (What business

shall we be in?) and business strategy (how shall we

compete in each business?)s Strategy involves thought processes

x Strategy involves conceptual as well as analyticalexercises. Some stress the analytical dimensionmore than others, but most affirm that the heart of

strategy making is the conceptual work done byleaders of the organization


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Different Kinds of Information Systems

Operational Level Operational Managers

Knowledge LevelKnowledge andData Workers

Management Level Middle Managers

Strategic Level Senior Managers

Sales &Marketing Manufacturing Finance Accounting

HumanResources

INFORMATION SYSTEM GROUPS SERVED


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Six Major Types of ISStrategic-Level SystemsExecutiveSupportSystems

5-year sales trend

forecasting

5-year operating plan 5-year budget

forecasting

Management-Level SystemsDecisionSupportSystems

Sales region analysis Production scheduling Cost analysis Pricing/profitability

analysis

ManagementInformationSystems

Sales management Inventory control Annual budgeting Capital investment

analysis

Knowledge-Level SystemsKnowledgeWork Systems

Engineering

workstations

Graphics workstations Managerial

workstations

OfficeAutomationSystems

Work processing

systems

I

mage storage Electronic calendars

Operational Level SystemsTransactionProcessingSystems

Order processing Plant scheduling Payroll Employee record

keeping

Sales and Marketing

Manufacturing Finance Accounting Human Resources


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Systems IntegrationE S S

T P SK W S

&O A S

D S SM IS

Systems Integration is

performed at 3 levels: Business

Application

Technology


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Systems Integration(2)

BusinessArchitecture

TechnologyArchitecture

ApplicationArchitecture

BusinessArchitecture

ApplicationArchitecture

TechnologyArchitecture

Organizational Unit Organizational Unit

Inter-Organizational Processes

EnterpriseApplication Integration

MiddlewareIntegration

*

**

* semantic level

** syntactical level


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Strategic InformationSystems

A Strategic Information System can be any IS at any level of an organization that change the goals, processes,products, services, or environmental relationships to help the organization gain a competitive advantage

1950-1960

Necessary evil,bureaucracy

1960-1970

General purposesupport, MIS reporting

1970-1980

Customizedmanagement control

1985-Today

strategic resource,business foundation


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Strategy Levels and IT

Strategies Models IT TechniquesIndustry Cooperation Vs Competition

LicensingStandards

Competitive Forces ModelNetwork economics

Electronic TransactionsCommunication NetworksInterorganizational Systems

Information Partnerships

Firm SynergyCore Competencies

Core Competency Knowledge SystemsOrganization-wide Systems

Business Low CostDifferentiationScope

Value Chain Analysis DataminingIT-based Products/ServicesInterorganizational SystemsSupply Chain ManagementEfficient Customer Response


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Business Level Strategy andthe Value-Chain Model

Administration and ManagementScheduling and Messaging Systems

Human ResourcesWork Force Planning Systems

TechnologyComputer Aided Design Systems

ProcurementComputerized Ordering Systems

SUPPORTACTIVITIES

InboundLogistics

Automated Warehousing Systems

Operations

Computer- Contolled Machining Systems

OutboundLogistics

Automated Shipment Scheduling Systems

Sales andMarketing

Computerized Ordering Systems

Service

Equipment Maintenance Systems

PRIMARYACTIVITIES M a r g i n

M a r g i n


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Firm-Level Strategy and IT

s Synergies - IT is used to tietogether the operations ofdisparate business units so that

they can act as a wholes Core Competencies - IT is used

to encourage the sharing of

knowledge across business units


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Industry-Level Strategy and IT

The Firm TraditionalCompetitors

New MarketEntrants

Suppliers

SubstituteProducts and

Services

Customers

Threat of new entrantsThreat of substitutes

Bargaining power of suppliers Bargaining power of customers

Brand Identity

Switching Costs Capital Requirements

Access to distribution

Government Policy

Input Differentiation

Supplier Concentration

Importance of Volumeto Supplier

Forward Integration

Impact of Inputs onCost or Differentiation

Buyer Information

Buyer Volume

Switching Costs

Backward Integration

Product Difference

Relative Price Performanceof Substitutes

Switching Costs

Buyer Propensity toSubstitute

Intensity of Rivalry

Competitive Advantage can be achieved by enhancingthe firms ability to deal with customers, suppliers,substitute products and services, and new entrants to its

market, which in turn may change the balance of powerbetween a firm and other competitors in the industry in thefirms favor


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Strategic Transitions

s Internal Restructurings Blurring of Organizational Boundariess Redesign of a Firms Operating

Proceduress Change is constant

SIS are rarely planned -they evolve!SIS are rarely planned -they evolve!Like most new products, they come from

closely observing real-world situations


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Strategic Thinking as Seeing(Mintzberg)

Ahead Through

Beside

Beyond

Above

B e h i n d


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And remember...

The competitive value of individual activities

should not be separated from the whole

microsoft power point - lecture 2-uoa

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