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Lec 03

The document discusses strategic uses of information technology and competitive strategies. It covers topics like strategic information architecture, Porter's competitive forces, competitive strategies like cost leadership and differentiation, and using IT to lock in customers and suppliers while locking out competitors. The document also discusses building a customer-focused business through strategic focus on customer value and applying IT within the value chain.

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Ethab Ahmed
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15 views14 pages

Lec 03

The document discusses strategic uses of information technology and competitive strategies. It covers topics like strategic information architecture, Porter's competitive forces, competitive strategies like cost leadership and differentiation, and using IT to lock in customers and suppliers while locking out competitors. The document also discusses building a customer-focused business through strategic focus on customer value and applying IT within the value chain.

Uploaded by

Ethab Ahmed
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 2

Competing with
Information Technology

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Section 1

Fundamentals of Strategic Advantage

2-2
I. Strategic IT

 Technology is now the actual cause and


driver of business strategies

 Technology is no longer an afterthought in


forming business strategies

2-3
II. Competitive Strategy Concepts

 Strategic Information Architecture – the


collection of strategic information systems
that shape/support the competitive
position/strategies of a firm

2-4
II. Competitive Strategy Concepts

 Competitive Forces (Porter)


 Rivalry of Competitors
 Threat of New Entrants
 Threat of Substitutes
 Bargaining Power of Customers
 Bargaining Power of Suppliers

 Competitive Strategies
 Cost Leadership Strategy
 Differentiation Strategy
 Innovation Strategy
 Growth Strategy
 Alliance Strategy
2-5
II. Competitive Strategy Concepts

2-6
III. Strategic Uses of Information Technology

 Other Strategic Initiatives


 Locking by Building Relationships
 Lock In Customers
 Lock In Suppliers
 Lock Out Competitors

 Switching Costs – make customers/supplier


dependent on mutually beneficial inter-enterprise
information systems

 Raise Barriers to Entry – discourage or delay


other firms from entering a market

 Leverage Investment in IT – develop new


products and services that are not possible
without strong IT capabilities
2-7
II. Competitive Strategy Concepts

2-8
II. Competitive Strategy Concepts

2-9
II. Competitive Strategy Concepts

2-10
IV. Building A Customer-Focused
Business – Strategic Focus on
Customer Value

 Recognizing that Quality, not


Price, has become the primary
factor in a customer’s
perception of value

 Internet
technologies can make
customers the focal point of e-
business applications
2-11
IV. Building A Customer-Focused
Business – Strategic Focus on
Customer Value

2-12
V. The Value Chain and Strategic IS
 Value Chain – the series/chain/network of
activities that add value to
products/services
 Primary Processes – directly related to
manufacture of products or delivery of
services

2-13
V. The Value Chain and Strategic IS

Support Processes – business activities 


that that support daily operations of the
firm and indirectly contribute to
products/services

 The Value Chain Concept can help identify


where and how to apply strategic
capabilities of IT

2-14

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