Achieving Competitive Advantage with Information System

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Chapter 3

Achieving Competitive Advantage with Information Systems

3.1

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems STUDENT LEARNING OBJECTIVES

• How does Porter’s competitive forces model help companies develop competitive strategies using information systems? • How do the value chain and value web models help businesses identify opportunities for strategic information system applications? • How do information systems help businesses use synergies, core competencies, and networkbased strategies to achieve competitive advantage? 3.2

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems STUDENT LEARNING OBJECTIVES (Continued)

• How do competing on a global scale and promoting quality enhance competitive advantage? • Evaluate the role of business process reengineering (BPR) in enhancing competitiveness.

3.3

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Apple’s iTunes: Music’s New Gatekeeper

• Problem: Taking advantage of opportunities from new and disruptive technology, staying ahead of traditional competitors. • Solutions: Launched iPod and set up iTunes Music Store to create a marketplace for portable, downloadable music. 3.4

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Apple’s iTunes: Music’s New Gatekeeper

• Partnerships with artists and recording labels allow iTunes to supply exclusive content in return for driving sales and increasing groups’ popularity. • Illustrates digital technology’s role in gaining and maintaining a competitive advantage.

3.5

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Apple’s iTunes: Music’s New Gatekeeper

3.6

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Using Information Systems to Achieve Competitive Advantage

Porter’s Competitive Forces Model • Way to understand competitive advantage • Five competitive forces shape fate of firm 1. Traditional competitors • Competitors in market space continuously devise new products, new efficiencies, switching costs Some industries have low barriers to entry • • • 3.7

2. New market entrants
• E.g. food industry vs. microchip industry Newer equipment, younger workforce, etc.

Newer companies may have advantages

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Using Information Systems to Achieve Competitive Advantage

Porter’s Competitive Forces Model 3. Substitute products and services • • Substitutes customers can purchase if your prices too high E.g. Internet music service vs. CDs

4. Customers
• • Can customers easily switch to competitor’s products? Can customers force firm and competitors to compete on price alone (transparent marketplace)

5. Suppliers

3.8

The more suppliers a firm has, the greater control it can exercise over suppliers

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Using Information Systems to Achieve Competitive Advantage

Porter’s Competitive Forces Model

In Porter’s competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four forces in the industry’s environment: new market entrants, substitute products, customers, and suppliers.

Figure 3-1

3.9

Essentials of Business Information Systems
Chapter 3 Achieving Competitive Advantage with Information Systems Using Information Systems to Achieve Competitive Advantage

Information System Strategies for Dealing with Competitive Forces • Basic strategy: Align IT with business...
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