Desko case analysis
University Of New Brunswick
Information Technology & E-Business MBA 6106
Case Study report
On
Value Chain and IT Transformation at Desko
Submitted By
Sharath Chandra Maddur
Instructor
Dr. Rebecca Angeles
Winter 2013
April 18, 2013
1
a) Business Strategy and IT Strategy: Recommend an improved or new business strategy and its supporting IT strategy to Desko
Business Strategy:
A Business strategy is a plan articulating where a business seeks to go and how it expects to get there. It is the means by which the business communicates its goals [1]. Desko’s business strategy, at the moment, seems to be impaired by a lack of proper understanding of current market scenario and an unpreparedness of the firm in dealing with the frequently changing dynamics of the industry. It is important to analyze the firm’s current strategy to find shortcomings and fix them.
Porter’s Five Forces model can be used to analyze the current standing of the firm in terms of competitive position. The Five Forces model lists five forces that are crucial in determining a firm’s competitive position [2]. Those being:
1. Supplier Power: This force is determined by the degree of the choice a firm has in supplier pool. Higher the degree, better the freedom and power the firm has over the supplier. Desko has a huge pool comprised of 190 suppliers indicating the freedom of choice the firm has in switching to a different supplier in the event of hike in prices by a supplier. This means that
Desko has significant power in this aspect.
2. Buyer Power: This force refers to the power of customers over the firm in driving the prices down. With two of the three customer segments of Desko constantly requesting the prices to be lowered, the buyers have more power over the firm. The effects of this power are so intense that
Desko preferred to manufacturing low priced products rather than focusing on trendy furniture.
3. Competitive Rivalry: Despite 98% of the firms in the
Information Technology & E-Business MBA 6106
Case Study report
On
Value Chain and IT Transformation at Desko
Submitted By
Sharath Chandra Maddur
Instructor
Dr. Rebecca Angeles
Winter 2013
April 18, 2013
1
a) Business Strategy and IT Strategy: Recommend an improved or new business strategy and its supporting IT strategy to Desko
Business Strategy:
A Business strategy is a plan articulating where a business seeks to go and how it expects to get there. It is the means by which the business communicates its goals [1]. Desko’s business strategy, at the moment, seems to be impaired by a lack of proper understanding of current market scenario and an unpreparedness of the firm in dealing with the frequently changing dynamics of the industry. It is important to analyze the firm’s current strategy to find shortcomings and fix them.
Porter’s Five Forces model can be used to analyze the current standing of the firm in terms of competitive position. The Five Forces model lists five forces that are crucial in determining a firm’s competitive position [2]. Those being:
1. Supplier Power: This force is determined by the degree of the choice a firm has in supplier pool. Higher the degree, better the freedom and power the firm has over the supplier. Desko has a huge pool comprised of 190 suppliers indicating the freedom of choice the firm has in switching to a different supplier in the event of hike in prices by a supplier. This means that
Desko has significant power in this aspect.
2. Buyer Power: This force refers to the power of customers over the firm in driving the prices down. With two of the three customer segments of Desko constantly requesting the prices to be lowered, the buyers have more power over the firm. The effects of this power are so intense that
Desko preferred to manufacturing low priced products rather than focusing on trendy furniture.
3. Competitive Rivalry: Despite 98% of the firms in the
References: [1] Pearlson, K. & Saunders, C. (2010). Managing and Using Information Systems A Strategic Approach (4th ed.). Hoboken, NJ: John Wiley & Sons, Inc. [2] http://www.quickmba.com/strategy/porter.shtml [3] Michael E. Porter, Competitive Advantage (New York: Free Press, 1985). [4] http://www.oakleigh.co.uk/page/121/Services/Technology/Articles/IT-strategy-definitionand-review [5] http://hbr.org/2005/10/information-technology-and-the-board-of-directors/ar/1 [6] M. Porter, Competitive Advantage (New York: Free Press, 1985). [7] http://www.erpsoftware360.com/erp-software.htm [8] http://cad-software-review.toptenreviews.com/ 22