Experiencing MIS 8th by m kronenke chapter 03

Chapter Strategy and Information Systems “And We’ve Got a Lot of Process and Systems Work to Do.” • Differentiates itself by having a large inventory of parts • Competitive strategy is threatened by 3D printing • Jason wants to respond by manufacturing some parts • Never been a manufacturer • Drew to explore possibilities and challenges associated with 3D printing Copyright © 2016 Pearson Education, Inc 3-2 Study Questions Q1: How does organizational strategy determine information systems structure? Q2: What five forces determine industry structure? Q3: How does analysis of industry structure determine competitive strategy? Q4: How does competitive strategy determine value chain structure? Q5: How business processes generate value? Q6: How does competitive strategy determine business processes and the structure of information systems? Q7: How information systems provide competitive advantages? Q8: 2025? Copyright © 2016 Pearson Education, Inc 3-3 Q1: How Does Organizational Strategy Determine Information Systems Structure? Strategy Determines Information Systems Copyright © 2016 Pearson Education, Inc 3-4 Q2: What Five Forces Determine Industry Structure? Competitive Forces • Competition from vendors who manufacture substitutes • Competition from new competitors • Competition from existing rivals Bargaining Power Forces • Bargaining power of suppliers • Bargaining power of customers Copyright © 2016 Pearson Education, Inc 3-5 Use 5-forces Model to Identify Sources of Strong Competition Copyright © 2016 Pearson Education, Inc 3-6 Assessing the Five Forces at AllRoad Copyright © 2016 Pearson Education, Inc 3-7 Q3: How Does Analysis of Industry Structure Determine Competitive Strategy? Porter's Four Competitive Strategies Copyright © 2016 Pearson Education, Inc 3-8 Yikes! Bikes! • You are operations manager for Yikes! Bikes, a manufacturer of high-end mountain bicycles • New owners plan to pursue lowest-cost vendor strategy by importing lowcost, lower quality bikes • New owners are not being honest with employees about cutting jobs • Say you might be promoted to new general manager Should you trust them? Q: Are the owner’s actions illegal? Unethical? Copyright © 2016 Pearson Education, Inc 3-9 Q4: How Does Competitive Strategy Determine Value Chain Structure? Linkages Copyright © 2016 Pearson Education, Inc 3-10 How Does an Actual Company Use IS to Create Competitive Advantages? (cont'd.) • Maintains customer account data – IS collects information for ABC (adds value) – IS saves customers time by automatically filling in part of form (adds value for customer) • Package & information delivery system – IS helps customer to select delivery address and generate shipping labels – What value does shipper get? Copyright © 2016 Pearson Education, Inc 3-20 Two Roles for Information Systems Regarding Products Copyright © 2016 Pearson Education, Inc 3-21 ABC Web Page to Select Recipient from Customer’s Records Copyright © 2016 Pearson Education, Inc 3-22 ABC Web Page to Select a Contact from Customer’s Records Copyright © 2016 Pearson Education, Inc 3-23 ABC Web Page to Specify Email Notification Copyright © 2016 Pearson Education, Inc 3-24 ABC Web Page to Print Shipping Label Copyright © 2016 Pearson Education, Inc 3-25 Q8: 2025? • Speed of business accelerating • New businesses based on advances in self-driving cars, drones, Google glass, 3D printing • Pace of change and integration of new technology will be fast and increasing Copyright © 2016 Pearson Education, Inc 3-26 Security Guide: Differentiating on Security • Major data centers harden their sites – Computer criminals turn to less protected assets of smaller organizations and individuals • Reputation of effective security can be way to gain a competitive advantage Copyright © 2016 Pearson Education, Inc 3-27 Guide: Your Personal Competitive Advantage • Who will be your competitors when you seek a job after graduating from college? • What will be your competitive advantage in the job market? • What can you before you graduate to develop a competitive advantage? Copyright © 2016 Pearson Education, Inc 3-28 Guide: Your Personal Competitive Advantage (cont'd) How these elements of competitive advantage apply to you personally? • Switching costs? • Differentiating products? • Creating barriers? • Establishing alliances? Reducing costs, increasing revenues? Copyright â 2016 Pearson Education, Inc 3-29 Active Review Q1: How does organizational strategy determine information systems structure? Q2: What five forces determine industry structure? Q3: How does analysis of industry structure determine competitive strategy? Q4: How does competitive strategy determine value chain structure? Q5: How business processes generate value? Q6: How does competitive strategy determine business processes and the structure of information systems? Q7: How information systems provide competitive advantages? Q8: 2025? Copyright © 2016 Pearson Education, Inc 3-30 Case Study 3: The Amazon of Innovation Copyright © 2016 Pearson Education, Inc 3-31 Case Study 1: The Amazon of Innovation (cont'd) Amazon’s business lines three categories: Online retailing – Own inventory – Associates program – Consignment Order fulfillment Cloud services Copyright © 2016 Pearson Education, Inc 3-32 Fulfillment Fees for Regular-sized Goods for a Company Like AllRoad Copyright © 2016 Pearson Education, Inc 3-33 Copyright © 2016 Pearson Education, Inc 3-34 ... Systems Work to Do.” • Differentiates itself by having a large inventory of parts • Competitive strategy is threatened by 3D printing • Jason wants to respond by manufacturing some parts • Never been... manufacturer of high-end mountain bicycles • New owners plan to pursue lowest-cost vendor strategy by importing lowcost, lower quality bikes • New owners are not being honest with employees about... Differentiates products • Locks in customers • Raises barriers to market entry • Increases profit margins by decreasing costs and decreasing errors Copyright © 2016 Pearson Education, Inc 3-19 How Does