Chapter Strategy and Information Systems “We Can't Be Everything to Everybody.” • Known for providing security monitoring • Current focus on security contracts • Mateo wants to focus on law enforcement agencies, search & rescue, federal government • Good money in agricultural surveying, industrial inspection, real estate videos, and wedding videos too Copyright © 2017 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: 2026? Copyright © 2017 Pearson Education, Inc 3-3 Q1: How Does Organizational Strategy Determine Information Systems Structure? Strategy Determines Information Systems Copyright © 2017 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 © 2017 Pearson Education, Inc 3-5 Use 5-forces Model to Identify Sources of Strong Competition Copyright © 2017 Pearson Education, Inc 3-6 Assessing the Five Forces at Falcon Security Copyright © 2017 Pearson Education, Inc 3-7 Q3: How Does Analysis of Industry Structure Determine Competitive Strategy? Porter's Four Generic Competitive Strategies Copyright © 2017 Pearson Education, Inc 3-8 Yikes! Bikes! • Yikes! Bikes, a manufacturer of high-end mountain bicycles • You are operations manager • New owners plan to pursue lowest-cost vendor strategy by importing low-cost, low 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 © 2017 Pearson Education, Inc 3-9 Q4: How Does Competitive Strategy Determine Value Chain Structure? Linkages Copyright © 2017 Pearson Education, Inc 3-10 Web Page to Select a Contact from the Customer’s Records Copyright © 2017 Pearson Education, Inc 3-23 ABC Web Page to Select a Contact from Customer’s Records Copyright © 2017 Pearson Education, Inc 3-24 Web Page to Specify Email Notification Copyright © 2017 Pearson Education, Inc 3-25 Web Page to Print Shipping Label Copyright © 2017 Pearson Education, Inc 3-26 Q8: 2026? • Pace of change and integration of new technology fast and increasing • Augmented reality devices, like Google Glass and Microsoft's HoloLens, will change competitive landscape • New businesses based on advances in self-driving cars, drones, 3D printing • New products constructed in someone’s garage • Take advantage of opportunities new products create Copyright © 2017 Pearson Education, Inc 3-27 Security Guide: Hacking Smart Things • Internet of Things (IoT) ‒ Internet-enabled devices ‒ Outfitting every object with Internet access hazardous, even dangerous, proposition • Unintended risks associated with incorporating this capability into things Copyright © 2017 Pearson Education, Inc 3-28 Internet of Threats • What about securing data stored on Internet-enabled smart devices? – How to protect 10, 20, or 30 different Internet-enabled devices in your home? – Could hacker hijack webcam in your living room or, actually hijack your car? – What businesses and government agencies could benefit? Copyright © 2017 Pearson Education, Inc 3-29 Internet of Threats (cont’d) • What some benefits or risks for businesses adopting new Internet-enabled devices? • How about supply chain, customer service What else? Copyright © 2017 Pearson Education, Inc 3-30 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? • Your knowledge of IS, might facilitate cost savings that more than compensate for your salary Copyright © 2017 Pearson Education, Inc 3-31 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 © 2017 Pearson Education, Inc 3-32 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: 2026? Copyright © 2017 Pearson Education, Inc 3-33 Case Study 3: The Amazon of Innovation Copyright © 2017 Pearson Education, Inc 3-34 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 3-35 Copyright © 2017 Pearson Education, Inc Copyright © 2015 Pearson Education, Inc Fulfillment Fees for Regular-sized Goods for a Company Like Falcon Security Copyright © 2017 Pearson Education, Inc 3-36 Copyright © 2017 Pearson Education, Inc ... 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... Information Systems Copyright © 2017 Pearson Education, Inc 3-4 Q2: What Five Forces Determine Industry Structure? Competitive Forces • Competition from vendors who manufacture substitutes • Competition... 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