Management Information SystemsManagement Information Systems

Organizational Strategy, Information Systems, and Competitive Advantage

Chapter 3

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This Could Happen to You

Marketing Director needs to write memo to her bossExplain how blog would provide a competitive

advantage

Will be used to justify expense to his manager

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Study Questions

Q1. How does organizational strategy determine information systems structure?

Q2. What five forces determine industry structure?

Q3. What is competitive strategy?

Q4. What is a value chain?

Q5. How do value chains determine business processes?

Q6. How do information systems provide competitive advantages?

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Q1. Organizational Strategy

Determines organization’s goal and objectives

Developed from organizational structure

Creates the value chain for organization

Establishes the structure, features, and functions of information systems

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組織策略決定了資訊系統

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Q2. What Five Forces Determine Industry Structure?

Porter’s five competitive forces:Bargaining power of customers

Threat of substitution

Bargaining power of suppliers

Threat of new entrants

Rivalry among existing firms

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Porter’s Five Forces

Figure 3-2

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Example of Five Forces

Figure 3-3

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Q3. What Is Competitive Strategy?

Organization’s response to structure of its industry

Porter identified four competitive strategies:Cost leadership across industry

Cost leadership focused on particular industry segment

Differentiation across industry

Differentiation focused on particular industry segment

Porter says goals, objectives, culture, and activities must be consistent with strategy

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波特的四個競爭策略

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Q5. What is a Value Chain?

Network of value-creating activities

Primary activities

Support activities

Linkages

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Generic Value Chain Model

Figure 3-5

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Primary Activities

Five activitiesInbound logistics

Operations

Outbound logistics

Marketing and sales

Service

Stages accumulate costs and add value to productNet result is total margin of chain

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價值鏈裡的主要活動

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Support Activities

Four activitiesFirm infrastructure

Human resources

Technological development

Procurement

Contribute indirectly to production, sale, and service

Add value and costsProduce margin that is difficult to calculate

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Linkages

Interactions across value activities

Sources of efficiencies

Readily supported by information systems

Reduce inventory costs

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Q5. Business Processes

Network of activities, resources, facilities, and information

Accomplish a business function

Implement value chains or portions of value chains

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價值鏈如何決定企業流程及資訊系統？

企業流程就是把整個或部分價值鏈具體實作出來的方法所以每個價值鏈裡都會有一或多個企業流程

「最低價」的店家會以最少、最基本的流程來支援它的價值鏈；「高品質」的店家會以較費工夫的企業流程（加以資訊系統的支援）來處理，好讓公司的服務和另一家店差異化

但就如波特所說，這些流程及系統一定要能附加足夠的價值來超過所需的成本不然的話，公司的利潤會是負值

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自行車出租店的部分作業價值鏈

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Business Process Design

Porter’s idea Create integrated, cross-departmental business

systems

Do not automate or improve existing systems

Instead, create new processes Integrate activities of all departments

Across entire value chain

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Organizational Strategy Determines Information Systems

Figure 3-1

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競爭優勢準則一覽表

Q6 資訊系統如何給公司帶來競爭優勢？

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Competitive Advantage via Products

Organizations gain a competitive advantage by:Creating new products or services

Enhancing existing products or services

Differentiating their products or services

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資訊系統在產品上的兩個職分

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Competitive Advantage via Business Processes (1)

Organizations can gain a competitive advantage by implementing business systemsLocking in customers

High switching costs

Locking in suppliers Making it easy to connect to and work with organization

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Competitive Advantage via Business Processes (2)

Create entry barriers Making it expensive for new competition to enter market

Establish alliances Establish standards

Promote product awareness

Reducing costs Increased profitability

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ABC’s Information System

Uses information systems to maintain customer account dataCollects information for ABC

Saves customers time by automatically filling in part of form

Package and information delivery systemCustomer can select delivery address and generate

shipping labels

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從客戶紀錄裡點選收件人的 ABC公司網頁

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從客戶紀錄裡點選聯絡人的 ABC公司網頁

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設定電子郵件通知的 ABC公司網頁

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列印運輸標籤的 ABC公司網頁

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ABC’s Information System Created a Competitive Advantage

Information systems create advantage by:Enhancing existing products

Differentiating products

Locking in customers

Raising barriers to entry

Delivering net savings

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Ethics Guide (1)

Searching the Internet is a matter of knowledge and access

Digital divide between those who have access and those who don’tDivide continues to deepen

Internet access available at public places Not everyone served

Not as convenient

Advantages accrue to those with access

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Ethics Guide (2)

Intellectual capital resides on Internet

Savings for businesses Product support

Warehousing

Mailings

Digital divide segregates haves and have-nots

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Ethics Guide (3)

Do organizations have a responsibility to address this matter?

If most have access, do we have to supply the few without printed materials?

Is it the government’s responsibility to supply Internet service?

How can any economy compete with an Internet-based economy in the global arena?

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Applying Knowledge of Industry Structure (1)

Knowledge of industry structure gives background and perspective

Makes it easier to talk with management

Enables Dee to:Understand the organization’s competitive advantage

Translate strategy into her project

Build a better blog

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Applying Knowledge of Industry Structure (2)

Dee’s memo should incorporate:List of competitive advantage factors

Help sales team differentiate themselves

Lock in customers

Raise barriers to market entry