IS3100-CH02-IS-my-slides.pptxJust to wake you up….
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"When I meet new people, I immediately start talking about global warming. It's a real ice breaker.“
"I flirted with disaster last night. Now disaster won't stop texting me.“
"Don't you hate it when someone answers their own questions? I do.“
"I cooked dinner for my family last night and it was going to be a surprise, but the fire trucks ruined it."
"I just heard the man who invented autocorrect just died. May he restaurant in peace.“
From https://bestlifeonline.com/ice-breakers/
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Chapter 2 Strategy and Information Systems
Lecture notes
IS - 3100
Outline
Questions of the Chapter
Premise of the Chapter
Definitions
Information Systems and
Activities
Takeaways
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Questions of the Chapter
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 do business processes generate value?
Q6: How does competitive strategy determine business processes and the structure of information systems?
Q7: How do information systems provide competitive advantages?
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Premise of the Chapter
Information systems aim to help business organizations achieve strategic goals.
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What is strategy?
A roadmap to achieve a goal or a set of goals.
But….before strategy
…business must espouse a mission and a vision.
What is the mission of business organizations?
Create value to their customers (products/services)
Activity – (10 mins.)
What is your professional mission?
Please think about your aspirations and write your professional mission statement.
Example -- "To serve as a leader by encouraging innovation and forward-thinking so that my employees can create technology that will improve the lives of those in developing countries.“
From https://blog.hubspot.com/marketing/personal-mission-statement#:~:text=get%20you%20started.-,1.,2.
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What is a business vision?
It is the aspiration of a business organization.
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Exercise (10 mins)
What is your professional vision?
Please write your professional vision statement at least three sentences.
Example -- "Empower every person and every organization on the planet to achieve more.”
From https://www.lifehack.org/articles/work/20-sample-vision-statement-for-the-new-startup.html
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Definitions
Value: amount of money a customer is willing to pay for a product or service.
Margin: the difference between the value of a product/service and its cost.
Value chain: network of value-creating activities
Operation: workflow to achieve vision
Business process: a set of activities that transform inputs into a product/service
Value proposition
Answer the questions:
Who is the customer?
What does the customer need?
What price is the customer willing to pay?
Activity (5 mins.)
Please use your favorite search engine to answer the following questions: Who is the ideal customer for Apple? Is it the same for the whole smartphone industry?
Please make a list of descriptors for the customer.
Factors to consider for strategy
Industry structure
Organization’s positioning
Industry is influenced by:
Power of customer (different outlets/price comparison)
Product substitution (think cell phones/services)
Power of suppliers (think China making iPhones), and
New entrants to the market/industry
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How to examine industry:
Cost
Service (How does my organization support its product?)
Placement (Where does my product/service fit? Whole industry or segment of industry?)
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How Does Organizational Strategy Determine Information Systems Structure?
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Figure 3-1 summarizes a planning process used by many organizations.
Start with Porter's Five Forces to analyze industry structure.
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Porter’s Five Forces Model
Five important forces that determine competitive power:
Supplier Power
Buyer Power
Competitive Rivalry
Threat of Substitution
Threat of New Entry
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Exercise
Please use your browser to search information about Cell Phone industry.
Please share your observations about:
Industry structure
Differentiation among companies
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Five Force Model - Activity
Please break into small groups 4 or 5
You are managers/engineers at small cell phone company
You made a product that can compete against iPhone
Please complete the following:
Analyze the nature of competition in the market for smart phones using Porter’s Five Forces Model.
Prepare strategies that could be used to compete successfully against Apple. (A list of action items)
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What Five Forces Determine Industry Structure?
Competitive Forces
• Competition from vendors of substitutes.
• Competition from new competitors.
• Competition from existing rivals.
Bargaining Power Forces
• Bargaining power of suppliers.
• Bargaining power of customers.
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Competitive Strategy
Cost
Differentiation
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Q3 – How does analysis of industry structure determine competitive strategy?
Fig 3-4 Porter’s Four Competitive Strategies
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Activity
We will look at WD posts
Staying competitive
Organizations examine their respective industries and plan accordingly to compete and win.
Examining an industry includes:
Structure,
Value chains, and
Business processes.
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Understanding terms
Primary activities examples: Acquire parts, make product, package and ship, etc.
Secondary activities examples: Investigate new product designs, manage suppliers, etc.
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What is a business process?
It is a set of actions that generate value from inputs to outputs.
Example: Selling a product includes a selling pitch, customer order, shipping order, and receiving payment.
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IS and competitive advantage
Competitive advantage via products (think iPhones).
Competitive advantage via business processes (think Amazon).
How does an actual company use IS to create competitive advantages? (think Google)
How does this system create a competitive advantage? Automation and efficiency.
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Exercise: What is your competitive advantage?
On a piece of paper, please write down your major;
Write down your ideal job;
Please use the SWOT table below
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| Internal | Strengths - - - | Weaknesses - - - |
| External | Opportunities - - - | Threats - - - |
Takeaways
Information systems help organizations.
Seek ways to use automation to help your organization.
Computer technology changes quickly, stay on the top and adapt.
Think about value chains.
Understand your industry and plan your strategy accordingly.
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