Experiencing MIS 8th by m kronenke chapter 03
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Chapter 3
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.
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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 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?
Q8: 2025?
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Q1: How Does Organizational Strategy Determine
Information Systems Structure?
Strategy Determines Information Systems
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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.
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Use 5-forces Model to Identify Sources of
Strong Competition
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Assessing
the Five
Forces at
AllRoad
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Q3: How Does Analysis of Industry Structure
Determine Competitive Strategy?
Porter's Four
Competitive
Strategies
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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?
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Q4: How Does Competitive Strategy Determine
Value Chain Structure?
Linkages
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Task Descriptions for Primary Activities of the
Value Chain
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Q5: How Do Business Processes Generate Value?
Activities
interact
with
databases
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Improved Material Ordering Process Using
Integrated Databases.
Queries
both
databases
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Q6: How Does Competitive Strategy Determine Business
Processes and the Structure of Information Systems?
Low-Cost Rental Value Chain
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High-Service Rental Value Chain
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Business Process and Information Systems for
High-Service Bike Rental
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So What? What Strategy Do You Support?
1. Never propose an idea to anyone in your company that
is not consistent with its competitive strategy.
2. Information systems development must mirror
organization’s strategy.
What about you, personally?
• If you naturally like to save costs, a cost leader can
be the place for you.
• Know organization’s competitive strategy.
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Q7: How Do Information Systems Provide
Competitive Advantages?
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How Does This System Create a Competitive
Advantage?
• Enhances existing products
• Differentiates products
• Locks in customers
• Raises barriers to market entry
• Increases profit margins by decreasing costs
and decreasing errors
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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?
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Two Roles for Information Systems Regarding
Products
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ABC Web Page to Select Recipient from
Customer’s Records
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ABC Web Page to Select a Contact from
Customer’s Records
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ABC Web Page to Specify Email Notification
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ABC Web Page to Print Shipping Label
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