Lecture Management information systems: Solving business problems with information technology – Chapter 10

Introduction to MIS
Chapter 10
Strategic Analysis

Copyright © 1998-2002 by Jerry Post

Introduction to MIS

1


Strategy

Connections to
suppliers and
customers.

Competition
Become the best firm in the
industry. Block the
competitors by keeping your
customers happy.

 

Introduction to MIS

 

2

Outline
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The Competitive Environment
External Agents
IS Techniques to Gain Competitive Advantage
The Search for Innovation
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

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Research
Engineering and Design

Manufacturing
Logistics and Supply
Marketing
Sales and Order Management
Service
Management

Costs and Dangers of Strategies
Operations, Tactics, Strategy
E-Commerce Failures
Cases: Travel Industry
Appendix: Solving Business Problems and Cases

Introduction to MIS

 

3


Competition

Competition is increasing in many industries, but it is
particularly intense in the restaurant and fast food industry.
Competition encourages firms to hold down costs, provide
more variety, and provide new and better service to
customers.

 

Introduction to MIS

 

4


Porter’s Five Forces Model
Threat of
New Entrants

Rivalry Among
Existing Competitors

Bargaining Power
of Suppliers

Bargaining Power
of Buyers

Threat of Substitute
Products or Services

 

Introduction to MIS

 

5

Harvard Strategy
Formulation
(Deciding what to do.)

Implementation
(Achieving results.)
1. Org. structure & relation.

1. Identification of
opportunity and risk.

Corporate Strategy

2. Material,
technical, financial, &
human resources.

Pattern of
purposes and
policies
defining the
company and
its business

3. Personal values
and aspirations.

Introduction to MIS

2. Org. processes & behavior.
Standards and measurement.
Motivation & incentive systems.
Control systems.
Recruit & develop managers.

3. Top leadership.
Strategic
Organizational
Personal

4. Noneconomic
responsibility to
society.

 

Division of work.
Coord. divided responsib.
Information systems.

 

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parts
supplier

parts
supplier

warehouse
supplier

supplier
tool
manufacturer

Manufacturer

wholesaler

wholesaler
distributor

Production
Chain

warehouse
supplier

workers

retail store

parts
supplier

distributor
retail store

distributor
retail store

retail store

Consumers

 

Introduction to MIS

 

7


Methods to Gain
Competitive
Advantage

Barrier
To Entry

Supplier

Supplier
Ties To

Suppliers

Decreased
Costs

Firm

Control Of
Distribution

Improved
Quality

Consumer

Introduction to MIS

Innovation and
Differentiation

Consumer

Consumer

Consumer

Increased
Switching Costs

Consumer

 

Rival

Wholesale

Ties To
Customers

 

Supplier

Consumer

Consumer

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Barriers to Entry
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Economies of Scale (size)
Economies of Scope (breadth)
Product Differentiation
Capital requirements
Cost Disadvantages (independent of size)
Distribution Channel Access
Government Policy

Introduction to MIS

 

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Competitive Advantage
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Barriers to Entry


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Consumers incur learning
and data transfer costs.
Baxter Healthcare

Introduction to MIS

 

Monitoring production lines
and analyzing data. Digital
Equipment Corp.

Value Chain


 

Add new features or create
new products with IT.
Federal Express & Merrill
Lynch

Quality Management
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

IS to cut costs. Wal-Mart

Product Differentiation

Prevent others from entering
the industry. Napster

Switching Costs


Lower Production Costs


Distribution Channels




Additional costs of creating
an information system.
People’s Express

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Expanding forward or back
the value chain to find
greater profits. Boeing
Information Systems

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Value Chain
Firm Infrastructure
Human Resources Management

M
ar
gi

Technology Development

n

 

Introduction to MIS

Operations

 

Outbound Marketing
Logistics & Sales

Service

M
ar
gi

Inbound

Logistics

n

Procurement

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Process Innovation
Suppliers

Production
Logistics/
Supply

Research
Engineering
and Design
Management

Manufacturing
Marketing
Customer
Service

Sales and
Order
Management
Customers

 

Introduction to MIS

 

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Developing Strategies
Corporate Strategy Development
monitor
rivals

•  expectations •  strengths
•  goals
•  weaknesses
•  rivalry
•  opportunities
•  critical success factors

Market Measures
­ Market share
­ Concentration
­ Growth
­ Profitability

Performance Measures
­ ROA

­ ROI
­ EPS
­ Growth
­ Subjective

Business Strategies
and Priorities

Process Changes
Data Needs
IS Changes

­ Cost 
leadership
­ Differentiation
­ Innovation
­ Linkages
­ Re­engineering
­ Organization
­ 
Decentralization

System
Development
& Implementation

Business Operations & Rules
Existing Data and IS

 

Introduction to MIS

 

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Search for Innovation


Research




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Analysis & modeling, project
management, work group
support, databases, decision
support.

Manufacturing


Engineering & Design


CAD/CAM, testing, networks,

work group support.



Logistics & Supply


 

Introduction to MIS

 

Mass customization, links to
customers & suppliers,
quality monitoring, expert
systems for maintenance,
production databases,
business integration.
Just-in-time linkages,
forecasts, models, links for
design, transaction
processing.

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Search for Innovation


Marketing
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Frequent buyer database,
target market & media
analysis, survey design and
analysis, multimedia
promotion design, links to
customers and designers.

Service




Management


Sales & Orders


Portable computers for
sales, ES for order
customization, work group
tools for customer support.

Phone support, GIS locators,
scheduling, ES diagnostics,
databases.



EIS, e-mail, bulletin boards,
decision support systems,
personal productivity tools,
work group support
Links to service providers
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Introduction to MIS

 

Accountants
Consultants
Lawyers, . . .

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Research
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Analysis and models
Statistical analysis of data
Project management and budgeting
Work-group collaboration and communication

Introduction to MIS

 

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Engineering and Design
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CAD/CAM
Integrated design database
Production databases and model testing

Expert Systems for manufacturability
Work group communication

Introduction to MIS

 

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Manufacturing
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Links to customers
Links to suppliers
Mass customization
Robotics
Diagnostic Expert Systems
Quality monitoring and control

Introduction to MIS

 

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Logistics and Supply
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Just-In-Time Inventory and EDI
Configuration and design
Searching for availability, pricing, . . . networks

Introduction to MIS

 

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Marketing
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Frequent buyer databases
Point-of-Sale and trends
Statistical analysis of data
Geographic Information Systems
Links to external marketing agencies
Multimedia development of promotions
Internet

Introduction to MIS

 

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Sales and Orders
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Sales force automation, hand-held computers
Customer Internet access
Expert Systems for product and option selection

Expert Systems for configuration and shipping
Front-line support: ES, e-mail, work groups

Introduction to MIS

 

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Service
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Portable computers for service anywhere
Databases (e.g., customer service)
Location monitoring of service personnel
Product internal, automatic diagnostics
Expert System diagnostic tools

Introduction to MIS

 

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Management
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Executive Information Systems
Simulation (and rivalry games)
Links to external partners (accounting, law, . . .)
Electronic conferencing
Work group communication, e-mail
Standardization, Modularization, Franchises
Knowledge Workers
Client-server instead of hierarchical computing

Introduction to MIS

 

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Strategy Analysis
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Product Differentiation


Skills & Resources
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Strong marketing.
Product engineering.
Basic research.
Distribution channel
cooperation.

Skills & Resources
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Internal coordination.
Incentives for innovation.
Resources to attract skills.

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Risks
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Cost Leadership

Organization Requirements
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Competitors imitate.
Customers do not accept.
Cost is too high.

Introduction to MIS

 

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

Continued capital
investment.
Process engineering.
Continuous quality
improvement.
Tight supervision of costs.
Products designed for low
cost.
Low cost distribution.

Organization Requirements
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Tight cost controls.
Frequent control reports.
Highly structured org.
Incentives based on
qualitative measures.

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Strategy Analysis
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Cost Leadership


Risks
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Customer-Supplier Links


Competitors imitate.
Technology changes.
Lose production or
distribution advantage.

Skills & Resources
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

Organization Requirements
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Introduction to MIS

 

Flexibility to respond to
customers.
Service culture.
Ability to adapt to
emergencies.

Risks


 

Influence with partners
Communication channels
Standards or agreements.

Security threats.
Changing standards.
Competitors copy with
more/better links.

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