Competitive Advantage with Information Technology

1. Topic 2 Competitive Advantage with Information Technology Text Materials Chapter 2 – Major Business Initiatives

2. Achieving Competitive Advantage with IT • Off-line (store) Retail • Online Retail • Automotive • Online music • Music players • Web search • Personal computers • Software Competitive Advantage

3. Hello!? 2008 DJI MSFT 1990 DJI $5000 MSFT $5000 Market Capitalization, February 2007

4. Hello!?

5. Competitiveness How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services.

6. Competitiveness Our Philosophy PFSweb is an outsourcing solutions design firm with an extensive offering of world-class logistics, fulfillment, customer care and technology infrastructure that can be leveraged to create unique, client-specific business solutions. Our philosophy is not to fit your business model into our pre-existing infrastructure, but rather to develop our infrastructure around your unique needs. We are flexible, scalable, and adaptable so we can keep pace with your ever-changing needs, whether you are adding new sales channels, marketing initiatives, vendor managed inventory (VMI) programs or special projects. We realize that no two clients face the exact same challenges, and for that reason, we are always extending our technology and operations capabilities based directly on client needs. Our philosophy is that there is absolutely no favorable argument for you to consider outsourcing with PFSweb unless we can execute at a greater performance level than what you could achieve in-house or through an alternative partner.

7. Competitiveness

8. Outputs Productiv ity = Inputs Productivity Measures how well an organization is utilizing its resources.

9. Porter’s Competitive Advantage Model New Entrants Buyer Power Supplier Power Rivalry Among Competitors Suppliers Customers Substitutes

10. Porter’s Competitive Advantage Model • Impact of Internet on Competitive Forces • Reduces barriers to entry • Enables new substitute products and services • Shifts bargaining power to customer • Raises firm’s bargaining power over suppliers • Suppliers benefit from reduced barriers to entry and from elimination of intermediaries • Widens geographic market, increases number of competitors, reduces differentiation among competitors

11. Porter’s Competitive Advantage Model New Entrants Buyer Power Supplier Power Rivalry Among Competitors Suppliers Customers Substitutes

12. Porter’s Competitive Advantage Model Buyer Power Rivalry Among Competitors Customers

13. Porter’s Competitive Advantage Model New Entrants Rivalry Among Competitors

14. Porter’s Competitive Advantage Model Rivalry Among Competitors Substitutes

15. Porter’s Competitive Advantage Model Supplier Power Rivalry Among Competitors Suppliers

16. Porter’s Competitive Advantage Model

17. IT Systems can help in the areas of . . . • Low-cost leadership • Product differentiation • Customer and supplier intimacy • Focus on market niches • Increase your market reach

18. The Value Chain Model

19. Basic Value Chain for Federal Express Human Resources Build and Improve Distribution Centers Support Aircraft and Trucks Order Supplies Support Activities Service Customers Bill & Collect Collect Packages Sort Packages Ship Packages Core Activities (Hub)