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Information Systems for Strategic Advantage. BUS 782. Strategic Information System. Information systems that provide a firm with competitive products and services which give it a strategic advantage over its competitors in the marketplace.

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strategic information system
Strategic Information System
  • Information systems that provide a firm with competitive products and services which give it a strategic advantage over its competitors in the marketplace.
    • Information systems that promote business innovation, improve operational efficiency.
strategic advantage and strategic necessity
Strategic Advantage and Strategic Necessity
  • Strategic advantage refers to obtaining a sustainable competitive edge over competitors. The ability to obtain a greater than normal return on investment.
  • A strategic necessity is a system that must be installed to remain competitive and stay in business.
auction sites
Auction sites
  • Yahoo, Ebay
  • Necessity:
    • Ability to search and view items, view seller info and bid history, place a bid, online payment.
  • Advantage:
    • Ebay
      • Ebay store
      • PayPal
      • Micropayments
      • SkyPe:
        • Special SkyPe services for eBay sellers and buyers
Amazon Associates:
    •'s affiliate marketing program. By linking to Amazon products and services you can add compelling content for your site visitors enjoyment and receive up to 8.5% in referral fees for doing so.
    • aStore
being the first
Being the First
  • Internet Search Engines:
    • Yahoo, Google
    • Teoma
    • Mooter
new way of doing business
New Way of Doing Business
  • Dell:
    • Customization
  • America West website --
      • Select your seats
      • Web check-In (Travel Tools and Services)
comparing websites
Comparing Websites
  • Travel:Yahoo vs Expedia
    • Hotels
    • Cars
    • Vacations
    • Cruises
  • Real Estate:Century 21 vs ReMax
    • Buy: neighborhood, school
    • Sell
    • Finance
    • Learn
competitive forces model by michael porter
Competitive forces model by Michael Porter

Threat of

New Entrants

Bargaining Power

of Suppliers

Rivalry among

Existing Competitors

Bargaining Power

of Customers

Threat of Substitute


competitive strategies
Competitive Strategies
  • Cost leadership strategy:
    • Become a low cost producer of products and services
    • Find ways to help suppliers or customers reduce their costs
  • Product differentiation strategy.
  • Innovation strategy: Finding new way of doing business, enter new market.
  • Alliance strategy: Establish alliances with customer, suppliers, competitors, other company.
  • Growth strategy: expanding, diversifying, integrating.
strategic roles for information systems
Strategic Roles for Information Systems
  • Improving business operations
  • Promoting business innovation
  • Locking in customers and suppliers
    • Interorganizational IS, EDI, automatic inventory replenishment system
  • Creating switching costs
    • make customers dependent on the continued use of innovative IS.
  • Raising barriers to entry
    • discourage competitors from entering a market
the value chain and strategic is
The Value Chain and Strategic IS
  • It views a firm as a series, or chain, or network of basic activities that add value to its products and services, and thus add a margin of value to the firm.
    • Margin is the value of the firm’s products and services less their costs, as perceived by the firm’s customers.
  • Support activities:
    • Administration, human resource management ,etc.
  • Primary activities:
    • Inbound logistics, operations, outbound logistics, marketing, etc.
the value chain

Administrative Coordination & Support Services

Human Resource Management


Technology Development

Procurement of Resources












The Value Chain
becoming an agile competitor
Becoming an Agile Competitor
  • Agility in competitive performance is the ability of a business to prosper in rapidly changing, continually fragmenting global markets for high-quality, high-performance, customer-configured products and services. An agile company can:
    • 1. Make a profit in markets with broad product ranges and short model lifetimes
    • 2. Process orders in arbitrary lot sizes
    • 3. Offer individualized products while maintaining high volumes of production.
it and agility
IT and Agility
  • Agile companies depend heavily on information technology to:
    • 1. Enriched its customers with customized solutions to their needs.
      • Mass customization
    • 2. Cooperate with other businesses to bring products to market as rapidly and cost-efficient as possible.
    • B2B E-Commerce
      • Electronic Exchange: An electronic forum where manufacturers, suppliers, and competitors buy and sell goods.
      • Example: WorldWide Retail Exchange (WWRE)
it doesn t matter nicholas carr
IT Doesn’t Matter – Nicholas Carr
  • The basis for a sustainable competitive advantage is not ubiquity but scarcity.
  • The core functions of IT have become available to all.
  • Computer programs today are industry specific, most “right out of box””. That is they are commodities.
  • Costs of doing business – paid by all but provide distinction to none.
carr s rules for firms
Carr’s Rules for Firms
  • Spend less
  • Follow, don’t lead
  • Focus on the risks of IT, not the opportunities:
    • Webvan - wiki
    • Peapod