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Agendas

Agendas. IT and Strategy (Chapter 1) Recap of Chapter 4 Strategy and Internet (Group Discussion). Course Road Map. Module 1 – Business Impacts. $2.5 trillion spent on technology 1997-2001 Nearly double amount for previous five years

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Agendas

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  1. Agendas IT and Strategy (Chapter 1) Recap of Chapter 4 Strategy and Internet (Group Discussion)

  2. Course Road Map

  3. Module 1 – Business Impacts • $2.5 trillion spent on technology 1997-2001 Nearly double amount for previous five years • Globally, $1.55 trillion in 2007, growing by 5% following 8% increases in both 2005 and 2006. • Why so much? Internet buzz and experimentation Overhaul of aging IT infrastructure • This module discusses how to leverage IT to create business advantage and avoid risk.

  4. Chapter 1: IT and Strategy – Business Model • Business Model Defines how an enterprise interacts with its environment to define a unique strategy, attract the resources and build the capabilities to execute it, and in the process, create value for all stakeholders • Strategy dimension: Revenue model • Capability dimension: Cost model

  5. Chapter 1: IT and Strategy – Business Model Components of a Business Model

  6. Chapter 1: Analyzing Value

  7. Chapter 1: Strategic Positions Strategic Positions • Market/Channel positioning • Product positioning • Value chain/Value network positioning • Boundary positioning Sustainable advantage

  8. Chapter 1: IT and Strategy – Strategic Positions Analyzing Competitive Forces and Strategic Positioning

  9. Chapter 1: Strategic Audits • Customer Audit • Competitor Audit Porter’s Five Forces Model • Product/Market Positioning Audit • Value Network Audit • Business Context Audit

  10. Chapter 1: IT and Strategy – Strategic Audits Porter’s Five Forces Model

  11. Chapter 1: Product/Market Positioning Audit Product/Market Positioning

  12. Li and Fung Case: • Time Line • 1906 – founded by Mr. Li and Mr. Fung as an export trading company • 1920s & 1930s – expanded to warehousing and handicrafts manufacturing • 1995 – acquiring Inchcape Buying Group • 2001 – E-commerce serving SMEs • Today?

  13. Analyze Li and Fung Case Using Product/Market Positioning Broad Target Market/ Market Positioning Narrow Low Cost Value-Added Strategy/ Product Positioning

  14. Chapter 1: IT and Strategy – Strategic Shifts Strategic Shifts: Evolution • Enhancement • Expansions Strategic Shifts: Revolution • Extensions • Exits TQM or BPR

  15. Chapter 1: IT and Strategy – Strategic Shifts Options for Evolving Strategy

  16. Chapter 1: IT and Strategy – IT Impact and Alignment Strategic Grid IT impact on business IT impact on strategy Support Factory Turnaround Strategic

  17. Chapter 1: IT Impact (Strategic Grid) Strategic Grid

  18. Strategic Grid Exercise • Place the following organizations in the Strategic Grid: • Covenant Health System (RFID) • Southwest Airlines • Bank of America • Caterpillars

  19. Strategic Grid Exercise High Low Impact on Operations Low High Impact on Strategy

  20. Chapter 1: IT and Strategy – Opportunities and Risks • Crisis (危机) means both risks (危: wei) and opportunities (机: ji) in Chinese • Opportunities Can IT change the basis of competition? Why? Why not? Can IT change the nature of relationships and the balance of power among buyers and suppliers? Why? Why not? Can It build or reduce barriers to entry? Why? Why not? Can IT increase or decrease switching costs? Why? Why not? Can IT add value to existing products and services or create new ones? Why? Why not?

  21. Chapter 1: IT and Strategy – Opportunities and Risks • Risks Can emerging technologies disrupt current business models? Are we too early or too late to exploit an IT opportunity? Does IT lower entry barriers? Does IT trigger regulatory action? • Disruptive Technologies Examples

  22. Chapter 1: IT and Strategy - Disruptive Technologies Analyzing Disruptive Technologies

  23. Chapter 1: IT and Strategy – Windows of Opportunity Cash Flow vs. Windows of Opportunity Analyzing the Cash Flow Curve

  24. Strategy and Internet (Michael Porter, 2001) Group Discussion • Porter claimed that revenues, costs and share prices are distorted during the dot.com boom. Please explain. • What is the different between Internet Technology and the use of Internet Technology? What is the implication of this difference for companies? • What are the two fundamental factors that determine profitability? Elaborate on each of them. • What are the positive trends of industry structure influenced by Internet? What are the negative trends? • Discuss Internet and competitive advantage in terms of the following approaches: • Operational effectiveness (Why operational effectiveness alone is not enough to sustain competitive advantage?) • Strategy positioning • Internet as Complement?

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