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Strategic Analysis in IS/IT: Planning for Future Market Leadership

This chapter delves into the strategic methodologies for Information Systems and Information Technology, focusing on effective planning criteria, market leadership, and value chain analysis. It examines strategic options for businesses to enhance their operational excellence, customer intimacy, and product leadership. Key methods such as resource life-cycle analysis and competitive assessment are highlighted. Additionally, it explores the role of IS/IT in achieving strategic goals, including using an application portfolio to optimize performance and drive business success.

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Strategic Analysis in IS/IT: Planning for Future Market Leadership

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  1. Chapter 5 IS/IT Strategic Analysis: The Future Potential

  2. Agenda • Criteria for effective planning • Business strategic and IS/IT strategic analysis methods • Market leadership • Value Chain • Strategic option generator • Resource life cycle analysis

  3. Criteria for Effective Planning • Situation analysis and competitive assessment • Evaluation of strategic options • Dynamic allocation of resources

  4. Market Leadership • By Treacy and Wiersma • Three paths to market leadership • Operational excellence: low costs and consistent quality (Wal-Mart) • Customer Intimacy: precisely and tailoring products and services to target market (Home Depot) • Product leadership: product innovation (Johnson and Johnson)

  5. Question • How can you utilize application portfolio (high potential, strategic, key operational, and support) to market leadership business strategy?

  6. Value Chain Analysis - I • corporate value chain = support activities & primary activities = value added = • Value added – cost = margin

  7. Value Chain Analysis - II • Support activities • Administration and infrastructure • Human resources management • Product and technology development • Procurement

  8. Value Chain Analysis - III • Primary activities • Inbound logistics • Operations • Outbound logistics • Sales and marketing • Services

  9. Value Chain Analysis - Types • Natural • The unattainable optimum structure for the industry’s value adding processes and information flows based on what needs to be done • Contrived • How (far from optimal ways) thins are currently done

  10. IS/IT Role in Value Chain Analysis • Information about the industry • Information about the corporate in the industry • Information about customers and suppliers to improve the business performance • Information flow in the corporate value chain for optimizing performance, reducing costs, and adding value

  11. Question • How can you usage application portfolio in value chain to achieve business goals?

  12. Strategic Option Generator - I • By Rackoff, Wiseman and Ullrich • To identify strategic IS opportunities in relation to three targets • Customers • Suppliers • Competitors

  13. Strategic Option Generator - II • Five strategic thrusts • Differentiation • Cost • Innovation • Growth • Alliance

  14. Strategic Option Generator - III • Two strategies • Offensive: to create or increase a competitive edge • Defensive: to reduce a competitor’s advantage or prevent a potential disadvantage

  15. Question • Can you give an example each for the IS/IT offensive strategy and IS/IT defensive strategy discussed in strategic option generator?

  16. Resource Life-Cycle Analysis • By IBM • Four main stages • Requirements determination • Acquisition • Stewardship • Retirement or disposal

  17. Points to Remember • Criteria for effective planning • Business strategic and IS/IT strategic analysis methods • Market leadership • Value Chain • Strategic option generator • Resource life cycle analysis

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