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CHAPTER 2. Organizational Strategy, Competitive Advantage, and Information Systems . Competitive Advantage . Competitive advantage is an advantage over competitors in some measure such as: Cost Quality Speed Desired Results: C ontrol of a market L arger-than-average profits.

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chapter 2

CHAPTER 2

Organizational Strategy, Competitive Advantage, and Information Systems

competitive advantage
Competitive Advantage
  • Competitive advantage is an advantage over competitors in some measure such as:
    • Cost
    • Quality
    • Speed
  • Desired Results:
    • Control of a market
    • Larger-than-average profits
business process
Business Process
  • Collection of related activities that produce a product or a service of value to:
    • Organization
    • Business partners
    • Customers
  • Cross-Functional Business Processes
slide4

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Traveler

Airline Web Site

Seats Available

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Notify Traveler

Plan Trip

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Reserve Seats

Check Flights

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Frequent Flyer Mileage Sufficient?

Use Credit Card?

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Seats Available?

NO

YES

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Charge Credit Card

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Subtract Mileage

Submit Ticket Order

Charge OK?

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Notify Traveler

Receive e-Ticket

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Confirm Flight(s)

Issue e-Ticket

business pressures organizational responses and it support
Business Pressures, Organizational Responses, and IT Support
  • Business Pressures
    • Market Pressures
    • Technology Pressures
    • Societal Pressures
market pressures
Market Pressures
  • The Global Economy & Strong Competition
  • The Changing Nature of the Workforce
  • Powerful customers
technology pressures
Technology Pressures
  • Technological Innovation and Obsolescence
  • Information Overload
societal pressures
Societal Pressures
  • Social Responsibility
  • Government Regulation and Deregulation
  • Protection Against Terrorist Attacks
  • Ethical Issues
organizational responses
Organizational Responses
  • Strategic Systems
  • Customer Focus
  • Make-to-Order and mass customization
  • E-business and E-commerce
porter s competitive forces model1
Porter’s Competitive Forces Model
  • Threat of entry of new competitors is high when it is easy to enter a market and low when significant barriers to entry exist.
  • A barrier to entry is a product or service feature that customers expect from organizations in a certain industry.
  • Impact of Internet?
porter s competitive forces model2
Porter’s Competitive Forces Model
  • The bargaining power of suppliers is high when buyers have few choices and low when buyers have many choices.
  • Impact of Internet?
porter s competitive forces model3
Porter’s Competitive Forces Model
  • The bargaining power of buyers is high when buyers have many choices and low when buyers have few choices.
  • Switching costs are the costs (money and time) to buy elsewhere.
  • Impact of Internet?
porter s competitive forces model4
Porter’s Competitive Forces Model
  • The threat of substitute products or services is high when there are many substitutes for an organization’s products or services and low where there are few substitutes.
  • What types of industries have highest threat of substitute products/services? Why?
porter s competitive forces model5
Porter’s Competitive Forces Model
  • Therivalry among firms in an industry is high when there is fierce competition and low when there is not.
  • What are industries that have high rivalry?
strategies for competitive advantage
Strategies for Competitive Advantage
  • Cost Leadership
  • Differentiation
  • Innovation
  • Operational Effectiveness
  • Customer-orientation
  • Examples of businesses who implement these?