Using MIS 5e International Edition Chapter 3 MIS and Competitive Strategy by David Kroenke

Wheres the Data?

Buyers dont communicate with operations when negotiating with vendors Buyers need data to look at prices and costs of dealing with individual vendors Need more data and people involved in making negotiating deals

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Chapter 3-2

Study Questions
Q1: How does organizational strategy determine information systems structure? Q2: What five forces determine industry structure? Q3: How does analysis of industry structure determine competitive strategy? Q4: How does competitive strategy determine value chain structure? Q5: How do business processes generate value? Q6: How does competitive strategy determine business processes and the structure of information systems? Q7: How do information systems provide competitive advantages? Q8: 2022?

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Chapter 3-3

Q1: How Does Organizational Strategy Determine Information Systems Structure?

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Chapter 3-4

Q2: What Five Forces Determine Industry Structure?

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Chapter 3-5

Q2: Five Forces at GearUp

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Chapter 3-6

Q3: How Does Analysis of Industry Structure Determine Competitive Strategy?

Porters Four Competitive Strategies

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Chapter 3-7

GearUps Competitive Strategy

Low Cost/Focused Do everything to keep costs down Focus within sporting goods category Focus on buyers interested in special, short-term sales

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Chapter 3-8

Q4: How Does Competitive Strategy Determine Value Chain Structure?

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Chapter 3-9

Q4: Value Chain Structure?

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Chapter 3-10

Support Activities in the Value Chain

Support Activity Technology Procurement Human Resources Description

R & D, New Techniques, Methods, Procedures

Raw Materials Training, Recruiting, Compensation General Management, Finance, Accounting, Legal, Government Affairs
Chapter 3-11

Firm Infrastructure

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Q5: How Do Business Processes Generate Value?

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Chapter 3-12

Improved Material Ordering Process

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Chapter 3-13

Q6: How Does Competitive Strategy Determine Business Processes and the Structure of Information Systems?

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Chapter 3-14

Q6: How Does Competitive Strategy Determine Business Processes and the Structure of Information Systems? (contd)

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Chapter 3-15

High-Service Bike Rental

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Chapter 3-16

Q6: Bottom Line

Organizations analyze their industry, then choose a competitive strategy Create business processes to span value-generating activities to support given strategy Processes determine scope and requirements of the information systems

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Chapter 3-17

Q7: How Do Information Systems Provide Competitive Advantages?

Principles of Competitive Advantage

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Chapter 3-18

Competitive Advantage via Products

1. Create new products or services 2. Enhance existing products or services 3. Differentiate products or services By cost By quality

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Chapter 3-19

Competitive Advantage via Business Processes

1. Lock in customers Create high switching costs 2. Lock in suppliers Make it easy to connect to and work with your organization 3. Create entry barriers Make it difficult and expensive for new competition 4. Create better business processes to establish alliances
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Chapter 3-20

How Does This System Create a Competitive Advantage?

Enhances existing products Differentiates products Locks in customers Raises barriers to market entry Increases profit margins by decreasing costs and decreasing errors

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Chapter 3-21

Q8 2022?
Unlikely GearUp will exist New opportunities for IT-based organizations Reduce medical costs by supporting governmental functions, like Medicare and related programs Web-based services to track medical bills, Medicare and supplemental insurance payments, track unpaid bills

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Chapter 3-22

Guide: Limiting Access to Those Who Have Access

Digital divide segregates haves and havenots Internet gives access to knowledge Advantages to those with easy access
Divide deepens education, income, social differences

Internet access available at public places, but:

Not everyone served Not as convenient as home access

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Chapter 3-23

Benefits of Access
Intellectual capital on Internet readily available Benefits for businesses Cheaper product customer support Reduces warehousing costs Reduces mailings costs

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Chapter 3-24

Digital Divide: Issues to Think About

What groups of people in the United States are not connected to the Internet? Does it make sense for benefactors, such as Bill and Melinda Gates, to provide access to those in poverty? What keeps elderly from accessing the Internet?

Should government help the elderly?

What could be done to provide Internet access for poorly educated people?

What role, if any, could local governments have? State? Federal? United Nations?

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Chapter 3-25

Digital Divide: Issues to Think About (contd)

If you are from outside the United States, what is the connectivity situation in your country? Is there a digital divide there? Do some countries have less connectivity than others? What does this mean for their ability to compete? What does this mean for citizens of those countries?
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Chapter 3-26

Take Aways from Guide

Knowledge grows exponentiallyjust like capital Digital divide can create or worsen social problems Businesses and government should explore their social responsibilities with respect to digital divide

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Chapter 3-27

Guide: Your Personal Competitive Advantage

Who will be your competitors when you seek a job after graduating from college? What will be your competitive advantage in the job market? What can you do before you graduate to develop your competitive advantage?

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Chapter 3-28

Guide: Your Personal Competitive Advantage (contd)

How could these concepts help you get and keep a job? Switching costs? Differentiating products? Creating barriers? Establishing alliances? Reducing costs, increasing revenues?

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Chapter 3-29

Active Review
Q1: Q2: Q3: Q4: Q5: Q6: Q7: Q8: How does organizational strategy determine information systems structure? What five forces determine industry structure? How does analysis of industry structure determine competitive strategy? How does competitive strategy determine value chain structure? How do business processes generate value? How does competitive strategy determine business processes and the structure of information systems? How do information systems provide competitive advantages? 2022?
Chapter 3-30

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