Week 3 - Organizational Strategy, Information Systems, and Competitive Advantage

Question 1

How Does Organizational Strategy Determine Information Systems Structure?

Answer 1

Industry structure determines competitive strategies
Competitive strategy determines value chains
Value chains, in turn, determine business processes
Business processes determine supporting information systems

Question 2

Industry Structure - Poster’s five forces + factors to consider

Answer 2

Competitive forces
1. Existing Rivalry
2. The threat of new entrants
3. The threat of substitutions
Bargaining Power
1. Supplier
2. Customer/buyer

Other factors to consider:
● Switching cost
● Supplier-buyer ratio
● Dependence
● Substitute availability

Question 3

Competitive Strategy

Answer 3

industry wide, focus, cost, differentiation

Question 4

Value Chain (definition, primary and support activities)

Answer 4

Value chain → a network of value-creating primary and support activities
Primary Activities in the Value Chain
1. 2. 3. 4. Inbound Logistic → Receiving, storing, and disseminating inputs to the product
Operations/Manufacturing → Transforming inputs into the final products
Outbound Logistic → Collecting, storing, and physically distributing the product to buyers
Sales and Marketing → Inducing buyers to purchase the product and providing a means for them
to do so
5. Customer Service → Assisting customers’ use of the product and thus maintaining and enhancing
the product’s value
Support Activities in the Value Chain
1. 3. 4. Technology → R&D, New Techniques, Methods, and Procedures
2. Procurement → Raw Materials
Human Resources → Training, Recruiting, and Compensation
Firm Infrastructure → General Management, Finance, Accounting, Legal, and Government
Affairs

Question 5

How Do Value Chains Determine Business Processes and Information Systems?

Answer 5

● Business processes implement value chains or portions of value chains
● Each value chain is supported by one or more business processes.

Question 6

How Do Information Systems Provide Competitive Advantages?

Answer 6

Product Implementations (product)
1. Create a new product or service
2. Enhance products or services
3. Differentiate products or services
Process Implementations (process)
4. 5. 6. Lock in customers and buyers
Lock in suppliers → Supply chain management system
Raise barriers to market entry
7. Establish alliances
8. Reduce cost