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Strategy Models for IS

Strategy Models for IS. Competitive Advantage From Information Systems. Objectives. Understand strategy models for IS Think about how they might be used by managers to evaluate ideas for information systems. What is Strategy?.

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Strategy Models for IS

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  1. Strategy Models for IS Competitive Advantage From Information Systems

  2. Objectives • Understand strategy models for IS • Think about how they might be used by managers to evaluate ideas for information systems

  3. What is Strategy? • Strategy has to do with the basic objectives and mission of the firm • What are the products? • Who are the customers? • What pricing, positioning • What resources? • What does the firm do in-house or outside? • Plan • Pattern of behavior (emergent)

  4. Strategic Models for IS • Critical Success Factors • Strategic Grid Analysis • Generic Strategies • Five Forces • Value Chain • Customer Resource Life Cycle

  5. Critical Success Factors CSFs = the handful of things that have to go right for the organization to flourish

  6. Critical Success Factors • Avis Rent-a-Car • Availability of a clean, mechanically sound car when the customer arrives • Citicorp • Accuracy of the information provided to customer about accounts

  7. Critical Success Factors • Use CSFs to determine functions for IS investment

  8. Strategic Grid Analysis IT Impact on Current Operations IT Impact on Future Strategy of the Firm

  9. Generic Strategies

  10. Generic Strategies Texas Tech Univ of Penn. Haynes Barber School Oberlin Music Academy

  11. FiveForcesModel Affect value distribution?

  12. Five Forces Model • Look for opportunities to use IT to: • Increase bargaining power with customers—lock them in • Reduce bargaining power of suppliers—market search capability • Create barriers to new entrants • Differentiate product from potential substitutes

  13. Value Chain New infrastructure? Unbundle? Link to customers? Link to suppliers? New channels?

  14. Value Chain • Look for opportunities to • Convert physical activities to information flow—save costs • Add information value to the product—revenue, market share

  15. Customer Resource Life Cycle • Requirements • Acquisition • Stewardship • Retirement Ives and Learmonth, 1984

  16. Requirements • Establish requirements—to determine how much of a resource is required • Levi’s style finder • Customers asked to rate interests in music, fashion and entertainment • http://store.us.levi.com/store/home.asp

  17. Requirements • Specify—to determine a resource’s attributes • Benjamin Moore-tools for selecting the appropriate paint • http://www.benjaminmoore.com/ • Saturn site allows buyers to “build a car”

  18. Acquisition • Select source—to determine where customers will buy a resource • BMW site locates the dealer closest to you with the car you specify • Ordering—to order a quantity of a resource from the supplier • Office Depot allows the customer to create standing order for repeat purchases

  19. Acquisition • Authorize and pay for—to transfer funds or extend credit • American Express provides protection against theft and damage of the merchandise purchased • The NY Times gives its online version away.

  20. Acquisition • Acquire—to take possession of a resource • The encyclopedia Britannica has made its CD version available at $149 vs $1250 for the print version • Test and accept—To ensure that a resource meets specifications • Herman Miller lets customer layout a room full of furniture on screen

  21. Stewardship • Integrate—to add to an existing inventory • FedEx interNetShip allows customers to create and edit their own directory of frequent customers • Monitor—to control access and use of a resource • FedEx and UPS systems allow customer to track parcels while in route

  22. Stewardship • Upgrade—to upgrade a resource if conditions change • Netscape customers learn of need for upgrade with email containing a URL • Maintain—to repair a resource, if necessary • Ford Motor Company’s site allows customers to create personalized car page

  23. Retirement • Transfer and dispose—to move, return or dispose of inventory as necessary • Dell computers Value Recovery Services helps firms recoup salvage value for old computers • Account for—to monitor where and how much is spent on a resource • Office Depot--online purchase history report

  24. How to use the CRLC • Each element in the CRLC represents a way to provide value to customers through information • Incorporate into a business model where customers pay for the value in some manner

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