Using Technology to Develop Competitive Advantages

Value Chain and Porters 5 ForcesReview

Internal to the Business

◦ Innovation◦ Streamlined production◦ Effective planning◦ Employee motivation◦ Rapid generation of solutions

to issues – tactical planning◦ Proficient development of

ideas and realization of those ideas –strategic planning

Business Complexity Factors

Internal to a

business is termed “Business Facing”

External to the Business

◦ Effective marketing and sales◦ Product development and

innovation◦ Service development◦ Quality manufacturing◦ Distribution processes◦ Billing processes◦ Order processing◦ Customer service

Business Complexity Factors

External to the

business is termed

“Customer Facing”

Think of DifferencesWhile there may be differences in technologies the company’s sell, what are some of the differences in technologies the company’s may use.

Technology used in a company are vastly different than technologies a company sells!

How are technologies used to better run a business?

Business Challenges and Solutions

Business Challenges

People

OrganizationTechnology

Business Solutions

a. Opportunities for new technology ariseb. You have powerful competitor

a. A new business strategy is developed

b. New products and services are selected

a. Creation or modification is done to:

a. Track strategyb. Manage new product

offerings

a. The strategy is implemented

b. Partnering with other vendors is achieved

a. Sales are increasedb. Better service is

provided

Business Challenges and Solutions

Business Challenges

People

OrganizationTechnology

Business Solutions

a. Opportunities for new technology ariseb. You have powerful competitor

a. A new business strategy is developed

b. New products and services are selected

a. Creation or modification is done to:

a. Track strategyb. Manage new product

offerings

a. The strategy is implemented

b. Partnering with other vendors is achieved

a. Sales are increasedb. Better service is

provided

Cycle starts over again

Business Challenges and Solutions

Business Challenges

People

OrganizationTechnology

Business Solutions

Business Challenges and Solutions

Now tie Porters 5 Forces

IntoBusiness Challenges

and Solutions

Overall Issue in any business, alignment of IT with business objectives

Identify and understand business goals and strategies

Break strategic goals into concrete activities and processes

Identify metrics for measuring progress – Key Performance Indicators (KPI’s)

Determine how IT can help achieve business goals

Be able to measure actual performance of the strategies

How to Align IT in a Business

Identify and understand business goals and strategies

Break strategic goals into concrete activities and processes

Identify metrics for measuring progress – Key Performance Indicators (KPI’s)

Determine how IT can help achieve business goals

Be able to measure actual performance of the strategies

How to Align IT in a Business

One Big Outcome: Lower

Cost

Information systems can be created to enable new products and services or improve existing products and services

Information systems can be created to enable new products and services or improve existing products and services

Product Differentiation

Information Systems and Market Focus

Analysis of customer buying habits

Record, track and report on customer preferences

Analysis of product profitability and cost of goods sold (COGS)

Project which products to sell and which ones not to sell

Information Systems and Market Focus

Analysis of customer buying habits

Record, track and report on customer preferences

Analysis of product profitability and cost of goods sold (COGS)

Project which products to sell and which ones not to sell

Market Direction and Focus

Impact of TechnologyHow has technology impacted business?Lets look at the internet in conjunction with the five forces.

•Widens market•Increases competitors•Reduces differences•Pressures competition on price

Existing Competitors

•Reduces barriers to entry•Provides technology for driving business process

New Entrants

•Facilitates creation of new products and services

Substitute Products and Services

•Bargaining power shifts to customer

Customers Bargaining Power

•Procurement over internet raises power over suppliers•Suppliers can benefit from reduced barriers to entry•Elimination of intermediaries

Suppliers Bargaining Power

Technology plays with business from all aspects. It can help and hurt a business. It can help and hurt a consumer. It can help and hurt a supplier. It can enhance and restrict market activity.

In other words, technology can be good or bad depending on how a business makes use of it.