Strategy Models for IS
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Transcript of 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? 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)
Strategic Models for IS Critical Success Factors Strategic Grid Analysis Generic Strategies Five Forces Value Chain Customer Resource Life Cycle
Critical Success Factors
CSFs = the handful of things that have to go right for the organization to flourish
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
Critical Success Factors Use CSFs to determine functions for
IS investment
Strategic Grid Analysis
FactoryGoal: improve performance of systemsProjects: consider re-engineering processes
Example: Hong Kong government
StrategicGoal: transform the industryProject management: change management
Example: HSBC
SupportGoal: Improve local performance to control costsProject management: grassroots experimentationExample: UNLV
TurnaroundGoal: identify and launch new systems and venturesProject management: New venture developmentExample: Caregroup
IT Im
pact
on
Cu
rrent
Opera
tions
IT Impact on Future Strategy of the Firm
Generic Strategies
Generic Strategies
Texas Tech Univ of Penn.
Oberlin Music Academy
Haynes Barber School
FiveForcesModel
Affect value distribution?
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
Value Chain
Unbundle?
Link to customers?Link to suppliers?New channels?
New infrastructure?
Value Chain Look for opportunities to
Convert physical activities to information flow—save costs
Add information value to the product—revenue, market share
Customer Resource Life Cycle Requirements Acquisition Stewardship Retirement
Ives and Learmonth, 1984
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
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”
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
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.
Acquisition
Acquire—to take possession of a resource The encyclopedia Britannic
a 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
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
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
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
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