InfoTech Import Starategy in Plan- Week 1
Please find the attached word document and write the answer following questions, with no plagiarism and also attaching PowerPoints for your reference
Why is it important for business strategy to drive organizational strategy and IS strategy? What might happen if the business strategy was not the driver?
Ask an interesting, thoughtful question pertaining to the topic
Answer a question (in detail) posted by another student or the instructor
Provide extensive additional information on the topic
Explain, define, or analyze the topic in detail
Share an applicable personal experience
Provide an outside source (for example, an article from the UC Library) that applies to the topic, along with additional information about the topic or the source (please cite properly in APA)
Make an argument concerning the topic.
At least One scholarly source should be used. Use proper citations and references in your post. Why is it important for business strategy to drive organizational strategy and IS strategy? What might happen if the business strategy was not the driver?
Ask an interesting, thoughtful question pertaining to the topic
Answer a question (in detail) posted by another student or the instructor
Provide extensive additional information on the topic
Explain, define, or analyze the topic in detail
Share an applicable personal experience
Provide an outside source (for example, an article from the UC Library) that applies to the topic, along with additional information about the topic or the source (please cite properly in APA)
Make an argument concerning the topic.
At least One scholarly source should be used. Use proper citations and references in your post. Keri Pearlson, Carol Saunders,
and Dennis Galletta
Copyright 2016
John Wiley & Sons, Inc.
Managing and Using Information Systems:
A Strategic Approach Sixth Edition
Chapter 2
Strategic Use of Information Resources
2
Zara
Chapter opening case
How often do customers visit Zara each year?
When do customers buy the designs? Why?
How many designs do they make each year?
Is this possible without IT?
2016 John Wiley & Sons, Inc.
3
17 times a year compared to 4 times a year in an average store
Customers need to buy designs on the spotit will be gone next time they visit
More than 30,000
No, of course not!
3
4
2016 John Wiley & Sons, Inc.
Information Resources as Strategic Tools
What are information resources?
IT assets and capabilities (not just assets!)
5
2016 John Wiley & Sons, Inc.
5
IT Assets and Capabilities
IT Assets
IT infrastructure
Hardware
Software and company apps
Network
Data
Website
Information Repository
Customer information
Employee information
Marketplace information
Vendor information
IT Capabilities
Technical Skills
Proficiency in systems analysis
Programming and web design skills
Data analysis/data scientist skills
Network design and implementation skills
IT Management Skills
Business process knowledge
Ability to evaluate technology options
Project management skills
Envisioning innovative IT solutions
Relationship Skills
Spanning skills such as business-IT relationship management
External skills such as vendor-management
2016 John Wiley & Sons, Inc.
6
IT Assets
Infrastructure
Information, technology, people and processes available to perform business processes and tasks. (not just technology!)
Might even include resources not owned by the firm (e.g., eBay, Facebook, LinkedIn)
Information repository
Data captured, organized, and retrievable by the firm
2016 John Wiley & Sons, Inc.
7
IT Capabilities
Technical Skills (designing, developing, implementing IS)
Management Skills (managing the IT function and IT projects)
Relationship Skills
Outside the organization (vendors, customers)
Within the organization (managers)
2016 John Wiley & Sons, Inc.
8
Examples
Assets:
Proprietary technology (e.g., platforms)
Online community
Customer information
Capabilities:
Knowledge
Technical skills of IT staff
Friendly, helping nature of IT staff
2016 John Wiley & Sons, Inc.
9
The Strategic Landscape
Managers must take multiple views of the strategic landscape, such as:
First view – Porters five competitive forces model.
Second view – Porters value chain.
Third view focuses on the types of IS resources needed (Resource Based View).
10
2016 John Wiley & Sons, Inc.
10
Five competitive forces with potential
strategic use of information resources
11
2016 John Wiley & Sons, Inc.
11
Application of five competitive forces model.
12
2016 John Wiley & Sons, Inc.
Competitive Force IT Influence on Competitive Force
Threat of New Entrants
Can be lowered if there are barriers to entry. Sometimes IS can be used to create barriers to entry
Bargaining Power of Buyers Can be high if its easy to switch. Switching costs are increased by giving buyers things they value in exchange such as lower costs, effort, or time; or useful information
Bargaining Power of Suppliers Strongest when there are few firms to choose from, quality of inputs is crucial, or the volume of purchases is insignificant to the supplier
Threat of Substitute Products Depends on buyers willingness to substitute and the level of switching costs buyers face
Industrial Competitors Rivalry is high when it is expensive to leave an industry, the industrys growth rate is declining, or products have lost differentiation
12
Application of five competitive forces Zara example
13
2016 John Wiley & Sons, Inc.
Competitive Force IT Influence on Competitive Force
Threat of New Entrants
Zara supports its tightly knit group of designers, market specialists, production managers, and planners. These relationships take time. Rich customer information in its database would take time to develop.
Bargaining Power of Buyers Recently, Zara has created a laser-created database of sizes for 10,000 real women volunteers. New products will be more likely to fit.
Bargaining Power of Suppliers Computer-controlled cutting machine can cut 1,000 layers at a time. A large number of sewers are available.
Threat of Substitute Products IT helps Zara offer extremely fashionable clothing that would last 10 wears. The result is trendy clothes at reasonable prices, making substitutes difficult
Industrial Competitors Zara tracks breaking trends and customer preferences. The result is the highest sales per square foot in the industry without much advertising, low inventories, only 10% of inventory unsold, new products from idea to shelves in 15 days, and manufacturing efficiencies
13
Porters Value Chain Model
Value Chain model addresses the activities that create, deliver, and support a companys product or service.
Two broad categories:
Primary activities relate directly to the value created in a product or service.
Support activities make it possible for the primary activities to exist and remain coordinated.
Competition can come from:
Lowering the cost to perform an activity, increasing profit.
Adding value to a product or service so buyers will be willing to pay more (again, increasing profit).
14
2016 John Wiley & Sons, Inc.
14
Value chain of the firm.
15
2016 John Wiley & Sons, Inc.
15
The Value System
The value chain model can be extended by linking many value chains into a value system.
Much of the advantage of supply chain management comes from understanding how information is used within each value chain within the larger system.
16
2016 John Wiley & Sons, Inc.
16
The value system: interconnecting
relationships between organizations.
17
2016 John Wiley & Sons, Inc.
17
Zara and Primary Activities
Primary Activity Zaras Value Chain
Inbound Logistics IT-enabled JIT (just in time) strategy
Most dyes are purchased from Zara subsidiaries
Suppliers are located near production facilities
Operations IT supports decisions about fabric, cut, and pricing
Products are hung on hangers to avoid ironing at stores
Price tags are already on the products
60% of merchandise is produced in house
Fabric is cut and dyed by robots in 23 highly automated factories
Outbound Logistics Clothes move on miles of conveyer belts
Clothes reach stores within 48 hours of the order
Marketing and Sales Limited inventory permits low percent of unsold goods (10%)
Point-of-Sales systems linked to HQ
Managers provide information on customer needs daily via hand-held computers
Service No focus on service; clothes only last 10 wears
2016 John Wiley & Sons, Inc.
18
Zara and Secondary Activities
Secondary Activity Zaras Value Chain
Organization Tightly-knit collaboration between designers, store managers, market specialists, production managers, production planners
Human Resources Managers are trained to understand customer needs and report to designers daily
Managers help Zara keep on cutting edge of fashion
Technology All primary activities are supported by integrated technology
Automated conveyers speed up logistics
Purchasing Vertical integration reduces the amount of purchasing needed
2016 John Wiley & Sons, Inc.
19
Sustainability
Attaining competitive advantage is one thing
A firm often exploits rare and valuable resources
But sustaining competitive advantage is another
Resources must be difficult to transfer or relatively immobile
20
2016 John Wiley & Sons, Inc.
20
Sustainability Framework
21
Source: Piccoli & Ives
2016 John Wiley & Sons, Inc.
21
But Isnt Sustaining an Advantage
a Deadly Distraction?
Some focus on sustaining would be useful
Some sustaining steps are not too difficult or expensive
It will help profitability while inventing more disruptive measures
It might save the firm if disruption measures fail
But some focus on disruption is also useful
Sometimes sustaining requires too much effort
Disruption can have a huge payoff
2016 John Wiley & Sons, Inc.
22
The Resource Based View
23
2016 John Wiley & Sons, Inc.
IT Assets at Zara
2016 John Wiley & Sons, Inc.
24
IT Capabilities at Zara
2016 John Wiley & Sons, Inc.
25
Social Capital as an IT Resource
Social capital:
the sum of the actual and potential resources embedded within, available through, and derived from the individual or firms network of relationships
Structural Who is connected to whom
Relational How the people interact (e.g., respect, friendship)
Cognitive How the people think and the impact of a shared language
2016 John Wiley & Sons, Inc.
26
Relationships with Other Firms
Strategic Alliances
Inter-organizational relationship that affords one or more company a strategic advantage
Example: Zynga and Facebook
Business ecosystems provide abundant examples
Co-opetition
Companies cooperate and compete at the same time
Example: Microsoft builds laptops but also supplies operating systems to other laptop makers
2016 John Wiley & Sons, Inc.
27
Potential Risks
There are many potential risks that a firm faces when attempting to use IT to outpace their competition.
Executives should be aware of these risks in advance!
Awakening a sleeping giant a large competitor with deeper pockets may be nudged into implementing IS with even better features (Schwab/eTrade; FedX/UPS)
Demonstrating bad timing sometimes customers are not ready to use the technology designed to gain strategic advantage (Apples Newton, Shelternet)
Implementing IS poorly information systems can fail because they are poorly implemented (Nike; Hershey)
Failing to deliver what users want systems that dont meet the firms target market likely to fail (Streamline.com groceries)
Running afoul of the law Using IS strategically may promote litigation (Airline reservation systems)
28
2016 John Wiley & Sons, Inc.
28
Co-Creating IT and Business Strategy
Not just alignment, but partnership
Example: FedEx
Are you paying only for the delivery?
Or are you also paying for information about the delivery?
Fedex would not be able to accomplish the delivery without the IS components.
Can you separate IT strategy from your business strategy?
The trend is towards integrating the two.
2016 John Wiley & Sons, Inc.
29
Keri Pearlson, Carol Saunders,
and Dennis Galletta
Copyright 2016
John Wiley & Sons, Inc.
Managing and Using Information Systems:
A Strategic Approach Sixth Edition
