Understanding the Role of Information Systems in Porter's Competitive Model and Business -, Assignments of Accounting

Download Understanding the Role of Information Systems in Porter's Competitive Model and Business - and more Assignments Accounting in PDF only on Docsity! 1 ISM 50 - Business Information Systems Lecture 5 Instructor: John Musacchio UC Santa Cruz April 18, 2006 Announcements Read Messerschmitt Ch 2.3 (38-50) Messerschmitt Ch 3.1-3.3 (59-82) Homework assignment 2 posted on web (due on Thursday April 20th) Group assignments and presentation assignments to be posted to web site Contact Shiv if you have questions (shiv@soe.ucsc.edu) Announcements This Week’s Presentations: 4/18 Nicole Flores (news article) Matteo Pra (Frito Lay Case) 4/20 Zak Kus (news article) Ryan Go (news article) Student Presentation Nicole Flores (news article) Porter Competitive Model? What is it? A model to help understand the competitive environment in which a company operates. What are the “5 forces”? Intra-Industry Competition Bargaining power of Suppliers Bargaining power of Customers Substitutes Threat of New Entrants. Porter Competitive Model (Identify the Industry and the Specific Market Being Evaluated) Intra-Industry Rivalry Strategic Business Unit Bargaining Power of Buyers Bargaining Power of Suppliers Substitute Products and Services Potential New Entrants 2 What do Porter Models Have to do with IT? Any ideas? Strategic Application Evolution Progression of Information Technology within an enterprise. Level 1: Strategic Level 2: Offensive Level 3: Defensive Level 4: Cost-Justified Level 5: Controlled The progression is from bottom to top. Strategic Uses of Information Technology Improving Business Processes Promote Business Innovation Locking in Customers and Suppliers Use IT to reduce costs of doing business Use IT to improve quality Use IT to link business to customers and suppliers Use IT to create new products or services Enhance Efficiency Create New Business Opportunities Maintain Valuable Customers and Relationships Strategy IT Role Outcome Strategic Uses of Information Technology Raise Barriers to Entry Build a Strategic IT Platform Build a Strategic Information Base Increase amount of investment or complexity of IT needed to compete Use IT to provide information to support firm’s competitive strategy Leverage investment in IS resources from operational uses to strategic uses Increase Market Share Create New Business Opportunities Enhance Organizational Collaboration Strategy IT Role Outcome Porter Model and Information Systems: 1. Build barriers to prevent a company from entering an industry? 2. Build in costs that would make it difficult for a customer to switch to another supplier? 3. Change the basis for competition within the industry? 4. Change the balance of power between a company and its customers or suppliers? 5. Provide the basis for new products and services? Porter’s Value Chain Porter’s Competitive Model deals with the a company’s competitive environment. Porter’s Value Chain tracks progress of a product through organization Starts with idea in research Finishes with delivery to customer.