How does organizational strategy determine information system requirements?
Strategy determines value chains, which determines business processes. Business processes determine requirements and functions of information systems.
Organizational Strategy Determines Information Systems order
Industry Structure → Competitive Strategy → Value Chain → Business Processes → Information Systems
What Five Forces Determine Industry Structure
1) Competition from vendors who manufacture substitutes
2) Competition from new competitors
3) Competition from existing rivals
•Bargaining power forces
4) bargaining power of suppliers
5) bargaining power of customers
Cost vs Differentiation and Industry-wide vs Focus
Task descriptions for primary activities of the value chain
Inbound logistics, Operations/Manufacturing, Outbound Logistics, Sales and Marketing, Customer Service
Receiving, storing, disseminating inputs to the product
Transforming inputs into the final product
Collecting, storing, and physically distributing the product to buyers
Sales and Marketing
Inducing buyers to purchase the product and providing a means for them to do so
Assisting customer's use of the product and thus maintaining and enhancing the product's value
How do value chains determine business processes and information systems?
Business processes implement value chains or portions of value chains. Each value chain is supported by one or more business process. The information systems are then implemented in order to make the operation run smoothly and productively
How do information systems provide competitive advantages?
•Create a new product or service:
Such as a eReader that works with all the
books that bookstore sells.
•Enhance products or services
Make the environment more welcoming
and interactive for customers to find
•Differentiate products or services
Make textbooks the store sells new come
with a dvd that has all the content on it.
•Lock in customers and buyers
Give them rewards for being loyal, like
discounts on future book purchases
•Lock in suppliers
Give them a reason to sell cheaper to your
•Raise barriers to market entry
Create excellent value for customers
Gain support from other competitors
Go green, and find ways to automate
How to use IS to create competitive advantages?
Maintain customer account data
-IS collects information for ABC (adds value)
- IS saves customers time by automatically
filling in part of form (adds value for
Package and information delivery system
- IS helps customers to select delivery address
and generate shipping labels
- What value does shipper get?
Information systems can be...
a product (like GPS in a car), or they can support a product .
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