Strategic information systems, computer systems that are used to change the target level of the organization, operations, products, services, or environmental relationships to help organizations achieve competitive advantage. Decision of the company's business strategy depends on: Products and services company Industry where firms compete Competitors, suppliers, and customers of the company Long-term goals of the company Business level strategy: Value Chain Model The most common strategy for this level is: be producing products with low production costs differentiate products and services change the scope of the competition either by expanding the market to the global market and to narrow the market.
Value chain model, a model which addresses the primary and support activities that add value to products and services in which the company is best applied information systems to gain a competitive advantage. primary activity is directly associated with the production and distribution of the company's products or services. While supporting activity is an activity that allows the execution of the primary activity. Consists of organizational infrastructure, human resources, technology, and procurement. Web refers to the value of customer-controlled network of the company that use information technology to coordinate its value chain in order to collectively produce products or services to market. Products and Services Information System
Systems that create product differentiation: Companies can use IT to develop different products.
Creating brand loyalty by developing new and unique products and services
Products and services not easily duplicated by competitors. For example, Dell Corporation.
System that supports Niche Markets Intensive analysis using customer data to support new ways of contacting and serving customers that allows to develop new niche markets for specific products or services. For example, frequent guest program Wyndam Hotel Supply Chain Management and Efficient Customer Response System The system connects to the corporate value chain value chain of suppliers and consumers. System that directly connects back to the distributor of consumer behavior, production, and supply chain. Example: Wal-Mart purchasing directly connect customers to the suppliers almost immediately. suppliers work to ensure the product is delivered to the store to replace the product purchased. IT at the organizational level is used to avoid the shift of consumers to other suppliers and bind them to the company. Replacement cost is the cost incurred by the customer or the company for the time and resources are wasted when switching from one supplier or system to system supplier or competitor. For example, Baxter International. Strategy-level corporate and Information Technology
Expand the core competencies, the activities in which the firm excels as a world-class leader. Information systems encourage the sharing of knowledge across business units and hence increase the company's competence. Industry-level strategy and Information Systems: competitive forces and economic networks. The company operates in the larger environment that consists of other companies, governments, and nations. Partnership information, cooperative alliances undertaken by two or more companies that aim to share information to gain strategic advantage. Help companies gain access to new customers, create new opportunities for cross-selling and targeting products. Porter's five forces model In larger environments, there are five major power or threat:
New market entrants Substitute products and services Supplier Customer Other companies that compete directly Competitive forces model, the model used directly to explain the interaction of external influences, specifically threats and opportunities, and strategies that affect the organization's ability to compete. Internet technology has affected the structure of the industry Provide the technology to make it easier for competitors to compete in terms of price and new players in the market. Improving the information available to customers grows in price thus increasing the bargaining power. Lowering power supplier Substitute goods Business ecosystem IT plays a strong role in creating new forms of ecosystem products business. Business ecosystem is a network of suppliers, distributors, outsourcing firms, transportation companies, and manufacturing technology are interrelated. For example, Microsoft: 1 billion PCs around the world and hundreds of thousands of businesses rely on Microsoft platforms. EBay: Millions of people and thousands of businesses using the company's platform. Wal-Mart: Enterprise systems used by suppliers to increase efficiency .
Network Economics
products and services exhibit strong network effects and potentially creating a situation of "winner take all". Network causing costs to add other participants or fewer zero, otherwise the benefits could be even greater. Contrary to the law of profit decline in industrial and agricultural products. For example, the value of the Internet is growing exponentially with a linear increase in users. Because software can be certain standards (such as the Windows operating system or the Windows Office), people could be locked into the Windows standard and value grows as more and more people are using it.
Good strategy, using IT to build products and services that cause network effects. Management opportunities, the Company faces the development of IT-based opportunities to gain strategic advantage.
Management Challenges
Some companies are facing major obstacles in implementing contemporary systems.
Once profit is reached, there is difficulty in maintaining excellence.
Organizations often can not be changed to accommodate new technologies quickly enough
Guidelines for Completion of strategic systems analysis Understanding the structure and dynamics of industry competition in which the company operates. Understanding the business value chain, enterprise, and industrial Consider how companies can manage "strategic shift" in an effort to implement a system that provides a competitive edge.
