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Using Technology to Develop Competitive Advantages
Value Chain and Porters 5 ForcesReview
Internal to the Business
◦ Innovation◦ Streamlined production◦ Effective planning◦ Employee motivation◦ Rapid generation of solutions
to issues – tactical planning◦ Proficient development of
ideas and realization of those ideas –strategic planning
Business Complexity Factors
Internal to a
business is termed “Business Facing”
External to the Business
◦ Effective marketing and sales◦ Product development and
innovation◦ Service development◦ Quality manufacturing◦ Distribution processes◦ Billing processes◦ Order processing◦ Customer service
Business Complexity Factors
External to the
business is termed
“Customer Facing”
Think of DifferencesWhile there may be differences in technologies the company’s sell, what are some of the differences in technologies the company’s may use.
Technology used in a company are vastly different than technologies a company sells!
How are technologies used to better run a business?
Business Challenges and Solutions
Business Challenges
People
OrganizationTechnology
Business Solutions
a. Opportunities for new technology ariseb. You have powerful competitor
a. A new business strategy is developed
b. New products and services are selected
a. Creation or modification is done to:
a. Track strategyb. Manage new product
offerings
a. The strategy is implemented
b. Partnering with other vendors is achieved
a. Sales are increasedb. Better service is
provided
Business Challenges and Solutions
Business Challenges
People
OrganizationTechnology
Business Solutions
a. Opportunities for new technology ariseb. You have powerful competitor
a. A new business strategy is developed
b. New products and services are selected
a. Creation or modification is done to:
a. Track strategyb. Manage new product
offerings
a. The strategy is implemented
b. Partnering with other vendors is achieved
a. Sales are increasedb. Better service is
provided
Cycle starts over again
Business Challenges and Solutions
Business Challenges
People
OrganizationTechnology
Business Solutions
Business Challenges and Solutions
Now tie Porters 5 Forces
IntoBusiness Challenges
and Solutions
Overall Issue in any business, alignment of IT with business objectives
Identify and understand business goals and strategies
Break strategic goals into concrete activities and processes
Identify metrics for measuring progress – Key Performance Indicators (KPI’s)
Determine how IT can help achieve business goals
Be able to measure actual performance of the strategies
How to Align IT in a Business
Identify and understand business goals and strategies
Break strategic goals into concrete activities and processes
Identify metrics for measuring progress – Key Performance Indicators (KPI’s)
Determine how IT can help achieve business goals
Be able to measure actual performance of the strategies
How to Align IT in a Business
One Big Outcome: Lower
Cost
Information systems can be created to enable new products and services or improve existing products and services
Information systems can be created to enable new products and services or improve existing products and services
Product Differentiation
Information Systems and Market Focus
Analysis of customer buying habits
Record, track and report on customer preferences
Analysis of product profitability and cost of goods sold (COGS)
Project which products to sell and which ones not to sell
Information Systems and Market Focus
Analysis of customer buying habits
Record, track and report on customer preferences
Analysis of product profitability and cost of goods sold (COGS)
Project which products to sell and which ones not to sell
Market Direction and Focus
Impact of TechnologyHow has technology impacted business?Lets look at the internet in conjunction with the five forces.
•Widens market•Increases competitors•Reduces differences•Pressures competition on price
Existing Competitors
•Reduces barriers to entry•Provides technology for driving business process
New Entrants
•Facilitates creation of new products and services
Substitute Products and Services
•Bargaining power shifts to customer
Customers Bargaining Power
•Procurement over internet raises power over suppliers•Suppliers can benefit from reduced barriers to entry•Elimination of intermediaries
Suppliers Bargaining Power
Technology plays with business from all aspects. It can help and hurt a business. It can help and hurt a consumer. It can help and hurt a supplier. It can enhance and restrict market activity.
In other words, technology can be good or bad depending on how a business makes use of it.
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