ch03-Case Study

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Dr. Chen, Management Information Systems 1

Chapter 3Information Systems for

Competitive Advantage

- Case & Exercise

Jason C. H. Chen,Ph.D.

Professor of MIS

School of Business

Gonzaga University

Spokane, WA 99258 USA

[email protected]


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In-Class-Exercise (p.99-100)

(UYK - 4&5) 4. Consider the two different bike rentalcompanies in Figure 3-10. Think about the

bikes that they rent. Clearly, the student

bikes will be just about anything that can beridden out of the shop. The bikes for the

business executives, on the other hand, must

be new, shiny, clean, and in tip-top shape.


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#4-a) Compare and contrast the operations value chains of

these two businesses as they pertain to management of

bicycles.

In the low-cost student rental business, used bicycles are acquired

as cheaply as possible (e.g., garage sales, campus and community

police unclaimed bicycle auctions, classified ads, etc.). Minimal

care and maintenance is provided, such as tire repair, lubrication,and brake and gear adjustment. If anything significant is damaged

on the bicycle, it is disposed of at the landfill.

In the high-service rental business, new bicycles are purchased

from known, quality bicycle manufacturers. An array of types,

models, and sizes will be acquired to satisfy a range of bicyclepreferences. Maintenance will be meticulous so that every bicycle

is well-tuned prior to each rental. When a bicycle gets to the end of

its service life, possibly after a year or two of use, it is sold because

it will still have a good market value.


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#4b) Describe a business process for maintaining bicycles for

both businesses.

In the low-cost student rental business, maintenance is

performed only in response to a customer complaint.

Otherwise, the bicycle is assumed to be OK. In the high-service

rental business,a maintenance checklist is performed after each

bicycle is returned from a rental before it is released to be

rented again.

#4c) Describe a business process for acquir ing bicycles for

both businesses.

In the low-cost student rental business, cheap bicycle sourcesare utilized (e.g., garage sales, campus and community police

unclaimed bicycle auctions, classified ads, etc.). In the high-

service rental business, the latest models are purchased from

the most well-known bicycle manufacturers.


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#4d) Describe a business process for disposing of

bicycles for both businesses.

In the low-cost student rental business, bicycles

are used until they break down completely.Disposal involves taking them to the landfill.

In the high-service rental business, the bicycles

will have a lot of market value and so disposal will

involve reselling them, perhaps using eBay to getthe best possible price for the bicycle.


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#4e) What roles do you see for information systems in

your answers to the earl ier questions? The informationsystems can be those you develop within your company

or they can be those developed by others, such as

Craigs List.

The information system for the low-cost student rental

business will be quite simple, perhaps an index card for

each bicycle in inventory.

The information system for the high-service rentalbusinesscould be more sophisticated, with complete

information on each bicycles acquisition and maintenance

records.


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5. Samantha Green owns and operates Twigs Tree Trimming

Service. Samantha graduated from the forestry program of a

nearby university and worked for a large landscape design

firm, performing tree trimming and removal. After several

years of experience, she bought her own truck, stump grinder,

and other equipment and opened her own business in St. Louis,

Missouri.

Although many of her jobs are one-time operations to remove a

tree or stump, others are recurring, such as trimming a tree or

groups of trees every year or every other year. When business

is slow, she calls former clients to remind them of her services

and of the need to trim their trees on a regular basis. Samantha has never heard of Michael Porter or any of his

theories. She operates her business by the seat of her pants.


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#5a) Explain how an analysis of the five competi tive

forces could help Samantha.

By looking at the five competitive forces, Samantha can

better understand how to achieve a profitable performance

in her industry. In this situation, the bargaining power ofcustomers may be relatively strong with the ability to

select another tree service based on price and

responsiveness. Customers will not perceive differences in

quality when removing a tree, other than judging response

time and the thoroughness of cleanup. With tree trimming

for tree maintenance, quality work will be harder for

customers to appreciate. Samantha will have to sell her

training and experience.


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#5a) cont. The threat of substitution is a fairly weak force

with few alternatives available to customers who have a dead

or damaged tree that needs removing. There is, however, the

option of doing nothing in terms of tree maintenance.

Samantha needs to emphasize the benefits of performing

regular tree trimming for long-term tree health.

The bargaining power of suppliers of equipment is a weak

force with many options available for machinery and

equipment. The threat of new entrants is somewhat strong

since anyone with a ladder, saw, and no fear of heights could

sell him/herself as a tree trimmer. Samantha will have to sell

her training and expertise. Finally, rivalry among existingfirms is probably strong. Samantha will have to work to make

her companys name well known, sell her professional

knowledge and training, be responsive and keep her prices

competitive.


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#5b) Do you think Samantha has a competi tive strategy?

What competi tive strategy would seem to make sense forher?

Samantha probably has not thought about a competitive

strategy. Many small business owners have not stepped backfrom the hectic pace of just keeping the business going to

consider this issue. For Samantha, given her forestry

education, a differentiation strategy with a focus on the tree

health and maintenance industry segment may make sense.

Her education will clearly distinguish her from many others in

the field, and she should be able to capitalize on that with

residential and commercial properties requiring regular tree

maintenance.


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CASE STUDY 3

Bosu Balance Trainer(p.101-102)

Case Study 3: BOSU balance trainer (p.101-

102)

(1,2,3, 6,7)

Case Study 3: BOSU balance trainer
http://media.pearsoncmg.com/ph/bp/bp_akamai/mymislab/DMK2_3-4.htmlhttp://media.pearsoncmg.com/ph/bp/bp_akamai/mymislab/DMK2_3-4.html


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BOSU Case Study

What information systems can Bosu

develop to createbarriersto entry to the

competition?

What information system can Bosu

develop to lock in customers?

What information systems can Bosu

develop to establish alliances?


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(Video)1. Analyze the five competitive forces for Bosusmarket.

2. Visit www.bosu.com. What appears to be Bosuscompetitive

strategy? Explain your answer.

3. Explain the nature of the five primary value chain activities for Bosu.

4. Review the principles of competitive advantage in Figure 3-8. What

information systems can Bosu create to enhance its product or

differentiate it from existing and emerging competition?

5. What information systems can Bosu develop to create barriers to

entry to the competition?

6. What information systems can Bosu develop to lock in customers?

7. What information systems can Bosu develop to establish alliances?

Bosu Balance Trainer Case Study

16
http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%204-Case%20Study:%20BOSU%20Balance%20Trainer&clip=pandc/kroenke/Ch_03_4.flvhttp://www.bosu.com/http://www.bosu.com/http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%204-Case%20Study:%20BOSU%20Balance%20Trainer&clip=pandc/kroenke/Ch_03_4.flv


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Summary on Principles of Competitive Advantage:

Two Ways to Respond to the Five Competitive Forces (cont.)

A. Product Implementation

1. Create a new product or service

2. Enhance products or services

3. Differentiate products or services

B. System Implementation(Business Process)

4. Lock in customers and buyers

5. Lock in suppliers

6. Raise barriers to market entry

7. Establish alliance

8. Reduce costs

Figure 3-12: Principles of Competitive Advantage


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1. Review the principles of competitive advantage in Figure 3-

12. Which types of competitive advantage has Bosu used to

defeat copycat products?

Bosu has successfully used the principles of (2)product

enhancement, (4) customer lock-in, (6) raising entry barriers,

and (7) alliancesto defeat copycat products

2. What role did information systems play in your answer to

question 1?

Information systems were very important. The databaseof

trainer data was used extensively to help create and maintainthe close relationship Fitness Quest desired with their trainers.


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7. Describe information systems that FitnessQuest could use to

strengthen its strategy for bringing IndoRow to market.

Consider the factors you identified in your answer to question 6in your response.

Fitness Quest should focus initially on information systems that

help communicate with and supportits trainers who are

interested in creating IndoRow classes. Trainers could registerfor email-based newsletters. Trainers could participate in chat

groups about how they like and use their IndoRow machines.

Fitness instructors could share ideas about IndoRow-based

classes in forums. Trainers could provide feedback on the

devices that could lead to product enhancements or extensions of

the product line. Referral rewards could be provided to trainers

who sign up their colleagues

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ch03-Case Study