How do information systems apply to competitive strategies for nonprofit organizations?
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2 Learning objectives 1. Five forces 2. Other factors 3. Value chain 4. Business strategy 5.
Nonprofit/government strategy 6. Role of IS After studying this chapter, you will be able to do the following: 1. Describe Porter’s five competitive forces that shape industry competition. 2. Explain how disruptive innovations, government policies, complementary products and services, and other factors affect how the competitive forces operate. 3. Identify the components of the value chain and explain its extended version. 4.
Describe how information systems apply to competitive strategies for business. 5. Explain how information systems apply to strategy for nonprofit organizations and governments. 6. Explain why the role of information systems in organizations has shifted, depending on whether the systems are deployed to run, grow, or transform the business. Copyright © 2015 Pearson Education, Inc.
3 Baidu Chinese visitors Chinese language Competition
4 Introduction Strategies rely on IS IS transform industries 5 Five forces New entrants Buyers Suppliers Substitutes Rivalry
6 Threat of new entrants Incumbents and IS Network effects
7 Power of buyers Few buyers Similar products IS shift buyer power
8 Power of suppliers Only game in town IS impose switching costs
9 Threat of substitutes Alternative products at attractive savings 10
Rivalry among competitors 11 External factors Disruptive innovations Government policies 12 Disruptive innovations 13 Government policies Affect how industries operate and evolve 14 Complementary services 15 Environmental events Major effects without warning 16 Value chain Primary activities Support activities 17 Extended value chain Includes suppliers and customers 18 Benchmarking
Reference point used as baseline
19 IT benchmarks IT spending varies by industry and by region 20 Competitive strategies 21
Low cost leadership Similar product at lower price 22 Differentiation and focus
23 IS in strategy Low cost Differentiation Automate Support back office
24 Run, grow, and transform 66% of IT spending to run organization
25 Nonprofit organizations 26 Fund-raising IS help manage donations Reach worldwide audience 27 Volunteering Attract volunteers 28 Government (1:2) Needs IS to handle operational requirements 29
Government (2:2) E-Government Research
30 Does IT matter? Advantage depends on type of IS
31 Summary 1. Five forces 2. Other factors 3. Value chain 4. Business strategy 5. Nonprofit/government strategy 6. Role of
IS The five forces that shape an industry’s competitive structure, and help determine how profitable companies operating in the industry include (1) the threat of new entrants, (2) the power of buyers, (3) the power of suppliers, (4) the threat of substitute products, and (5) rivalry among competitors. In addition to the strategies of the companies themselves, many external factors affect how the five forces operate. Disruptive innovations can transform entire
industries through the process of creative destruction. Government policies can also affect industry competition through legislation, regulation, and court decisions. Industries that operate in a larger ecosystem are affected by the development of complementary products and services that accelerate trends. Environmental events such as pandemics or earthquakes can reshape industries and call for changes in strategy. Organizations can use the value chain model to understand their
options as they strive to compete in an industry. Primary activities (bringing in raw resources, making the product, marketing, delivery, and customer support) and support activities form the major components of the value chain. The extended value chain, which includes suppliers and customers, offers more strategic opportunities. Benchmarks are used to compare a company’s performance to industry standards on components of the value chain. Competitive strategies include low cost
leadership, product differentiation, and a focused strategy for a particular market niche. Information systems support all these approaches by reducing costs, streamlining processes, and adding unique value with new products or features. Their role includes running the organization and, as a strategic enabler, growing and transforming the organization. Nonprofits take advantage of information systems to manage basic operations, and also as a strategic enabler in areas such as
fund-raising and volunteer management. Governments use information systems extensively for e-government initiatives, especially to increase access and enhance services for the public. As technologies become commodities, and become widely used by almost all organizations, their strategic value diminishes. The information systems used to “run” organizations are readily available and managers should focus on reducing their cost. Innovative information systems in which creative people
leverage technology to grow and transform the organization are critical for effective strategy. Copyright © 2015 Pearson Education, Inc. 32 GameStop case study GameStop business model Rivalry among
competitors
33 Open Internet case study 34 Chapter How are information systems apply to competitive strategies for business?Information systems aid companies in competing with other competitors by maintaining low costs, differentiating products or services, focusing on market niche, strengthening ties with customers and suppliers, and increasing market entry high competition.
How strategic information systems can contribute to the competitiveness of Organisations?A strategic information system helps an organization gain a competitive advantage through its contribution to the strategic goals of an organization and/or its ability to significantly increase performance and productivity.
What are competitive strategies in information systems?The five competitive strategies are: cost leadership, differentiation, innovation, growth, and alliance.
How can information itself provide a competitive advantage to an organization?How information gives companies a competitive advantage. Better consumer insights. Suppliers can use data to predict that sales will increase during certain times of the year and increase production or order accordingly. ... . Increase productivity. ... . Sales forecasting. ... . Using business data.. |