Q7 – How do information systems provide competitive advantages? Q1 – How does organizational strategy determine information systems structure? Q2 – What five forces determine industry structure? Q3 – What is competitive strategy? Q4 – What is a value chain? Q5 – How do business processes generate value? Q6 – How does competitive strategy determine business processes and the structure of information systems? Q7 – How do information systems provide competitive advantages? © Pearson Prentice Hall 2009

Q7 – How Do Information Systems Provide Competitive Advantages? There are two ways businesses can respond to the five competitive forces. They can gain a competitive advantage via their products and services. Creating new products and services, or Enhancing its existing products or services, or Differentiating its products and services from its competitors Information systems can help create a competitive advantage by being part of the product or by providing support to the product. © Pearson Prentice Hall 2009

Q7 – How Do Information Systems Provide Competitive Advantages? A company can gain a competitive advantage by using business processes to Lock in customers via high switching costs, making it too expensive for the customer to switch to a competitor. Lock in suppliers via easy-to-use connections, discouraging them from changing to another business. Create entry barriers for new competitors, thereby raising the costs to enter the market. Establish alliances with other organizations and set standards, reducing purchase costs and providing benefits for everyone. Reduce costs which in turn reduces prices and increases profitability. © Pearson Prentice Hall 2009

Q7 – How Do Information Systems Provide Competitive Advantages? ABC, Inc, an actual company, used information systems to create a competitive advantages by Investing heavily in information technology from the beginning and Leading the shipping industry in application of information systems. The following slide shows some of the Web pages ABC, Inc uses within its information system. © Pearson Prentice Hall 2009

Q7 – How Do Information Systems Provide Competitive Advantages? Fig3-13 ABC, Inc Web Page to Select recipient from customer records © Pearson Prentice Hall 2009

Q7 – How Do Information Systems Provide Competitive Advantages? Fig 3-14 ABC, Inc Web page to select contact from customer records © Pearson Prentice Hall 2009

Q7 – How Do Information Systems Provide Competitive Advantages? Fig 3-15 ABC, Inc Web page to specify email notification © Pearson Prentice Hall 2009