1. Competitive Advantage
Chapter 2
STRATEGIC AND COMPETITIVE OPPORTUNITIES
Using IT for Competitive Advantage
Competitive Advantage
Providing a product or service in a way that customers value more than what the competition is able to do.

2. Its not the IT, it’s the People
In perspective (do not be fooled) …
Its not the IT, it’s the People
It is not the information technology that gives a company the competitive advantage; it is the way people use the technology that makes the difference.

3. … Main Chapter Menu… Competitive Advantage Examples
FedEx
Schwabs
Dell
Cisco
Developing A Strategy For The Internet Age
The five forces model
The three generic strategies
The value chain
Key E-Commerce Strategies
Mass customization
Disintermediation
Global reach
The U.S. Airline Industry I

4. Competitive Advantage Examples Federal Express
23 159 867 632  
Competitive Advantage Examples Federal Express
FedEx Package Tracking Screen
fedex message

5. Competitive Advantage Examples Charles Schwab

6. Competitive Advantage Examples Dell Computer
Sell ----source -----ship
Buy ---hold--- sell

7. Competitive Advantage Examples Dell Computer
Information partnership - lets two or more companies cooperate by integrating their IT systems.

8. Competitive Advantage Examples Cisco Systems
Cisco Systems - a leader in utilizing the direct sell model over the Internet.
Business to Business (B2B) - companies whose customers are primarily other businesses.
Business to Consumer (B2C) -companies whose customers are primarily individuals.

9. Developing A Strategy For The Internet Age
Porter’s three frameworks are:
The Five Forces model
The Three Generic Strategies
The Value Chain

10. Developing A Strategy For The Internet Age The Five Forces Model
Video: porter

11. Developing A Strategy For The Internet Age Using the Five Forces Model
Buyer power
Giving choices to the buyer
For example: hotel chains
Give points
Other loyalty programs
Cash the points for free hotel stays at one of their resort hotels
Such programs have the effect of increasing the likelihood that a traveler will stay at a single chain.

12. Developing A Strategy For The Internet Age Using the Five Forces Model
Supplier power
The objective is to ___________ supplier power.
B2B marketplace - an Internet-based service which brings together many buyers and sellers.
Find a way to put more information into the buyer’s hands

13. Developing A Strategy For The Internet Age Using the Five Forces Model
Threat of substitute products or services
Consider the introduction of alternative IT products such as income tax preparation software.
Consumers now use it.
Accountant has less clients.
Accountant livelihood is threatened.

14. Developing A Strategy For The Internet Age Using the Five Forces Model
Threat of new entrants
Entry barrier - a product or service feature that customers have come to expect from companies in a particular industry.
A good example is what banks did:
Introduce the bank card and as many ATMs around the world as possible.
Banking on the internet to pay bills, transfer funds and print reports.

15. Developing A Strategy For The Internet Age Using the Five Forces Model
Rivalry among existing competitors
Using IT systems to be more ___________ and compete more strongly with others.
An example would be PRICE.
Computer systems can be bought from two different stores but one is cheaper than the other.
This is possible when one company uses IT in such a way to reduce its price.

16. Developing A Strategy For The Internet Age The Three Generic Strategies
Figure 2.5
The Three Generic Strategies page 52

17. Developing A Strategy For The Internet Age The Value Chain
Once you understand how IT can help you develop business strategy, you can ensure that IT supports all important business ___________ .

18. Developing A Strategy For The Internet Age The Value Chain
The Components of a Value Chain

19. Manufacturing Value Chain
Where has information system added value in the value chain?

20. Key E-Commerce Strategies
Three capabilities made possible by the Internet are could help firms gain competitive advantage:
Mass ___________ and ___________
___________
Global reach

21. Key E-Commerce Strategies Mass Customization and Personalization
___________ - a business gives its customers the opportunity to tailor its product or service to the customer’s specifications.
___________ - a Web site can know enough about your likes and dislikes that it can fashion offers that are more likely to appeal to you.
___________ - a method of placing you in an affinity group of people with the same characteristics.

22. Key E-Commerce Strategies Disintermediation
Disintermediation – using the Internet as a delivery vehicle, intermediate players in a distribution channel can be bypassed.
Disintermediation – using the Internet as a delivery vehicle, intermediate players in a distribution channel can be bypassed.

23. Key E-Commerce Strategies Global Reach
___________ - the ability to extend a company’s reach to customers anywhere there is an Internet connection, and at a much lower cost.
___________ - when you have given a merchant your permission to send you special offers.

24. The U.S. Airline Industry Airline Reservation Systems
Reservations systems
Frequent flyer programs
Yield management systems
Disintermediating the Travel Agent
Show porter video

25. Chips system from earlier
What kinds of information systems could be beneficial? Why?
What kinds of information products would be helpful? Why?