Recording-2025-2/5/25 MIS Session 3 Strategy & Information Systems

Business Strategy Overview

• Definition of Strategy: A strategy is a plan of action designed to achieve a specific goal or set of goals.

• Difference Between Strategy and Goal:

  • Goals are the desired outcomes (e.g., getting an A in a class).

  • Strategy is the plan to reach those goals (e.g., study habits, resources).

Characteristics of Business Strategy

• Time Frame: Typically covers one year.

• Specific and Measurable Targets: Strategies involve defining specific targets for different parts of the organization.

  • Each department (HR, marketing, logistics) has its own targets that align with overall business goals.

• Coordination: All parts of the organization must move in the same direction to achieve these targets.

Key Aspects of Developing a Strategy

1. Purpose: Strategies must have a clear purpose, including an updated vision and mission.

   • Vision: Long-term goals for the business.

   • Mission: Outline of how those goals will be achieved.

2. Measurable Targets: Targets must be quantifiable and clear to ensure they can be effectively measured.

   • Example of a vague target: "Establish better relationships with suppliers." This needs to be defined specifically.

Importance of SMART Goals

• SMART Criteria: For goals to be effective, they should be:

  • Specific: Clearly defined.

  • Measurable: Have criteria to measure progress.

  • Assignable: Clearly designate responsibility for achieving the goals.

  • Realistic: Set achievable goals based on available resources and constraints.

  • Time-bound: Include a timeline for achieving the goals (e.g., lose a certain amount of weight by a specific date).

Competitive Analysis and Planning

Key Considerations for Strategy Development:

1. Competitors' Position: Understanding where competitors currently stand.

2. Market Vision: Identifying the markets in which the company will operate in five years.

3. Information Leadership: Deciding whether to lead or follow competitors regarding information management.

Tools for Strategy Analysis

• SWOT Analysis: Evaluates Strengths, Weaknesses, Opportunities, and Threats.

• Porter's Five Forces Model: Assesses industry attractiveness by examining:

  • Buyer power

  • Supplier power

  • Competitive rivalry

  • Threat of substitute products

  • Threat of new entrants

Competitive Advantage

• Definition: Characteristics that allow a company to outperform competitors.

• First Mover Advantage: The advantage gained by the first significant occupant of a market, exemplified by companies like Apple with their innovative products.

  • However, competitive advantages can be temporary as competitors can replicate successful strategies.

Generic Competitive Strategies (Porter's model):

1. Cost Leadership: Becoming the low-cost producer in the industry (e.g., Walmart).

2. Differentiation: Offering unique products or services that command a premium price (e.g., luxury brands).

3. Focus Strategy: Targeting a specific market niche with specialized products or services.