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Lecture 5A Strategy

Introduction to IT and Strategy

  • Overview of the lecture by Dr. Abhijit Sengupta at the University of Surrey.

  • Discusses the strategic benefits of IT/IS in organizations.

Importance of IT/IS in Business Strategy

  • Strategic Benefits of Systems:

    • Enhance business vision and strategy.

    • Foster interaction with economic trends over time.

Strategy Definitions and Concepts

  • Definition of Strategy:

    • Long-term direction and scope of an organization.

    • Achieves competitive advantage through resource configuration adapting to changing environments (Johnson and Scholes, 2006).

Characteristics of Strategy

  • Can be either planned or emergent.

  • Successful organizations focus on a coherent strategic approach.

Implications of Lacking an IT Strategy

  • Consequences of no IT Strategy include:

    • Missed sales opportunities and inefficiencies in purchasing.

    • Lagging behind competitors in online services.

    • Deterioration in customer experience due to poorly integrated channels.

Planned vs. Emergent Strategies

  • Examples of Strategies in Action:

    • Apple's PDA: Initial development focused on complementing existing technology.

    • Google: Emphasizes fast-cycle experimentation and adaptability.

  • Emergent strategies arise from learning and adapting in uncertain conditions; planned strategies solidify once successful paths become clear.

Information Systems as Competitive Advantage

  • Role of Information Systems:

    • Promote synergies and core competencies within business units.

    • Enhance performance through effective resource integration.

Porter’s Five-Force Model of Industry Structure

  • Key Forces Influencing Competition:

    • Threat of substitutes

    • Bargaining power of customers

    • Supplier power

    • Rivalry among existing competitors

    • Threat of new entrants

Internet's Influence on Industry Structure

  • Positive Aspects:

    • Increased market efficiency.

    • Expanded market size.

  • Negative Aspects:

    • Rising substitution threats due to new web-based approaches.

    • Intense price competition impacting profitability.

Generic Strategies Framework

  • Cost Leadership and Differentiation Strategies:

    • Options available include broad market focus or niche market focus.

    • Aim to build strong customer and supplier relationships.

Value Chain Analysis

  • Key Components of Value Chain:

    • Inbound logistics, operations, outbound logistics, marketing, and service.

    • Each component enhances profitability and efficiency.

  • Role of IT in Value Chain:

    • Automation in scheduling, procurement, and customer relationship management.

    • Enhanced quality control and operations through technology.

Conclusion

  • The integration of information technology in strategic planning is crucial for competitive advantage and organizational success.

  • Businesses must adapt their strategies based on IT capabilities and market dynamics.