Experiencing MIS 10th by m kronenke chapter 03

Q3-4 How does competitive strategy determine value chain structure?. Q3-6 How does competitive strategy determine business processes and the structure of information systems?. Strategy

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“We Can't Be Everything to Everybody.”

• Known for providing security monitoring.

• Current focus on security contracts.

• Mateo wants to focus on law enforcement

agencies, search & rescue, federal government.

• Good money in agricultural surveying, industrial

inspection, real estate videos, and wedding videos too.

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Study Questions

Q3-1 How does organizational strategy determine information

systems structure?

Q3-2 What five forces determine industry structure?

Q3-3 How does analysis of industry structure determine competitive

strategy?

Q3-4 How does competitive strategy determine value chain

structure?

Q3-5 How do business processes generate value?

Q3-6 How does competitive strategy determine business processes

and the structure of information systems?

Q3-7 How do information systems provide competitive advantages?

Q3-8 2027?

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Strategy Determines Information Systems

Figure 3-1 Organizational Strategy Determines Information Systems

Q3-1 How does organizational strategy determine information systems structure?

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Five Forces Determine Industry Structure

• Competitive Forces

– Competition from vendors who manufacture

substitutes.

– Competition from new competitors

– Competition from existing rivals.

• Bargaining Power Forces

– Bargaining power of suppliers.

– Bargaining power of customers.

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Use Five-forces Model to Identify Sources of Strong Competition

Figure 3-3 Examples of Five Forces

Force Example of Strong Force Example of Weak Force

Bargaining power of

customers

Toyota’s purchase of auto paint (because Toyota is a huge customer that will

purchase paint in large volume)

Your power over the procedures and policies of your university

Grain farmers in a surplus year (an oversupply makes the product less valuable and less profitable)

Threat of new

entrants Corner latte stand (because it is an easy business to replicate)

Professional football team (because the number of teams

is tightly controlled by the NFL)

Rivalry Used car dealers (because there are many to choose from) Google or Bing (expensive to develop and market a search

engine)

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Assessing the Five Forces at Falcon Security

Figure 3-4 Five Forces at Falcon Security

Force Falcon Security Example

Force Strength Falcon Security's Response

Offer differentiating services and enter other markets

Rivalry A new drone company expands its operations into the state Weak

Offer additional features like direct streaming video to the customer

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Porter's Four Generic Competitive

Strategies

Figure 3-5 Porter's Four Competitive Strategies

Q3-3 How does analysis of industry structure determine competitive strategy?

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The Lure of Love Bots

Ethics Guide

• The problem: 15 percent of the total subscribers

were female, while 85 percent were male

• “The key to maintaining subscribers on this type of

site is keeping them interested”

• To keep subscribers paying, “all we have to do is

send them some messages from a dummy

account”

• All interactions can be handled with AI bots

• Are the owner’s actions illegal? Unethical?

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Drone Manufacturer’s Value Chain

Figure 3-6 Drone Manufacturer's Value Chain

Q3-4 How does competitive strategy determine value chain structure?

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Task Descriptions for Primary Activities of the Value Chain

Figure 3-7 Task Descriptions for Primary Activities of the Value Chain

Source: Based on Michael E Porter, Competitive Advantage: Creating and Sustaining Superior Performance (The Free Press, a Division of Simon & Schuster Adult Publishing Group) Copyright © 1985, 1998 by Michael E Porter

Q3-4 How does competitive strategy determine value chain structure?

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Three Examples of Business Processes for

Material Ordering Process

Figure 3-8 Three Examples of Business Processes

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Improved Material Ordering Process Using Integrated Databases

Figure 3-9 Improved Material Ordering Process

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Low-Cost Rental Operations Value Chain

Figure 3-10 Operations Value Chains for Bicycle Rental Companies

Q3-6 How does competitive strategy determine business processes and the structure of information systems?

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High-Service Rental Value Chain

Figure 3-10 Operations Value Chains for Bicycle Rental Companies

Q3-6 How does competitive strategy determine business processes and the structure of information systems?

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Business Process and Information Systems for High-Service Bike Rental

Figure 3-11 Business Process and Information Systems for High-Service Bike Rental

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Principles of Competitive Advantage

Figure 3-12 Principles of Competitive Advantage

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The Autonomous Race

So What?

• Nearly all major automakers are investing in and

have already been testing their own self-driving

cars.

• Nearly 93 percent of crashes have been attributed

to operator error being the “definite or probable” cause.

• Identify some implications of driverless vehicles.

• What legal obstacles face producers of driverless

vehicles?

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The Autonomous Race (cont’d)

So What?

• What vulnerabilities could be exploited by

equipping self-driving vehicles with Internet

access?

• What are some logistical issues that could arise

from a delivery vehicle without a human operator?

• What impact will the widespread use of driverless

vehicles have on other industries related to the

automotive industry?

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Using IS to Create Competitive Advantages

• Enhances existing products.

• Differentiates products.

• Locks in customers.

• Raises barriers to market entry.

• Increases profit margins by decreasing costs and

decreasing errors.

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Using IS to Create Competitive Advantages (cont’d)

• Maintains customer account data

– IS collects information for ABC (adds value).

– IS saves customers time by automatically filling in

part of form (adds value for customer).

• Package & information delivery system

– IS helps customer to select delivery address and

generate shipping labels.

– What value does shipper get?

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Two Roles for Information Systems

Regarding Products

Figure 3-13 Two Roles for Information Systems Regarding Products

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Web Page to Select a Contact from the

Customer’s Records

Figure 3-14 ABC, Inc., Web Page to Select a Recipient from the Customer's Records

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ABC Web Page to Select a Contact from

Customer’s Records

Figure 3-15 ABC, Inc., Web Page to Select a Contact from the Customer's Records

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Web Page to Specify Email Notification

Figure 3-16 ABC, Inc., Web Page to Specify Email Notification

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Web Page to Print Shipping Label

Figure 3-17 ABC, Inc., Web Page to Print a Shipping Label

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Strategy and Information Systems in 2027

Q3-8 2027?

• Pace of change and integration of new technology

fast and increasing.

• Augmented reality devices, like Google Glass and

Microsoft's HoloLens, will change competitive

landscape.

• New businesses based on advances in self-driving

cars, drones, 3D printing.

• New products constructed in someone’s garage.

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Innovations by Technology Companies

Figure 3-18 Innovations by Technology Companies

Company Cap In Market

Billions

Search Smartphone AI Smartwatch AR/VR Drones Self-driving Car

Apple $539 iPhone (2007) (2011)Siri Apple Watch (2015) (dev.)? (dev.)?

Alphabet $480 Google (1998) Nexus (2013) (2012)Now Wear (os) (2014) & Magic Leap Daydream VR

(dev.)

Wing (dev.) Self-driving Car (dev.)

Microsoft $395 (2009)Bing Lumia (2011) Cortana (2014) (2014)Band Hololens (2016)

Faceboo

k $306

Facebook (2004)

FAIR (dev.)

Oculus Rift (2016)

Ascenta (dev.)

Samsung $162 Galaxy S (2010) (2012) S Voice Gear S2 (2013) Gear VR (2015)

Q3-8 2027?

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Hacking Smart Things

Security Guide

• Internet of Things (IoT)

– Internet-enabled devices.

– Outfitting every object with Internet access

hazardous, even dangerous, proposition.

• Unintended risks associated with incorporating this

capability into things.

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Internet of Threats

Security Guide

• What about securing data stored on

Internet-enabled smart devices?

– How to protect 10, 20, or 30 different

Internet-enabled devices in your home?

– Could hacker hijack webcam in your living room, or

actually hijack your car?

– What businesses and government agencies could

benefit?

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Internet of Threats (cont’d)

Security Guide

• What are some benefits or risks for businesses

adopting new Internet-enabled devices?

• How about supply chain, customer service? What

else?

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Director of Architecture

Career Guide

Gabe Chino in Financial Services

Q What attracted you to this field?

A “I have always been interested in how technology can enhance our lives After getting some exposure to programming in college, I was hooked I realize there is no end to innovation and creativity in this field, so I am never bored.”

Q What advice would you give to someone who is

considering working in your field?

A “My advice would be to always watch where the tech field is

going If this field is really for you, stay current with the latest IT trends.”

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Active Review

Q3-1 How does organizational strategy determine information

systems structure?

Q3-3 How does analysis of industry structure determine

competitive strategy?

Q3-4 How does competitive strategy determine value chain

structure?

Q3-6 How does competitive strategy determine business

processes and the structure of information systems?

Q3-7 How do information systems provide competitive

advantages?

Q3-8 2027?

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The Amazon of Innovation

Figure 3-19 Innovation at Amazon

Source: Data from Amazon.com: http://phx.corporate-ir.net/phoenix.zhtml?p=irolcorporateTimeline&c=176060, accessed April 2016

Case Study 3

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The Amazon of Innovation (cont'd)

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Fulfillment Fees for Regular-Sized Goods

for a Company Like Falcon Security

Case Study 3

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