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Unformatted text preview: MGCR 331 – Information Systems (“IT Impacts on Organizations”) Technology and Strategy – Lecture Note 2 LEARNING OBJECTIVES 1. Describe Porter’s competitive forces model and value chain model and explain how IT helps companies improve their competitive positions 2. Describe strategies that companies can use to achieve competitive advantages in their industries 3. Identify how IT can be employed to support cost leadership and differentiation strategy 4. Understand the implications of Operational Effectiveness (cost leadership) versus Strategic Positioning (differentiation) Strategy 5. Understand the characteristics of resources that may yield competitive advantage using resource based view (RBV) of competitive advantage 6. Identify powerful resources that may provide competitive advantage NOTE: This lecture note is primarily a reproduction of the “technology and strategy” chapter from Professor John Gallaugher’s ( [email protected] ) forthcoming book “Information Systems: A Manager’s Guide to Harnessing Technology. Summary Firms are said to have a competitive advantage when they are able to gain superior returns to investment, compared to their industry rivals. Business executives are continuously engaged in identifying new strategies that will provide competitive advantage in diverse market conditions. Since strategies are many times serendipitous, there is no systematic way of out-maneuvering an organization’s rival. Any response that an organization can take to market conditions could provide competitive advantage to the firm. In this lecture note, we consider information systems as a weapon that could provide this competitive advantage. We will discuss the most important frameworks in strategy - competitive forces model and the value chain model. Following this, we will discuss strategies to achieve competitive advantage and how IT can support such strategies. We will, then discuss the resource based view and resources that provide competitive advantage. INTRODUCTION Managers are confused, and for good reason. Management theorists, consultants, and practitioners often vehemently disagree on how firms should craft tech-enabled strategy, and many widely read articles contradict one another. Headlines such as "Move First or Die" compete with "The First Mover Disadvantage." A leading former CEO advices "destroy your business,” while others suggest that firms should focus on their "core competency" and "return to basics." The pages of the Harvard Business Review declared “IT Doesn’t Matter”, while a New York Times’ bestseller hails technology as the "steroids" of modern business. Theorists claiming to have mastered the secrets of strategic management are contentious and confusing. But as a manager, the ability to size up a firm's strategic position and to understand its 1 likelihood of sustainability is one of the most valuable, yet difficult skills to master. Layer on thinking about technology – a key enabler to nearly every modern business strategy, but also a...
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- Fall '10
- Strategic positioning, FreshDirect