9781423901785_PPT_ch02

9781423901785_PPT_ch02 - Management Information Systems,...

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Management Information Systems, Sixth Edition Chapter 2 Strategic Uses of Information Systems
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Objectives Explain what business strategy and strategic moves are Illustrate how information systems can give businesses a competitive advantage Identify basic initiatives for gaining a competitive advantage Explain what makes an information system a strategic information system Management Information Systems, Sixth Edition 2
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Management Information Systems, Sixth Edition 3 Objectives (continued) Identify fundamental requirements for developing strategic information systems Explain circumstances and initiatives that make one IT strategy succeed and another fail
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Management Information Systems, Sixth Edition 4 Strategy and Strategic Moves Strategy : framework, or approach, to obtaining an advantageous position Business strategy : a plan to help an organization outperform its competitors Often done by creating new opportunities, not beating rivals Information system may be built to solve a problem or to seize an opportunity
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Strategy and Strategic Moves (continued) Strategic information system (SIS) : an information system that helps seize opportunities Strategic advantage : using strategy to maximize company strengths Competitive advantage : having maximized an organization’s strengths to beat its rivals Using the Web strategically can be advantageous Simply extending business to the Web is no longer a strategic advantage Management Information Systems, Sixth Edition 5
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Management Information Systems, Sixth Edition 6 Achieving a Competitive Advantage Competitive advantage is achieved when a for- profit company increases its profits significantly, usually through increased market share Many initiatives can be used to gain competitive advantage Strategic moves often combine two or more initiatives The essence of strategy is innovation
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Management Information Systems, Sixth Edition 7 Achieving a Competitive Advantage (continued)
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Management Information Systems, Sixth Edition 8 Achieving a Competitive Advantage (continued)
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Management Information Systems, Sixth Edition 9 Initiative #1: Reduce Costs Customers want to pay as little as possible for products or services Reduce costs to lower price Automation greatly reduces manufacturing costs Web can automate customer service activities Companies that are first to adopt advanced systems that reduce labor enjoy competitive advantage until their rivals do likewise
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Management Information Systems, Sixth Edition 10 Initiative #2: Raise Barriers to Market Entrants Less competition is better for company Gain competitive advantage by making it difficult or impossible for others to produce the same product or service To lower competition, raise barriers to entrants Obtain legal protection of intellectual property (copyrights and patents on inventions, techniques, and services) Examples: Amazon’s one-click, Priceline’s reverse auction
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9781423901785_PPT_ch02 - Management Information Systems,...

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