Using Management Information Systems - ….ppt

? 2007 Prentice Hall, Inc. David Kroenke Q1 – How does organizational strategy determine information systems structure? An organization’s goals and objectives are determined by its competitive strategy. In turn, an organization’s competitive strategy determines every information system’s Structures Features Functions Q2 – What Five Forces Determine Industry Structure? You can use Porter’s Five Forces Model to assess an industry structure based on these five questions: How much bargaining power do customers have? How much of a threat do substitution products or services pose? How much bargaining power do suppliers have? How great is the threat of new competitors entering the marketplace? How great is the rivalry among existing firms? The intensity of each force determines the characteristics of the industry, how profitable it is, and how sustainable that profitability will be. An organization develops its competitive strategy based on how it intends to respond to these forces. Q2 – What Five Forces Determine Industry Structure? Fig 3-2 Porter’s Five Forces Model of Industry Structure Q2 – What Five Forces Determine Industry Structure? Fig 3-3 Examples of Five Forces Q3 – What is Competitive Strategy A company can choose one of four competitive strategies to help it respond to the structure of its industry. Be the cost leader across its industry – Wal-Mart is the lowest cost leader in the retail industry. Differentiate its products from others across its industry – Apple Computer competes on how much better its computers are than PCs. Be the cost leader in an industry segment – Southwest Airlines is the cost leader in certain portions of the airline industry. Differentiate its product in an industry segment – Apple’s iPhone competes by being different than other cell phones. Q3 – What is Competitive Strategy Fig 3-4 Porter’s Four Competitive Strategies Q4 – What is a Value Chain? Each competitive strategy requires a system whose benefits outweigh the risks and