Business Strategy and Digital Technology
Chapter 2
Learning Objectives
Describing strategy and its development
Describing Porter’s Model of Competitive Strategy
Listing and describing competitive strategies
Describing the Value Chain model and its impact
Describing technology strategies
Concepts of Strategy and the use of Digital Technology Resources
Mission – defines the purpose of the enterprise and states its goals
Strategy – is a game plan for success.
Strategy follows from the mission and is the best way to achieve the objectives
Strategy is a must for a business, big or small, and creates competitive advantage and a chance to win
Information Technology and Strategy
Information technology is usually auxiliary or a support to the main strategy
Investment in information technology can be important to the business strategy
Strategy Development
First step is to have a clear concept of mission
Strategy is developed by a SWOT analysis
SWOT
Strengths – make use of strengths
Weaknesses – avoid weaknesses
Opportunities – take advantage of opportunities
Threats – beware of and guard against threats
Porter’s Five Forces Model
Competitive Business Strategies
Differentiation Strategy – differentiate product by quality, performance, features. Etc.
Cost Leadership Strategy – offer at low or competitive cost
Response Strategy – respond to market demand, e.g. rapid response, accurate response, customize, etc.
Porter’s Value Chain Model
Direct or Inline – directly in the line of conversion of inputs to outputs
Indirect or Auxiliary – supporting the conversion
Value Chain business Functions
Inbound Logistics for the acquisition, delivery, and receiving of materials and other inputs.
Operations which constitutes the main transformation including manufacturing and/or the production of goods and services.
Outbound Logistics which includes the packaging, storage, delivery, and distribution, of goods and services as needed by the nature of the product.
Marketing and sales to customers both enterprise and individual
Services including all support services such as customer service
Value Added Profit
Technology Initiatives and Strategy
Package Shipping
Printed label with tracking number facilitates computerized scheduling and logistics planning
Airline
Electronic ticket and electronic boarding pass enables real-time passenger and flight tracking
Manufacturing
ERP systems integrate manufacturing and supply chain activities. ERP manages material ordering and payments and electronic systems provide real-time tracking of shipments