CHAPTER 2

Organizational Strategy, Competitive Advantage, and

Information Systems

CHAPTER OUTLINE
2.1 Business Processes
2.2 Business Process Reengineering and
Management
2.3 Business Pressures, Organizational
Information Technology
Support

Business Process
Responses, and

CHAPTER OUTLINE (cont)

2.4
2.5

Competitive Advantage and Strategic

Business Information Technology

Information Systems
Alignment

LEARNING OBJECTIVES
1. Understand the concept of business processes, and provide examples of
business processes in the functional areas of an organization.
2.Differentiate between the terms business
process management.

process reengineering and business

3.List and provide examples of the three types of business pressures, and describe
one IT response to each.

LEARNING OBJECTIVES (continued)

4. Identify the five competitive forces described by Porter, and explain how the
Web impacts each one.
5.Describe the strategies that organizations typically adopt to counter the five
competitive forces and achieve competitive advantage.
6.Define business information technology alignment, and describe the
characteristics of effective alignment.

2.1 Business Processes

Business Process

Cross-Functional Business Processes

2.2 Business Process Reengineering and Business Process

Management
Business Process Reengineering

Business Process Management

2.3 Business Pressures, Organizational

Support

Business Pressures

Market Pressures
Technology Pressures
Societal Pressures

Responses, and IT

Market Pressures
The Global Economy and Strong Competition
The Changing Nature of the Workforce
Powerful Customers

The Stages of Globalization

(From Thomas Friedman in The World is Flat)

Globalization 1.0 (from 1492 to 1800)

Globalization 2.0 (from 1800 to 2000)
Globalization 3.0 (from 2000 to the present)

Thomas Friedmans Ten Flatteners

Fall of the Berlin Wall

Netscape goes public
Development of work-flow software
Uploading
Outsourcing
Offshoring
Supply Chaining
Insourcing
Informing
The Steroids

The Steroids

Computing
Instant messaging and file sharing
Voice over Internet Protocol
Videoconferencing
Computer graphics
Wireless technologies

Technology Pressures

Technological Innovation and Obsolescence

Information Overload

Societal/Political/Legal Pressures
Social Responsibility
Government Regulation and Deregulation
Protection Against Terrorist Attacks
Ethical Issues

Organizational Responses
Strategic Systems
Customer Focus
Make-to-Order and mass customization
E-business and E-commerce

2.4 Competitive Advantage and Strategic Information Systems

Competitive Advantage

Strategic Information Systems

Porters Competitive Forces Model

Porters Competitive Forces Model

Threat of entry of new competitors

Barriers to entry

Porters Competitive Forces Model

Bargaining power of suppliers

Bargaining power of buyers

Porters Competitive Forces Model

Threat of substitute products or services

Rivalry among firms in an industry

Porters Value Chain Model

Primary activities

Support activities

Strategies for Competitive Advantage

Cost Leadership
Differentiation
Innovation
Operational Effectiveness
Customer-orientation

Closing Case
The Problem

The Solution

The Results