Value Chain Analysis and

Strategic Information
Systems Framework
Value Chain Analysis
 Porter’s Value Chain
Analysis Model

• Primary activities
• Support activities
 Porter’s Value Chain Analysis
Model - Primary Activities

• Inbound logistics
• Operations
• Outbound logistics
• Marketing / sales
• Service
 Porter’s Value Chain Analysis
Model - Support Activities

• Firm infrastructure
• Human resource management
• Technology department
• Procurement
 Strategic Information
Systems Frameworks

• Porter and Millar’s framework

• Wiseman and MacMillan framework
• Bakos and Treacy framework
• Customer resource life cycle framework
 Porter and Millar
Framework

• Industry structure has changed

• Rules of competition have changed
• Organizations have outperformed
competition using IT
 Porter and Millar
Five-Step Process
• Access information intensity
• Determine the role of IT in the industry
structure
• Identify and rank the ways in which IT
can create competitive advantage
• Investigate how IT might spawn new
businesses
• Develop a plan for taking advantage of
IT
 Wiseman and MacMillan
Framework
• Based on Porter’s strategies
• Innovation
• Growth
• Alliance
• Time
 Bakos and Treacy
Framework
• Bargaining power and comparative
efficiency
• Search related costs
• Unique product features
• Switching costs
• Internal efficiency
• Interorganizational efficiency
 Customer Resource Life
Cycle Framework
• Ives and Learmouth, 1984
• Customer relationship key to strategic
advantage?
• Thirteen fundamental stages of the
customer relationship
 Framework for Global
Competition
• Apply IT through global business drivers
• Quality
• Risk reduction
• Suppliers
 Strategic Information
Systems Applications
• Cost leadership
• Differentiation
• Growth
• Alliances
• Innovation
• Improve internal efficiency
• Customer-oriented approaches
 Strategic Information
Systems Applications
• Florida Power and Light - computerized
TQM
• Geisinger - intranet
• J.C. Penny - custom made suits
• MacGregor - EDI
• Otis: IT used to block competitors
 Strategic Information
Systems Applications
• Port of Singapore: intelligent systems
• Volvo: global network
• Baxter International: IT for the customer
• Merril Lynch: cash management accounts
system
• American Airlines: reservation system
 Strategic Information
Systems Applications
• Odense Shipyard: CAD
• Dun and Bradstreet: credit evaluation
• National Car Rental: car pickup
 Sustaining A Strategic
Advantage
• Inward systems: efficient, effective
• Comprehensive, innovative and expensive
system: difficult to duplicate
 Managerial Issues
• Implementing strategic information
systems can be risky
• Strategic information systems require
planning
• Sustaining competitive advantage is
challenging
• Ethical issues