Topic outline
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Organizations have been using information technology for the past 50-plus years. Billions of dollars have been spent on computer hardware, software, network communications, and all the other requirements of having world-class technology. But to what end? Has the money spent on technology allowed businesses to become more profitable? Or more specifically: has the implementation of information technology led to a sustainable competitive advantage?
This unit will start by answering the question: What is information technology? For that matter, what exactly is technology? For our purposes here, technology is considered any electronic or digital tool used by people to make a process easier or more efficient. You can also think of technology as the science of creating or using technical objects in order to reach industrial goals, which certainly applies to how businesses use technology to achieve productivity. We tend to think of technology mostly in terms of electronic innovation. Information technology is defined as those digital or electronic tools that are designed to make the process of managing or distribution of information easier.
You will then study the history of IT and how it fits into business strategy today. Specifically, you will review concepts from other courses, such as the value chain and Porter's Five Forces of Competitive Advantage. You will look at how IT fits into these topics and other key concepts related to strategy.
This unit will end with a focus on the relationship between IT and competitive advantage, which will set the foundation for the rest of the course. Is it possible for IT to bring competitive advantage? Many argue that YES, it can! As a student of information systems, it is highly important that you can articulate both Carr's article AND the rebuttals to it. The articles below present different cases for how IT can bring a competitive advantage. See if you can find a common thread in these articles.
Completing this unit should take you approximately 10 hours.
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Students mustMark as done
This chapter discusses the four components of information systems and the role information technology plays in business. Read it to gain a basic understanding of these two critical topics, then attempt the two case studies and answer the questions that accompany each case.
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Students mustMark as done
Moore's Law, named for the co-founder of Intel Gordon Moore, defines expected advances in the need for data storage over time. In reality, it defines much more, beyond simply data storage. Read this chapter and attempt the exercises to gain a broader understanding of the importance and costs associated with Information Systems.
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Students mustMark as doneRead these sections. Think about the evolution of technology over time and how many technology delivery tools have changed in your lifetime, from computing devices to smartphones. Consider the author's claim that management does matter. As the competitive landscape and technology change rapidly, s you saw with Moore's Law, consider how a business can use strategy to take a proactive approach toward strategic growth over time.
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Students mustMark as done
Every enterprise strategy has multiple competing pressures. As you watch, think about the day to day operations of an organization in terms of these pressures. First, there is the demand side of the business and gaining a competitive advantage. On the control side, there are the enterprise systems and processes driving information systems strategy. A third critical aspect is the supply aspect of the system by which we are managing our data and interactions with customers.
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Students mustMark as done
The "Harry Potter" example that leads off this reading provides an excellent example of pre-planning, organized business processes, and the need for flexibility in information systems. Each Potter volume increased the pre-orders exponentially, and Amazon used its prior experiences to create policies and practices designed to improve customer experience. As you will see, business processes are a blueprint for success, supported by technology, information systems, and a range of other required services.
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Students mustMark as done
Read this section for an understanding of competitive advantage and the role technology can play in sustaining a competitive advantage. While a bit dated, the principles remain the same, as do the processes and understanding needed to execute them. Complete the exercises at the end of this section. Also, answer the following questions in your notes: What is strategic positioning? How might technology be used to achieve strategic positioning?
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Michael Porter's explanation of the pressures every organization faces to build and maintain a competitive advantage clearly shows the need for executives and strategists to assess a 360-degree view of their ability to build and maintain a competitive advantage. Each exerts pressure, which must be understood and included in any successful strategy.
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Students mustMark as done
Read this chapter to understand Porter's Model in operation. Think about a business you regularly visit, such as a grocery store or online store. Try to briefly describe the rivalries, threat of substitutes, buyer power, barriers to entry, and supplier power for the business you chose.
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Students mustMark as done
This classic description of Michael Porter's Value Chain describes a consistent but straightforward method for analyzing the entire life cycle of a product or service from planning to delivery. That analysis enables management to improve production or services and gain a competitive advantage over other offerers. Read this section to understand the five main phases of the Value Chain and how the secondary components interact. Consider how technology, appropriately applied, can affect the value chain. Consider each question at the end of the reading to reinforce your understanding of this model.
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Students mustMark as done
The value chain proposes that if a business makes a product that meets customers' needs and wants and then sells it at the right time and at the right price, the customer will purchase it. Reflect on some instances in which the customer may still choose not to buy the product, even if the theory of the value chain is applied fully.
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This article ties together the concepts of information systems and competitive advantage. Take note of the examples of how information systems support business processes. Can you think of additional ways that information technologies help businesses every day? Review the quiz questions at the end of the reading.
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Students mustMark as done
As you read, think about how using, protecting, and managing information and data could support an organization's competitive advantage. Conversely, failure to protect data, particularly personal information, could reduce or destroy any competitive advantage within a business. How does understanding customer information and data support current operations? How might it impact future operations?
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Both Zara and The Gap are retail online clothing giants in the fashion s industry. Zara, now worldwide, was founded in Spain. The Gap, also now worldwide, is a US Corporation. Both companies made a critical strategic decision on the future growth of their companies, with Zara taking the lead to move their significant marketing online. Gap later followed. Both still make retail sales but are positioned on the Internet. Zara currently has over 1M hits on its website each month. Read this chapter to understand how early the use of IT, particularly data collection and analysis, helps gain a competitive advantage. How did Zara use data to make early decisions about its business operations? How did Zara's use of data compare to Gap's?
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Students mustMark as done
Netflix is considered a classic example of innovative strategic planning. From the outset, it was designed primarily as an internet-based company, unlike its principal rival, Blockbuster. The early history of Netflix is a study in looking forward to gaining and keeping a competitive advantage. Remember Porter's Competitive Forces Model as you read this chapter. The pressures of all five forces are present as Netflix tries successfully to enter and eventually command a competitive advantage in the rental film industry. As you read the case of Netflix, consider the following question: What are the long-term threats to Netflix? (Hint: Consider changes in technology and copyright/patent/media law). How would Netflix overcome or avoid those threats and continue to have a competitive advantage?
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Students mustMark as done
Read the Netflix case again. Answer the following questions related to the company and its business strategy using the Five Forces framework:
- Do buyers/customers have power in the market or do suppliers (like Netflix)?
- Discuss how the nature of competition changed in the industry.
- What do you believe are the most significant long-term threats to Netflix, and does Netflix's business strategy effectively address these threats?
Post your answers in the discussion forum. Make sure to read other students' posts.
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Students mustReceive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
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