Information

Technology
&
Corporate
Strategy
MBA2017
Information Management
Group Presentation C-05

MBA/17/4253 F. M. Ameer
MBA/17/4357 J. M. C. D. Jayasinghe
MBA/17/4391 H. A. H. Madhurasanga
MBA/17/4442 D. S. P. Perera
MBA/17/4458 A. W. J. S. Premarathna
MBA/17/4495 M. A. Y. Samaraweera
MBA/17/4523 S. D. L. D. N. Siyambalapitiya
MBA/17/4561 W. T. S. M. Withana
Introduction

Information Technology and Corporate Strategy: A research perspective

Article Published in the MIS Quarterly, June 1986

Article by J. Yannis Bakos and Michael D. Treacy

1. Major efforts to arrive at a relevant framework and attempt to integrate

them in a more comprehensive view point.

2. major research issues in understanding the impact of information

technology and competitive strategy
IT and Corporate
Strategy in
Business
Strategic views in IT perspective
Internal Strategy
Perspective of an organizational designer trying to
improve the effectiveness and efficiency

Competitive Strategy
Perspective of an industry insider trying to out-smart
the other participants in the industry

IT & Business Portfolio

Perspective of an outsider evaluating entry to the
specific industry
Strategic views in IT perspective

BUSINESS
INTERNAL COMPETATIVE
STRATEGY
PORTFOLIO
STRATEGY STRATEGY

Place terminals in the The Terminal Starts to This system may also be
customers purchasing supply Customer with an important asset in
departments useful information orders other industries such as
are processed faster and mail order retailing
help customer to reduce
inventor

This system will improve the Results in the increase of Firms may enter this
efficiency of the firms switching costs for the industry on the strength of
operations customer and makes it its technology
more difficult for other
distributors to compete
IT &
Internal
Strategy
IT & Internal Strategy
The traditional approach This approach is
of IT was to identify areas represented through
for the application of IT
and focus on the Business System
capability to improve Planning (BSP) and
specific functional areas Office Automation
of the firm. These first Methodology (OAM).
generation methods were
utilized strictly in an
operational view of the
firm with the sole
objective to improve
efficiency of a relevant
business process.
IT &
Competitiv
e Strategy
 IT & Competitive Strategy
Provides 2 Value added 1. Improve each
approaches chain value adding
Describe the function
1. Value-added potential 2. Link with
chain analysis opportunities that customer and
of the firms rise from IT. supplier to
operations. increase their
3 types of switching costs
2. Porters opportunities that 3. Create new
framework for create business
competitive competitive through
analysis. advantage. service or
product
IT & Competitive Strategy
Threat of
New
Entrants

Rivalry
Bargaining Bargaining
Power of Among Power of
Existing
Suppliers Byers
Competitors

Threat of
Substitute
Products or
Services

The five force that shape industry competition

 IT & Competitive Strategy
Porters frame 1. Rivalry among Porter stated that
work for existing companies
competitive competitors manipulate
analysis 2. Threat of new competitive
entrants strategies to
Reflected in 5 3. Threat of achieve
force model which substitute competitive
explains the products or advantages over
dynamics of services competitors.
competition in an 4. Bargaining Therefore Porter
Industry. power of identified,
supplier 1. Cost
5. Bargaining Leadership
power of 2. Product
customer Differentiation
3. Niche Market
IT & Competitive Strategy
generic categories for
competitive advantage
1. 2. 3.
Increase customers Decrease ones own Use IT to provide product
switching costs through switching cost against innovation for the
value adding IT based suppliers. purpose of maintaining
information or service. ones position.

4. 5. 6.
Cooperate with selected Substitute IT for labour. Use information to better
rivals through shared IT segment and satisfy
resources ones customer base.
IT & Competitive Strategy
Areas of opportunity for IT to support competitive strategy
1. Improvement of
operational efficiency and
functional effectiveness
Ex: Systems are using
organizations process to get
advantages specially in critical
functions
3. Product innovation with
IT
Ex: IT supports to Innovate new
product or service with enhancing
its value
2. Exploitation of inter-
organizational synergy
Ex: Coordinating Information System
with Organizations process, the
Operation can be more efficiency
4. Acquisition of bargaining
advantage over ones
customers and suppliers
Ex: To keep existing customers,
providing unique and valuable
information is required. It creates
potential customers and suppliers.
IT &
Business
Portfolio
IT & Business Portfolio

Organizational Industrial
theory economic Game theory
technology theory, such as such as
assimilation related to the importance of
such as stage economic timing
theory scope
Analysis
limitations discovered in
carrying out this research
In the IT and Internal Strategy level
Techniques such as BSP and OAM cannot be easily applied to poorly
structured functions.
Does not treat strategic consideration as the driving force for the
identification of IT opportunities.
Based on implicit, idiosyncratic theory which is not the main body of
the organizations design.

In the IT and Business Portfolio

Strategy
The link between IT and corporate strategy is limited due to the scarcity
of existing work on this subject.
Recommen
dations
Post Article
By adopting a good IT system
organizations can experience,
Increase in market share
Assist business to become high
quality, low cost producers
Vital in the development of new
products
Increase productivity and efficiency
of businesses
By adopting a good IT system
organizations can experience,
IT creates competitive advantage which leads to
New business models
Eg Dell computers IT enabled build to order business models that
other firms have not been able to imitate

Create new services

Eg eBay developing the largest auction trading platform, BPO services

Differentiate yourself from your competitor

Eg Amazon becoming the largest book retailer in the US on the
strength of their massive online inventory system.
IT today is embedded in the,

Organization
Definition and Defines unique
and the
execution of value
leadership of
strategy propositions
business
IT supports strategic
management by
Innovative applications doc 990, Mobitels online railway reservations

Competitive weapons CISCO, eBay. Air Bnb

Changes in processes cloud computing, emerging of BPO

Links with business online tracking or couriers DHL/TNT etc

partners

Cost reductions online billing, balance payment checking

Relationship with Ritz Carlton guest special requirement

suppliers and customers system

New Products Apple combining music to mobile phone

Competitive intelligence A.C Nielson, Google, Trip advisor

Concl
usion
Conclusion
IT improves the adaptability of product and IT changes
the economic of Production.
Further IT facilitate Product Differentiation based on unique
features. This allows to attract existing customers and new

To meet the competition organizations are forcus

critical areas with IT
Ex: SBUs strategy. In business level, IT is more focused to
particular SBUs which are more efficient, profitable and give
synergy to overall business
IT can use for market changes and IT create to value
to the business and create strategic advantages of
doing thing differently
Thanks!
Questions
&
Answers