2 Strategy & Information Management I (Business IT Alignment) Flashcards
2.1.1 Strategy
A plan of action to achieve a particular goal
Strategy can be both long term (e.g. 3-5 years) and short term (next 6 months)
2.1.2 Strategic Management
The process of examining (untersuchen) both present and future environments, formulating the organization`s objectives, and making, implementing, and controlling decisions focused on achieving these objectives in the present and future environments.
2.1.3 IS Strategy
Focuses on the system or business applications of IT and is primarily concerned with aligning them with business needs and using them to derive strategic benefits
→ What?
2.1.4 IT Strategy
Concerned with the various aspects of the technology such as architecture, technical standards, security levels, risk attitudes, and technology policies
→ How?
2.1.5 IM Strategy
Concerned with the structures and roles for the management of IS and IT, focuses on issues such as the relationship between specialist and users, management control, performance measurement processes, management responsibilities
→ Which way? Who does it? Where is it located?
2.1.6 Strategy Hierarchy (Bild)
2.1.6.1 Corporate strategy
Concerned with deciding what type of business the organization should be in and how the overall group of activities should be formed and managed
1) growth strategy, 2) stability strategy, 3) retrenchment strategy
Depends on SWOT analysis
2.1.6.2 Generic (allgemeine) or business unit strategy
Refers to the actions and approaches crafted by management to create successful performance in one particular line of business
1) cost leadership, 2) differentiation, 3) focus, 4) mixed
2.1.6.3 Functional strategy
Concerned with managerial game plan for running a major functional activity or process within a business such as research and development unit, marketing unit, financial unit, production unit, H R development unit, etc.
2.1.6.4 Industry & Competitive Forces (Bild)
What are the four Industry & Competitive Forces?
The market oriented approach assumes that a company searches for an attractive market and positions itself in the market. It does so by
o choosing a suitable generic strategy
o influencing the direct market surroundings
Starting point of all planning are the objectives that should be reached by positioning in the competitive field
The organizational structure of a company should follow these targets („Structure follows strategy“)
2.1.6.5 Generic Strategies according to Porter (Bild)
Which Generic Strategies exist according to Porter?
Decide for one strategy and do not get stuck in the middle!
2.1.6.5.1 Cost Leadership
Striving (streben) to be the low-cost producer in an industry can be especially effective
- when the market is composed of many price-sensitive buyers
- when there are few ways to achieve product differentiation
- when buyers do not care much about differences from brand to brand
- when there are a large number of buyers with significant bargaining power
The basic idea behind a cost leadership strategy is to underprice competitors or offer a better value and thereby gain market share and sales, driving some competitors out of the market entirely.
2.1.6.5.2 Differentiation
Differentiation is aimed at producing products that are considered unique
Allows a firm to charge higher prices for its products to gain customer loyalty because consumers may become strongly attached to the differentiation features
A risk of pursuing a differentiation strategy is that the unique product may not be valued highly enough by customers to justify the higher price.
2.1.6.5.3 Focus
Focus means producing products and services that fulfill the needs of small groups of consumers.
There are two types of focus strategies.
- A low-cost focus strategy offers products or services to a small range (niche) of customers at the lowest price available on the market.
- A best-value focus strategy offers products to a small range of customers at the best price-value available on the market. This is sometimes called focused differentiation.
Most effective
- when the niche is profitable and growing
- when industry leaders are uninterested in the niche
- when the industry offers several niches
- when there is little competition in the niche segment.
2.1.6.6 Strategic Choice Perspective (Tabelle Defenders - Prospectors - Analyzers)
2.1.6.7.1 Components of RBV (Bild mit Pyramide)
- 2.2 Methods for determining IS strategies / Measuring IS performance
- 2.2.1 Information Intensitiy Portfolio
Helps to understand different industry sectors (and companies) in terms of ‘information intensity’ of both product and the productions process (Porter’s value chain).
2.2.2.2 Matrix for Application Assessment (Bild)
2.2.2.3 Corporate / System Portfolio Matrix
2.2.2.3.1 Consequences of Strategic Importance of IT
Let’s assume IT is a Weapon in an Organization …
2.2.2.4 Support matrix for critical success factors
2.2.2.5 Balanced IT Scorecard
A performance management tool to keep track of the execution of activities and the consequences of such execution.
2.3.2 Implications of Business IS Strategy Alignment (Bild)
Alignment between business strategy and IS strategy improves performance
