IT Support in the Business Model

Question 1

• Business model

Answer 1

defines how an organization interacts with its environment to define a unique strategy, attract the resources and build the capabilities required to execute the strategy, and create value for all stakeholders

Question 2

• Four dimensions of business strategy:

Answer 2

market positioning, product positioning, business network positioning, boundary positioning

Question 3

i. Market positioning:

Answer 3

determine the choice of customers to serve, needs and expectations that will be met, and the channels that will be used to reach those customers

Question 4

ii. Product positioning:

Answer 4

determines the choice of products and services to offer, the features of those offerings, and the price that will be charged

Question 5

iii. Business network positioning

Answer 5

determines the role an organization plays and the activities it performs with an extended network of suppliers, producers, distributors, and partners

Question 6

iv. Boundary positioning:

Answer 6

markets, products, and businesses that will not be pursued

Question 7

o Analysis for business context and industry:

Answer 7

 Market size and growth rate are sufficient to satisfy company’s growth goals
 There are opportunities to expand into new markets and product categories
 Are there favorable competitive dynamics? Few direct competitors, little threat to position, no single competitor controls market share, raise barriers to entry and increase switching costs
 Resources to grow are available and affordable
 There is access to suppliers, distributors and there are powerful relationships in place

Question 8

o Analysis for product and market positioning:

Answer 8

 Target customers have significant need and are willing to pay for products that meet the need
 Products offered solve customer needs and are differentiated with unique features and offerings that can be communicated to customers and investors
 No significant barriers to marketing, selling, and distributing

Question 9

o How should IT impact the business model performance

Answer 9

IT should help exploit opportunities and manage threats

Question 10

i. IT support of processes and infrastructure:

Answer 10

1. Streamlined, integrated processes and infrastructure that:
   a. Generate and meet demand (marketing and sales)
   b. Manage your supply chain
   c. Develop and produce products
   d. Deliver services
   e. Ensure continuous innovation
2. Recognized by customers and other industry participants as a quality leader and able to charge certain prices for quality of products and services

Question 11

ii. IT support of people and partners:

Answer 11

1. Recognized leader in attracting and retaining top talent
2. Recognized leader in rewarding employee and partners, motivating commitment and loyalty, and in providing high-quality career development

Question 12

iii. IT support of organization and culture:

Answer 12

1. Structured to support processes, develop talent, and reduce barriers to coordinating work and sharing information
2. Authority and accountability for key decisions and actions is clearly defined and consistent with business strategy and goals
3. Information needed to make decisions and take action is readily available and easily accessible.
4. Culture fosters information sharing and knowledge building

Question 13

iv. IT support of leadership and governance:

Answer 13

1. Visionary and pragmatic leadership
2. Experienced leaders with track record of success and well connected in the industry
3. Strong governance and risk management protect rights of stakeholders
4. Shared values and culture guide decisions and actions

Question 14

v. How should IT impact business capabilities?

Answer 14

IT should help develop strengths and reduce weaknesses

Question 15

i. How IT Drives Cost Savings:

Answer 15

1. Streamline and integrate non revenue generating processes
2. Improve productivity with end-to-end processes
3. Decrease cost of current business operations
4. Improve product quality
5. Clearly differentiate features and benefits of product

Question 16

ii. How IT Drives Revenue Growth:

Answer 16

1. Expand offerings into new markets
2. Improve product quality to make it more attractive to customers
3. Improve customer satisfaction by improving revenue-generating processes like sales and customer service
4. Provide relevant analytical tools to business decision makers
5. Increase speed to market

Question 17

iii. How IT drives asset efficiency:

Answer 17

1. Create shared services and self-service portals
2. Outsource to take advantage of low-cost labor markets
3. Attract and develop top IT talent
4. Best-in-class security and risk management systems
5. Create IT processes that decrease cost and time of launching new IT applications

Question 18

iv. How IT creates sustainable advantage:

Answer 18

1. Differentiate products
2. Launch new IT enable products in high growth markets and industries
3. Increase barriers to entry or switching costs
4. Increase success of innovations