Discussion: Strategic Alliances

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Discussion: Strategic Alliances

Discussion: Strategic Alliances

Information resources include data, technology, people, and processes within an organization. Information resources can be either assets or capabilities.

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• IT infrastructure and information repositories are IT assets. Three major categories of IT capabilities are technical skills, IT management skills, and relationship skills.

• Using IS for strategic advantage requires an awareness of the many relationships that affect both competitive business and information strategies.

• The five competitive forces model implies that more than just the local competitors influence the reality of the business situation. Analyzing the five competitive forces—threat of new entrants, buyers’ bargaining power, suppliers’ bargaining power, industry competitors, and threat of substitute products—from both a business view and an information systems view helps general managers use information resources to minimize the effect of these forces on the organization.

• The value chain highlights how information systems add value to the primary and support activities of a firm’s internal operations as well as to the activities of its customers and of other components of its supply chain.

• The resource‐based view (RBV) helps a firm understand the value created by its strategy. RBV maintains that compet- itive advantage comes from a firm’s information resources. Resources enable a firm to attain and sustain competitive advantage.

• IT can facilitate strategic alliances. Ecosystems are groups of strategic alliances working together to deliver goods and services. Supply chain management (SCM) is a mechanism that may be used for creating strategic alliances.

• Co‐opetition is the complex arrangement through which companies cooperate and compete at the same time with other companies in their value net.

• Numerous risks are associated with using information systems to gain strategic advantage: awaking a sleeping giant, demonstrating bad timing, implementing poorly, failing to deliver what customers want, avoiding mobile‐based alterna- tives, and running afoul of the law.

K E Y T E R M S business ecosystem (p. 34) co‐opetition (p. 48) customer relationship management (CRM) (p. 42) enterprise resource planning

(ERP) (p. 42)

information resources (p. 36) IT asset (p. 36) IT capability (p. 36) network effects (p. 34) resource‐based view (RBV) (p. 45) strategic alliance (p. 48)

social capital (p. 47) supply chain management

(SCM) (p. 42)

D I S C U S S I O N Q U E S T I O N S 1. How can information itself provide a competitive advantage to an organization? Give two or three examples. For each

example, describe its associated risks.

2.

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