Page 126 - Using MIS

94 Chapter 3 Strategy and Information Systems

So
what? What Strategy Do You Support?

Figure 3-5 shows that companies can choose to be the cost
leader or to differentiate their products, services, or both. The
Yikes! Bikes guide on pages 86–87 describes the effect that a
change from a differentiation strategy to a cost leader strategy
has on one company’s culture. So what? What does this mean to
your career?
First, as stated, you should never propose any idea to
anyone in your company that is not consistent with its
competitive strategy. If your company strives to be the cost
leader, then any proposal to do anything that adds more cost
than it saves will waste your time and others’ time. So adding Source: Dotshock/Shutterstock; Wendy Townrow/Shutterstock
costs to customer service in order to increase customer
satisfaction is a waste. Adding costs to customer service
in order to, ultimately, reduce service or sales costs might,
however, make sense.
Similarly, if your company, like AllRoad, strives to differentiate
itself by providing a large inventory, then a proposal to reduce
shipping times, one that adds cost, is at best neutral to the strategy
and may consume resources better applied to a larger inventory.
Information systems development must mirror the organization’s
strategy in similar ways.
But what about you, personally? Where do you want to work? Questions
If you seek generous travel that pays for quality hotels and
restaurants, then don’t work for a cost leader. You can bet that a 1. Summarize AllRoad’s competitive strategy.
cost leader company will put you in Motel 6s and pay a small food 2. Describe an information system that is consistent with
per diem for your travel. If you naturally like to save costs, a cost AllRoad’s strategy.
leader can be just the place for you, however. On the other hand, 3. Describe an information system that is inconsistent with
if you work for a spa chain that provides the world’s highest- AllRoad’s strategy.
quality hairstyles at $350 a cut, you’re likely to find generous
allowances for your own beauty regimen. 4. Summarize ways that competitive strategy influences
All of this assumes that you know the organization’s organizational culture.
competitive strategy—something you should learn before your 5. Given your abilities, your goals, and your aspirations, describe
first communication with any prospective employer. the type of competitive strategy that is ideal for you.

Q7 How Do Information Systems Provide

Competitive Advantages?

In your business strategy class, you will study the Porter models in greater detail than we have
discussed here. When you do so, you will learn numerous ways that organizations respond to
the five competitive forces. For our purposes, we can distill those ways into the list of principles
shown in Figure 3-12. Keep in mind that we are applying these principles in the context of the
organization’s competitive strategy.