Page 94 - BA1 Integrated Workbook STUDENT 2018

Chapter 9

The strategic context of IT

IT and IS can often form a major part of an organisation’s strategic analysis. For
example:

3.1 Porter’s value chain

 Inbound logistics – JIT inventory control, supplier databases, online ordering.

 Operations – automation, CAD/CAM, modelling, innovation, quality control.

 Outbound logistics – delivery scheduling, EPOS tills.

 Marketing and sales – customer database, internet advertising, social media.

 Service – website FAQs, computerised helplines, diagnostic systems.

3.2 Porter’s five forces

 Competitive rivalry – use IT to enhance the product.

 Threat of entry – use IT to create/bypass barriers – e.g. online retail.

 Threat of substitutes – use CAD to develop new products/features.

 Power of customers – set up switching costs – e.g. loyalty cards, EDI.

 Power of suppliers – use supplier database to dilute power.

Illustrations and further practice

Now review Illustrations 1 and 2 as well as TYU 1 to 4 in Chapter 9 of the text.

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