ISYS104 Lecture Notes - Human Resources, Cost Leadership, Bargaining Power
31 May 2018
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Chapter 3- Organisational Strategy, Info Systems and Competitive Advantage
- CRM- Customer relationship management
- Goal of CRM: To manage data about customers and their interactions with organizations
What does an organization do to determine strategy?
- Organisations examine industry structure to determine a strategy. Competitive Strategy
determines value chains and business processes
- Competitive advantage: A superiority gained by an organization when it can provide the
same value as its competitors but at a lower price, or can charge higher prices by
providing greater value through differentiation.
Competitive strategy through Oneliners
- A one-sentence description of your product or service.
- Product description and value proposition are used for customers, company description
is for investors and mission is for prospective employees.
Q2: What Five Forces Determine Industry Structure?
- Porter’s five copetitive forces:
1. Rivalry among existing organisations
2. Bargaining power of customers
3. Bargaining power of suppliers
4. Threat of substitutions
5. Threat of new entrants
- Bargaining power: The relative ability of parties in a situation to exert influence over
each other
Q3: How Does Analysis of Industry Structure Determine Competitive Strategy?
- Porter identified four competitive strategies:
▪ Cost leader
1. Broad cost leadership across industry
2. Narrow cost leadership focused on industry segment
▪ Differentiation (What makes you unique?)
1. Broad differentiation across industry (most effective)
2. Narrow differentiation focused on industry segment (most effective)
▪ Goals, objectives, culture and activities
1. Must be consistent with strategy
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