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THREE LENSES OF IT STRATEGY - Coggle Diagram
THREE LENSES OF IT STRATEGY
Five Forces Model
(Telescope)
Zooms out to the level of the industry, helping understanding how IT is altering the rules of competition for every firm in the industry, including archrivals.
Fierceness of competition
is driven by the
bargaining power
of the
customers
and
suppliers
, the
threat
of
new entrants
, and the
threat
of
substitutes
offering that can meet the customers' needs.
Nuances
Bargaining power is about who's got more clout to force prices down
Substitutes rarely come from the own industry
It analyzes an industry, not an individual firm
A mere threat of new entrants caps prices and raises costs
Competitive Litmus Test
(Microscope)
Zooms in on an individual IT asset for whether it can offer a sustainable competitive advantage over your archrivals.
Valuable but not rare
temporary competitive advantage
e.g. : most IT infrastructure
Valuable and rare
destroy their rarity
e.g. : purchased apps can often be imitated
Value Chain
(Magnifying glass)
Zooms in to compare the firms to its archrivals in how creates value. It helps to recognize where the firm can use IT to reimagine how it earns its keep
Primary activities are shown as a generic value chain which are a firm's bread-and-butter activities that create a products or services. They involve :
Operations
convert them into finished products or services
Outbound logistic
For getting them to customers
Inbound logistic
for getting raw materials
Marketing
to them (e.g., pricing and promotion
After-sales services
Activities in a value chain are building blocks of strategy which undergrid all costs and differentiation
IT instrumental to tailor value chain to the firm's strategic aspiration
Value Stream
A collection of value chain of multiple firms.
Raw materials
->
Suppliers
->
firm for creating products
->
Retailers, Wholesalers and Distribution Channels for sales
->
Customers
Transformation
IT can alter
One step
Operational effectiveness - Decrese cost
Increse Value-added
Linkages
Structural recogfiguration
Coordination
Among functions
Among firms