A broken chain link illustrating poorly managed business' value chain. Definition Value chain analysis VCA is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation. Value chain represents the internal activities a firm engages in when transforming inputs into outputs.
The recognition and exploitation of IT capabilities is fundamental to strategic choices of business scope, governance mechanisms, organisational reconfiguration, and competitive actions in the marketplace. Approached from a different perspective, IT can be used to create an opportunity for change in organisations, whether or not the technology is actually central to the delivery of the benefits sought.
The point was reached where it was difficult to submit papers to conferences, even those of an academic nature, without including the phrase in the title or abstract. BPR is a further development of the enterprise value-chain notion.
What it essentially does is to re-assert that organisational process is more important than organisational structure, and that organisational structure form must be determined by what it is that the enterprise does function.
IT is an enabler for BPR, because information systems support data flows, and are hence intrinsically oriented toward function rather than form, and because IT requires re-conception and re-development periodically, and such re-developments cause considerable upheaval and can therefore be used as a catalyst or opportunity for greater change than mere re-automation of existing arrangements.
Other recent theme of relevance to SIS is assessment of IT's contribution to financial performance e. In addition to these well-established lines of analysis, there is a number of areas in which maturation is incomplete.
The comments in the remainder of this section are therefore particularly judgmental and tentative.
A first concern is the prevalance of the use of the terms 'comparative advantage' and 'competitive advantage' as though they were equivalent and interchangeable. The notion of 'comparative advantage' was developed many years ago, as one of Ricardo's contributions to 'classical' economics.
It refers to the notion of market forces allocating resources to nations where they would be relatively most productive, and is therefore applicable at high levels of aggregation, e.
The idea of 'competitive' advantage differs from comparative advantage in the scale at which it operates.
Rather than relating to a broad geo-political area, competitive advantage accrues to individual corporations, provided that they are operating in relatively free-market environments. Although the notion of competitive advantage also originated in micro-economics, it has been much used in marketing and management strategy.
The terms are becoming somewhat confused, in that, where enterprises which have competitive advantage are clustered within a country, that country may be said to derive a competitive advantage PorterAdcock et alSoh et al Another matter that creates difficulties has been the marked tendency to discuss competitive strategy predominantly in terms of leadership, or 'first-mover' status.
The sufficiency of this approach is overdue for careful examination. It is entirely tenable for an organisation to intentionally defer aggressive moves, and instead consciously seek 'second-mover' or 'late-adopter' status.
Circumstances in which senior executives may judge this to be the appropriate strategy include where: A particularly surprising weakness of the existing literature is its inapplicability to organisations which are not subject to powerful market-based competitive forces, such as not-for-profit enterprises, public sector agencies, and associations which are intentionally monopolistic, including industry and professional associations.
This is so marked that some definitions of the term 'strategic IS' are restricted to systems that "confer a unique, sustainable, or otherwise significant advantage" Ciborra For organisations of this kind, it is important that strategic information systems theory be re-conceptualised to stress 'strategy' rather than 'competition', and show strategy in a competitive environment as a special if very important case.
Customers of not-for-profits, of the public sector and of associations have an interest in their efficiency and effectiveness. Incentives need to be expressed not in terms of revenue, market share and growth, but rather in terms of perceived performance against objectives, and benefits delivered to stakeholders.
There are also many circumstances in which such organisations are actors in industry value-chains, or have the potential to have significant negative impact on corporations' cost-profiles, or speed of supply. Cooperation and even outright collaboration are important in such areas as defence and aerospace purchasing, international trade, taxation, statistical and corporate registration returns Clarke a, b.
It is contended that, even in corporations operating in free-market economies, organisational strategy should not be analysed exclusively in competitive terms. Other possible bases include: This is apparent as an important factor in such countries as Japan and Singapore, and is the subject of Porter Two important classes which can be readily identified are: This may be due to the existence of a 'natural monopoly', statutory constraints, or a company which has 'seen off' its competitors.
Examples exist in such sectors as education, health, research and social welfare; industry sectors in which competition does take place, but in which competition is suspended in relation to the IT infrastructure.
A variety of possible motivations exist for such suspension: The question of collaboration leads to the need to define what comprises public infrastructure, industry infrastructure and private investment, and the extent to which the responsibility for investment is public, private or dual.
This issue poses particularly significant difficulties for nations whose traditions and ideology are in conflict with the very notions of collaboration and of publicly-funded infrastructural investment.
Some inferences from Scott Morton in relation to IT infrastructure are summarised in Exhibit Porter's Generic Strategies Michael Porter has described a category scheme consisting of three general types of strategies that are commonly used by businesses to achieve and maintain competitive advantage.
The Marketing Strategies of the Paint Industry (A Case Study of Saclux Paints Limited) The Marketing Strategies – Survival is probably the most basic direct or indirect motivation for all company actions.
No company is in business to fail. Porter generic strategies Michael Porter described three types of strategy to achieve/maintain competitive advantage in his work Competitive strategy: techniques for analysing industries and competitors.
More significant, however, is how the phenomenon of rising costs can, over time, produce strategically relevant shifts in a company’s cost structure and cost competitiveness.
This study originated as the original draft of Marine Corps Doctrinal Publication , Strategy (). Although it was written under USMC auspices, there is nothing service-specific about it.
Rather, it was designed to address the fundamental question, "What is the . A means of providing corporations with an analysis of their competition and determining strategy, Porter's five-forces model looks at the strength of five distinct competitive forces, which, when taken together, determine long-term profitability and competition.