clase05 remax]

7/25/2019 Clase05 Remax]

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Information Technology &

Business Strategy

Ramiro Montealegre

UNIVERSIDAD

TORCUATO DI TELLA

Sesin 5:

Transformacin Organizacional

Information Technology & Business Strategy 2015 Ramiro Montealegre

Todays Agenda

2:00 3:30 Summary: IT in strategy and Biz model

3:30 3:50 Break

3:50 5:20 Case Discussion: Re/Max

+ Organizational change

5:20 5:40 Break

5:40 7:10 IT Infratructure

+ Case Facilitation: Knight Capital

7:10 7:30 Break

7:30 9:00 Case Critique: Knight Capital + Beyond


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Why do you do what you do?

How do you want to get there?

What do you need to do?

Effective strategies tackle 3 questions


Suppliers Buyers

Substitutes

New Entrants

IndustryCompetitors

Rivalry Among

Existing Firms

Bargaining Powerof Buyers

Threat ofSubstitute Productsor Services

Bargaining Powerof Suppliers

Threat ofNew Entrants

Five Forces Determine Industry Profitability


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Enabled throughEffective Useof Technology

DifferentiationSony

Customer

IntegrationEDS

Redefining

Customer Rel.Saturn

Proprietary Standard

Microsoft, Intel

Low Cost

Southwest

Horizontal Breath

Fidelity

Exclusive Channel

Rural Wal-Mart

Dominant Exchange

eBay

Options for Strategic Positioning


Exercise: Positioning Well-Known

Companies on the Triangle


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Information Technology & Business Strategy 2015 Ramiro MontealegreInformation Technology & Business Strategy 2014 Ramiro Montealegre

Exercise: Customer Segmentation

Tier Description

Information Technology & Business Strategy 2015 Ramiro MontealegreInformation Technology & Business Strategy 2014 Ramiro Montealegre

Existing Business Competencies with Respect to the Strategic Positions

1.

2.

3.

1.

2.

3.

Customer Integration

Horizontal Breath

1.

2.

3.

Redefining Customer Experience


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Why do you do what you do?

How do you want to get there?

What do you need to do?

Effective strategies tackle 3 questions


Technology & Business StrategyProfessor Ramiro Montealegre


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(Johnson, Christensen and Kagermann 2008)

Customer Value Proposition- Target customer- Job to be done- Offering

Profit Formula- Revenue model- Cost st ructure- Margin model- Resource velocity

Key Resources- People- Technology, products- Equipment- Information- Channels- Partnerships, alliances- Brand

Key Processes- Processes- Rules and metrics- Norms

Elements of a Successful Business Model


What are you trying to do withyour digital business initiatives?

Augment current Create new

business models business

models


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The Three Components of a Digital Business Model

Weill and Woerner, 2013


Inbound

LogisticsOperations Service

Marketing

and

Sales

Outbound

Logistics

M

A

R

G

I

N

N

I

G

R

A

M

Firm Infrastructure

Human Resources Management

Technology Development

Procurement

The Value Chain


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C

u

s

t

o

m

e

r

Physical

Virtual

Value Chain Interface Demand

Platform

Experience

Content

The Virtual Value Chain


BusinessOutcomes

ITImplications

BusinessImplications

Vision

Mission

StrategicImperatives

Strategy and IT on a Page


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Information Technology and Business Strategy


The only person who

likes change is a baby

with a wet diaper

Mark Twain


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ERP System

ERP

System

DataanalysisHuman

resources

Manufac-

turing

Finances

Supply-

chain

Sales

Services


- Assumptions

- Nature and Focus

- Tactics

Organizational Change


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RE/MAX,

like

any

franchise

business,

financial

viabilitybased

on

maintaining

and

growing

market

share

Keyobjectives:sellingfranchisesandhiringandretainingagents

Key

Value

proposition:

Strongbrandname

Provenbusinesspractices

Topclasssupport(trainingandeducation,IT,andtimely

market

knowledge)

Realestateprofessionalsthatareinbusiness

forthemselves,butnotbythemselves.


U.S. Residential Real Estate Industry

One of the largest sector in U.S. economy ($60-70 Billion)

Highly competitive at all levels

Returns fluctuate with the health of the national economy

In the past decade, it has been a roller coaster


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0

50,000

100,000

150,000

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Agents

0

2,000

4,000

6,000

8,000

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Offices

0

20

40

60

80

100

2003 2004 2005 2006 2007 2008 2009 2010 2011

Countries

0

5,000

10,000

15,000

2002 2003 2004 2005 2006 2007 2008 2009 2010

Owners


IT

at

RE/MAX,

LLC.Historically,akeycomponentofcompanysmarketingstrategy.

Ourbrokerscanrecruitandretainagentsmoreeasilybymakingavailabletothemtechnologicaltools

thatgenerateleadsandreferrals,facilitatenetworkcommunication,andtracklistingandsales

activities

FormerRE/MAXPresident,DarylJesperen(2001)

1989 RE/MAX

Office

Management

Systems

(internal)

1993

CD-ROM

Agent Roster

1998

2006

1992

1995

1992

RE/MAX

Forum on

CompuServe

2001

2005

2009

2010

RE/MAX

Agent 2000

RE/MAX

Satellite

Network

Remax.co

m

Mainstreet

1.0

Web

Roster on

Mainstreet

All listings on

Remax.com

2006

remax.com

undergoes a

major redesign

RE/MAX

University

On-Demand

Training

available

anywhere,

anytime1990 2010

2002

Mainstreet 2.0

Source: RE/MAX, LLC.


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What are the key distinction betweenSUSTAINING and DISRUPTIVE innovations?

Surviving Disruption

- SUSTAINING innovation maintains a steady rate ofproduct improvement.

- DISRUPTIVE innovation:

Often sacrifice performance along dimensions that are

not important (or dont create value) to currentcustomers

However, the new attributes can open up new markets

Disruptive Technologies: A driver

of leadership failure

Time

P

erformance

Disruptive

technology


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... In the process of transitioning

SupportingAGENTStoservecustomers

SupportingCUSTOMERSbyanenablingnetwork

from

to


Illustrate a common challenge facing companiestoday: how to prepare for, and adapt to, a digitalworld

Discuss whether RE/MAX business model cancontinue to thrive in the new environment(customer-centric, rapid and unpredictabletechnological changes, and increasing internalcomplexity)

The Primary Objectives of theRE/MAX Case Study


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POTENTIAL BENEFITS

Operational StrategicBusiness

Transformation Reeng. High

ProcessNATURE automate Reeng. POTENTIALOF CHANGE RISK

ProcessSimplification

Incremental Process LowImprovementInternal External

FOCUS

ORGANIZATIONAL CHANGE: NATURE AND FOCUS


Transformational Incremental(Radical)

NATURE OF CHANGE

Evolutionary

SPEEDOFCHANGE

Revolutionary

Multi-organization

Multi-processes

Single Process

FOCUSOF

CHANGE

Change Tactics


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Change Through Persuasion, Garvin, D. and Roberto, M., HarvardBusiness Review, February 2005.

Your Companys Secret Change Agent, Pacale, R.T. and SterninJ., Harvard Business Review, May 2005.

The Underlying Structure of Continuous Change, Lawrence T.B.,Dyck, B., Maitlis, S., and Mauws, M., MIT Sloan Management Review,Summer 2006.

Overcoming Resistance to Change, P. Michelman, HarvardManagement Update, July 2007.

From mental models to Transformation, J. Wind and C. Crook,Rotman Magazine, Spring 2009.

Immunity to Change: How to Overcome It and Unlock Potential in

yourself and your organization, R. Kegan and L. Lahey, HBS Press,2009.

Achieving Successful Strategic Transformation, G. Johnson, G.Yip, and M. Hensmans, MIT Sloan Management Review, Spring 2012.

References


Please prepare:

Knight Capital Americas

For Next Class

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