IBE312: Ch18 – Business Strategy

2013

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Business Strategy

Fig. 18-1 feedback loop of business strategy and IA (M&R) Competitive advantage – “Competitive advantage grows out of

value a firm is able to create for its buyers that exceeds the firm’s cost of creating it. Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price. ” (Porter, Competitive Advantage of Nations, 1990, p.73)

Competitive strategies - Cost leadership (operational effectiveness), Differentiation (innovative products, better customer service, etc)

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Defining Business Strategy

Michael Porter – On Competition – says do it better than the rivals at same or lower cost. - that is:

”Operational effectiveness means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency.”

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Alignment

Of the IA with the business strategy Stakeholder interviews can help reveal the

company strategy. Questions to ask: • What is the company good at? • ..bad at?• What makes the company different from your

competitiors?• How are you able to beat competitors?• How can your web site or intranet contribute to

competititve advantage?

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Strategic Fit

Activity system maps – a tool for examinig strategic fit. See strategic fit between activities.

Can the business strategy be seen in the website design?

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Business Strategy (cont.)

Exposing gaps in the business strategy: • One best way (SWOT) - but not the only way• Many good ways (the elephant) – The “blind” are we.

The elephant is “strategy formulation” or “IA”.

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Many Good Ways

p388

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Competitive Advantage

Moore says ”most people focus on the top layer of differentiated offerings (e.g. branding and positioning), businesses can achieve lasting competitive advantage ony by building from the bottom up. (M&R, p.390)

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IA – invisibility to advantage

Lower layers play a critical role in building a successful user experience.

Think about the company that you are consulting in Ex3. Fill in what you know about that company using this pyramid.