It Test 1, Part 4

Front 1

frameworks for analyzing value creation

Back 1

industry analysis (5 forces)
value chain
customer service lifecycle

Front 2

industry analysis

Back 2

underlying premise: different industries offer different potential

-- differences can be measured using the 5 forces framework

Front 3

5 forces framework -- industry analyis

Back 3

1. threat of new entrants: how easily can competitors enter the mkt.?; are there significant barriers?

2. threat of substitutes: how easily can product or service be replicated to meet the same customer needs?

3. bargaining power of buyers: how easily can customers influence the price of the product?

4. bargaining power of suppliers: how easily can individuals and firms sell their products or services at high prices?

5. rivalry among existing competitors: how aggressive competition is
-- cartels
-- hyper-competition

Front 4

cartel

Back 4

allocation of mkt. shares; centralized pricing
(OPEC)

Front 5

hyper competition

Back 5

fierce rivalry among existing firms and a rapid rate of innovation leading to fast obsalecence of any competitive advantage (ex: search engines - google)

Front 6

how the 5 forces apply to investing in IS

Back 6

can the use of IT...
- increase barriers to entry in the industry?
- decrease supplier bargaining power?
- decrease buyer bargaining power?
- change the basis of industry competition?
- decrease the availability of substitutes?

Front 7

value chain

Back 7

model that identifies important business activities (processes):
- primary activities
- support activities

the model is used to analyze opportunities for using strategic IS to create added value

Front 8

support activities

Back 8

firm infrastructure
HR management
technology development
procurement

activities not directly related fundamental resource transformation process that is the essence of the firm

Front 9

primary activities

Back 9

inbound logistics
operations
outbound logistics
marketing and sales
service

fundamental activities inherent to any business directly related to value creation

Front 10

applying the value chain

Back 10

activity analysis: identify the major activities and understand how each is performed (flow chart); determine how each activity creates value

evaluation and planning: look for opps. to modify activity processes to enahance value creation; find opps. to use strategic IT initiative to differentiate value and create competitive advantage -- added value

Front 11

value network

Back 11

firms interact with each other in a value network

individual value chains are linked with suppliers (upstream) and customers (downstream)

these linkages offer opportunities for value creation with information systems

Front 12

the customer service life cycle

Back 12

objective: to map the relationship between a firm and its customers; to identify service outcomes (unsatisfied customers, substandard service)

to provide:
- use of advanced IT to improve customer service
- deployment of IT-dependent strategic initiatives

Front 13

customer service life cycle - 4 phases

Back 13

this enables the firm to view the relationship as the customer sees it

it helps managers address needs from the customer's point of view

phase 1: requirements
phase 2: acquisition
phase 3: ownership
phase 4: retirement

Front 14

customer service life cycle - 13 phases

Back 14

each of the 4 phases is further subdivided into stages:
- NEEDS for the product
- PURCHASING the product
- USING the product
- RETIRING the product or service

Front 15

CSLC - phase 1

Back 15

requirements
- establish: customer identifies a need for the product or service
- specify: customer details the characteristics of a product or service or interest

Front 16

CSLC phase 2

Back 16

acquistion:

- select a source: the customer decides where to purchase; the internet is a new source that reduces the vendor's dist. cost

- ordering: customer requests product or service

- authorization and payment: transaction process

- acquire: customer begins using the product or service

- evaluate and accept: customer ensures the product or service meets customer spec. and the stated objective for use

Front 17

CSLC phase 3

Back 17

ownership

- integrate: customer adds the product or service to existing inventory of resources

- monitor use and behavior: customer ensures product remains in working order

- upgrade: customer improves or modifies service as needed

- maintain: customer services the product is taken care of as needed; firm can use these opps. to avoid disatisfaction and provide outstanding service

Front 18

CSLC pahse 4

Back 18

retirement

- transfer or disposal: customer transfers, resells, disposes, etc. or product

- accounting: customer evaluates the experience provided by the product or service; measures the total life cycle costs of ownership

Front 19

13 CSLC phases

Back 19

1. establish
2. specify
3. select a source
4. ordering
5. authorization and payment
6. acquire
7. evaluate and accept
8. integrate
9. monitor use and behavior
10. upgrade
11. maintain
12. transfer or disposal
13. accounting

Front 20

virtual value chain

Back 20

info. as the entity being transformed through the chain and activities

map sequential activities that enable a firm to transform raw data into higher value information output

adopts the same logic as the physical value chain

Front 21

five activities of virtual value chain

Back 21

1. gather: collecting and gathering info.

2. organize: storing data in a way that makes later retreival simple and effective

3. select: identifying and subtracting data needed from the data repository

4. synthesize: packing info. so that it can be used by the customer in the way that it is directed

5. distribute: transmitting appropriate packaged data to its intended user

Front 22

3 types of strategic initiatives

Back 22

1. visibility: see through org. data typically treated as a black box
- ex: amazon tracking click patterns to understand consumer behavior

2. mirroring capabilities: transforming phys. activities into. info. based ones. can increase efficiency, effectiveness, and performance
-- ex: online card catalog

3. new digital value: creating relationships with customer that increases CWP, creating new value in the form of new info. enabled products or services

Front 23

value matrix

Back 23

combines physical and virtual value chains

(x axis: physical, y-axis: virtual)

Front 24

creating value with data

Back 24

purpose: create value for customers
-- increases CWP

factors determining data strategy: customer purchase frequency, ability to customize the product

Front 25

theoretical repurchase frequency

Back 25

how often the customer repurchases goods or services

function of the industry of a firm and characteristics of the value proposition that it offers

Front 26

degree of customizability

Back 26

how much the prod. or service can be tailored to the spec. needs and reqs. of individual customers

Front 27

customer data strategies

Back 27

SEE SLIDES FOR chart

y axis: theoretical repurchase rate (L to H)
x axis: degree of customizability (L to H)

rewards strategy personalization
low payoff acq. strategy

Front 28

rewards strategy

Back 28

high theoretical repurchase freq., low customizability

products are purchased frequently but very standard -- difficult to tailor to spec. customer requests

Front 29

acquisition strategy

Back 29

low theoretical repurchase frequency, high customability

low theoretical repurchase frequency, high degree of customization

Front 30

personalization strategy

Back 30

repeated interactions, returning clients

Front 31

no potential

Back 31

low theoretical repurchase frequency

relatively low degree of customizability

Front 32

unobtrusive data capture

Back 32

third dimension of customer data strategies

extent to which -- during the normal business cycle -- data is collected and stored in a readily usable format

goes from low to high