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8/10/2019 ch03-Case Study
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Dr. Chen, Management Information Systems 1
Chapter 3Information Systems for
Competitive Advantage
- Case & Exercise
Jason C. H. Chen,Ph.D.
Professor of MIS
School of Business
Gonzaga University
Spokane, WA 99258 USA
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Dr. Chen, Management Information Systems 2
In-Class-Exercise (p.99-100)
(UYK - 4&5) 4. Consider the two different bike rentalcompanies in Figure 3-10. Think about the
bikes that they rent. Clearly, the student
bikes will be just about anything that can beridden out of the shop. The bikes for the
business executives, on the other hand, must
be new, shiny, clean, and in tip-top shape.
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#4-a) Compare and contrast the operations value chains of
these two businesses as they pertain to management of
bicycles.
In the low-cost student rental business, used bicycles are acquired
as cheaply as possible (e.g., garage sales, campus and community
police unclaimed bicycle auctions, classified ads, etc.). Minimal
care and maintenance is provided, such as tire repair, lubrication,and brake and gear adjustment. If anything significant is damaged
on the bicycle, it is disposed of at the landfill.
In the high-service rental business, new bicycles are purchased
from known, quality bicycle manufacturers. An array of types,
models, and sizes will be acquired to satisfy a range of bicyclepreferences. Maintenance will be meticulous so that every bicycle
is well-tuned prior to each rental. When a bicycle gets to the end of
its service life, possibly after a year or two of use, it is sold because
it will still have a good market value.
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Dr. Chen, Management Information Systems 4
#4b) Describe a business process for maintaining bicycles for
both businesses.
In the low-cost student rental business, maintenance is
performed only in response to a customer complaint.
Otherwise, the bicycle is assumed to be OK. In the high-service
rental business,a maintenance checklist is performed after each
bicycle is returned from a rental before it is released to be
rented again.
#4c) Describe a business process for acquir ing bicycles for
both businesses.
In the low-cost student rental business, cheap bicycle sourcesare utilized (e.g., garage sales, campus and community police
unclaimed bicycle auctions, classified ads, etc.). In the high-
service rental business, the latest models are purchased from
the most well-known bicycle manufacturers.
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Dr. Chen, Management Information Systems 5
#4d) Describe a business process for disposing of
bicycles for both businesses.
In the low-cost student rental business, bicycles
are used until they break down completely.Disposal involves taking them to the landfill.
In the high-service rental business, the bicycles
will have a lot of market value and so disposal will
involve reselling them, perhaps using eBay to getthe best possible price for the bicycle.
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Dr. Chen, Management Information Systems 6
#4e) What roles do you see for information systems in
your answers to the earl ier questions? The informationsystems can be those you develop within your company
or they can be those developed by others, such as
Craigs List.
The information system for the low-cost student rental
business will be quite simple, perhaps an index card for
each bicycle in inventory.
The information system for the high-service rentalbusinesscould be more sophisticated, with complete
information on each bicycles acquisition and maintenance
records.
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Dr. Chen, Management Information Systems 7
5. Samantha Green owns and operates Twigs Tree Trimming
Service. Samantha graduated from the forestry program of a
nearby university and worked for a large landscape design
firm, performing tree trimming and removal. After several
years of experience, she bought her own truck, stump grinder,
and other equipment and opened her own business in St. Louis,
Missouri.
Although many of her jobs are one-time operations to remove a
tree or stump, others are recurring, such as trimming a tree or
groups of trees every year or every other year. When business
is slow, she calls former clients to remind them of her services
and of the need to trim their trees on a regular basis. Samantha has never heard of Michael Porter or any of his
theories. She operates her business by the seat of her pants.
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Dr. Chen, Management Information Systems 8
#5a) Explain how an analysis of the five competi tive
forces could help Samantha.
By looking at the five competitive forces, Samantha can
better understand how to achieve a profitable performance
in her industry. In this situation, the bargaining power ofcustomers may be relatively strong with the ability to
select another tree service based on price and
responsiveness. Customers will not perceive differences in
quality when removing a tree, other than judging response
time and the thoroughness of cleanup. With tree trimming
for tree maintenance, quality work will be harder for
customers to appreciate. Samantha will have to sell her
training and experience.
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Dr. Chen, Management Information Systems 9
#5a) cont. The threat of substitution is a fairly weak force
with few alternatives available to customers who have a dead
or damaged tree that needs removing. There is, however, the
option of doing nothing in terms of tree maintenance.
Samantha needs to emphasize the benefits of performing
regular tree trimming for long-term tree health.
The bargaining power of suppliers of equipment is a weak
force with many options available for machinery and
equipment. The threat of new entrants is somewhat strong
since anyone with a ladder, saw, and no fear of heights could
sell him/herself as a tree trimmer. Samantha will have to sell
her training and expertise. Finally, rivalry among existingfirms is probably strong. Samantha will have to work to make
her companys name well known, sell her professional
knowledge and training, be responsive and keep her prices
competitive.
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Dr. Chen, Management Information Systems 10
#5b) Do you think Samantha has a competi tive strategy?
What competi tive strategy would seem to make sense forher?
Samantha probably has not thought about a competitive
strategy. Many small business owners have not stepped backfrom the hectic pace of just keeping the business going to
consider this issue. For Samantha, given her forestry
education, a differentiation strategy with a focus on the tree
health and maintenance industry segment may make sense.
Her education will clearly distinguish her from many others in
the field, and she should be able to capitalize on that with
residential and commercial properties requiring regular tree
maintenance.
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Dr. Chen, Management Information Systems 13
CASE STUDY 3
Bosu Balance Trainer(p.101-102)
Case Study 3: BOSU balance trainer (p.101-
102)
(1,2,3, 6,7)
Case Study 3: BOSU balance trainer
http://media.pearsoncmg.com/ph/bp/bp_akamai/mymislab/DMK2_3-4.htmlhttp://media.pearsoncmg.com/ph/bp/bp_akamai/mymislab/DMK2_3-4.html8/10/2019 ch03-Case Study
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Dr. Chen, Management Information Systems 15
BOSU Case Study
What information systems can Bosu
develop to createbarriersto entry to the
competition?
What information system can Bosu
develop to lock in customers?
What information systems can Bosu
develop to establish alliances?
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Dr. Chen, Management Information Systems 16
(Video)1. Analyze the five competitive forces for Bosusmarket.
2. Visit www.bosu.com. What appears to be Bosuscompetitive
strategy? Explain your answer.
3. Explain the nature of the five primary value chain activities for Bosu.
4. Review the principles of competitive advantage in Figure 3-8. What
information systems can Bosu create to enhance its product or
differentiate it from existing and emerging competition?
5. What information systems can Bosu develop to create barriers to
entry to the competition?
6. What information systems can Bosu develop to lock in customers?
7. What information systems can Bosu develop to establish alliances?
Bosu Balance Trainer Case Study
16
http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%204-Case%20Study:%20BOSU%20Balance%20Trainer&clip=pandc/kroenke/Ch_03_4.flvhttp://www.bosu.com/http://www.bosu.com/http://media.pearsoncmg.com/ph/bp/bp_akamai/kroenke/videos.php?title=Chapter%204-Case%20Study:%20BOSU%20Balance%20Trainer&clip=pandc/kroenke/Ch_03_4.flv8/10/2019 ch03-Case Study
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Dr. Chen, Management Information Systems 17
Summary on Principles of Competitive Advantage:
Two Ways to Respond to the Five Competitive Forces (cont.)
A. Product Implementation
1. Create a new product or service
2. Enhance products or services
3. Differentiate products or services
B. System Implementation(Business Process)
4. Lock in customers and buyers
5. Lock in suppliers
6. Raise barriers to market entry
7. Establish alliance
8. Reduce costs
Figure 3-12: Principles of Competitive Advantage
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Dr. Chen, Management Information Systems 18
1. Review the principles of competitive advantage in Figure 3-
12. Which types of competitive advantage has Bosu used to
defeat copycat products?
Bosu has successfully used the principles of (2)product
enhancement, (4) customer lock-in, (6) raising entry barriers,
and (7) alliancesto defeat copycat products
2. What role did information systems play in your answer to
question 1?
Information systems were very important. The databaseof
trainer data was used extensively to help create and maintainthe close relationship Fitness Quest desired with their trainers.
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Dr. Chen, Management Information Systems 21
7. Describe information systems that FitnessQuest could use to
strengthen its strategy for bringing IndoRow to market.
Consider the factors you identified in your answer to question 6in your response.
Fitness Quest should focus initially on information systems that
help communicate with and supportits trainers who are
interested in creating IndoRow classes. Trainers could registerfor email-based newsletters. Trainers could participate in chat
groups about how they like and use their IndoRow machines.
Fitness instructors could share ideas about IndoRow-based
classes in forums. Trainers could provide feedback on the
devices that could lead to product enhancements or extensions of
the product line. Referral rewards could be provided to trainers
who sign up their colleagues