Professor Hofacker MAR 4721 Slide 3.1Electronic Marketing

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MAR 4721

Professor Charles Hofacker

Module 3

Internal Company Operations

Professor Hofacker MAR 4721 Slide 3.2Electronic Marketing

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Lecture Overview

How Companies Have Changed Competitive Advantage with IT Use of Intranets by Companies

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Companies Began to Change in the Late 70’s

The Apple II was introduced in 1979 The IBM PC was introduced in 1981 Ethernet Technology in the mid-80’s IP based networks in the early 90’s Off the shelf Intranet applications in the mid-

90’s

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Industrial Age Hierarchical Organization

Evans, P. B. and T. S. Wurster (1997), "Strategy and the New

Economics of Information," Harvard Business Review, 75 (5),

70-82.

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Organizations Hollowed and Flattened in the 80’s

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Flattened Corporation Circa mid 1980s

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Network Age Corporation

Evans, P. B. and T. S. Wurster (1997), "Strategy and the New

Economics of Information," Harvard Business Review, 75 (5),

70-82.

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Firms Assimilate New Technology Slowly Over Time

Acquisition

Deployment

Cumulative Adoption Assimilation

Gap

Time

0

1

Fichman, Robert G. and Chris F. Kemerer (1999), "The Illusory Diffusion of Innovation: An Examination of Assimilation Gaps,"

Information Systems Research, 10 (3), 255-75.

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Stages of IT Assimilation

1970 1980 1990 2000 2010

Organizational Learning

Data Processing-----|--Micro Computing--|-----------Network Era---

Automation

Information

Transformation

Brady, Mairead (2003), "Managing Information Technology," Irish Journal of Management, 24 (1), 125-138.

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Class Discussion

1. Give a hypothetical example where a company uses the Internet to automate a process so as to reduce costs

2. Give a hypothetical example where a company uses the Internet to provide better information to management so that those managers can make better decisions in a more timely fashion.

3. Give a concrete example where a company uses the Internet to transform itself or an entire industry creating a competitive advantage.

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Resource-Based View of the Firm

How do firms derive sustained competitive advantage from IT investment?

Firms need resources that are valuable, rare, inimitable, non-substitutable (VRIN)

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What Are Resources?

Assets o Tangible assets IT infrastructure (commodity)o Intangible assets reputation, image, equity

CapabilitiesCompetences, processes and routines for combining

assets

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From Where Does Competitive Advantage Arise?

Infrastructure components are commodities

The capability of putting these together for a firms’ strategic environment is difficulto Learning-by-doingo Know-howo Corporate culture

Wade, Michael and John Hulland (2004), "The Resource-Based View and Information Systems Research: Review, Extension, and

Suggestions for Future Research," MIS Quarterly, 28 (1), 107-42.

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What Is an Intranet?

An Internet used for internal company purposes, usually closed to outsiders

The ends are employee collaboration, coordination and productivity

The means are the gear and the software that facilitate those things

It is typically based on a client-server model

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Internet Services Harnessed for Company Goals

Email – the killer app Calendar applications The Web Browser as kiosk Audio-video teleconference Whiteboard, netmeeting Document sharing BBS’s, listserves and chat Workflow management Document management

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Class Discussion Question

4. Why do you suppose business people are heavy users of email while students are heavy users of text messaging and chat?

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Indirect Benefits on Social Process

Enhances employee collaboration, coordination

Empowerment Well trained employees with decentralized authority to solve customer problems using IT

Virtual Teams Groups of workers from any time zone working together using email, whiteboard, chat, voice over net, etc,.

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Sales and Marketing Applications

Product information, specs Market research Prospecting Managing sales contacts Sales training

Awad, Elias M. (2003), Electronic Commerce, Second Edition,Pearson Prentice-Hall: Upper Saddle River, NJ.