Business Strategy 510

Exercise – Week 1

QUESTION SET 1:

Business strategy alone is not adequate for a company to optimize Information Technology for a competitive advantage. Business strategy should complement the organizational and informational strategies to achieve the company's overall business objective. Based upon the Information System Strategy Triangles the organizational, informational and business strategies should be driven by the business strategy objectives. If these strategies are out of balance it can result in not achieving the business strategy objectives. This means that when changes happen in any one element of the Information System Strategy Triangle the other two should modify their strategies to complement each other.

In the readings there were many examples of companies leveraging IT to try to achieve an advantage but failed from not incorporating the other strategy. For the BP incident they had a clear business strategy and organizational strategy but did not incorporate the informational strategy and it resulted in major losses from the oil spill. Another example is Merrill Lynch where they implemented the technology but did not adjust their organizational strategy to complement the informational strategy and loss their distinctive advantage of their skilled personnel and service quality.

Walgreens’ leveraged an Information System strategy with their use of the internet to provide additional value their customers. There Information System strategy was to provide additional services above their current retail stores by providing extensive information online and giving the ability for consumers to order online and have prescriptions delivered. Even with the ability to deliver however Walgreens realized that 90% of their customers who placed orders over the web still preferred to come into the store to pick up their prescriptions. So their competitive advantage was still their physical stores over any online pharmaceutical company. The barrier for entry into an Internet only business is easy; however competing with Walgreens’ extensive amount of retail stores is not. They simply looked to complement their already successful box store business by providing additional online value instead of cannibalizing their