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Exam December 2016, answers

Information Systems Strategy (University College Cork)

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1. Introduction:
a. Corporate strategy – refers to the overall scope and direction of a business and the way
in which its various business units work to achieve goals.
b. Porter and Eisenhardt both put forward ideas for corporate strategy
c. Porter’s Strategy
i. Positioning: Strategy is defining a unique position in a market, doing so by
making trade-offs and forging a fit among activities.
d. Eisenhardt’s Strategy:
i. Strategy as simple rules: Strategy is concerned with making several simple rules
that guides a firm through the chaotic world of business, towards its objectives.
e. This essay will act as a comparison outlining differences or similarities in the following
areas;
i. Market suitability
ii. Features of strategy
iii. Implications for ICT strategy

2. Market Suitability:
a. Porter for stable markets:
i. Chaos is minimal and variables are limited
ii. Due to features of positioning strategy
1. Firstly, chaotic = difficult to identify positions
2. Similarly, difficult to make trade-offs and create fits.
iii. E.g. Airline industry
b. Conversely
c. Eisenhardt for chaotic, unstable markets:
i. Allows for flexibility
ii. As market complexity increases, a simpler strategy is required
iii. E.g. Google ventures

3. Features of the Strategy:

a. Similarly, both strategies have features -
b. Both strategies comprise of a number of features to make the strategy what it is
i. Porter:
1. Positions:
a. These are the types of positions a firm can occupy in the market
i. Variety based – choice of product variants
ii. Needs based – targeting segments of customers and
their specific needs
iii. Access based – customers who are accessible in
different ways
2. Trade-offs:
a. A trade-off is that in order for a position to be occupied on must
“choose what not to do”. More of one thing necessitates less of
another.
i. Inconsistencies in image or reputation:

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1. Ryanair can be ‘low-budget’ or ‘high quality’ but

not both.
ii. Strategies are not compatible:
1. Different strategies may require different
equipment, skills etc.
iii. Confusion:
1. Leads to loss of control and coordination
3. Fit:
a. Fit is a mechanism used to lock out imitators by creating a chain
that is strong as its strongest link.
b. Types of fit:
i. Consistency between activity e.g. Ryanir – low cost
ii. Activities are reinforcing e.g. Neutrogena – high quality
iii. Optimization of effort e.g. GAP – high operation
efficiency

ii. Eisenhardt:
1. Types of rules: -
a. Various types of rules companies may choose from:
i. How-to Rules: spell out key features
ii. Boundary Rules: opportunities can only pursued if it lies
in a certain boundary
1. e.g. Cisco – 75 employees, 75% engineers
iii. Priority Rules: managers rank accepted opportunities
1. e.g. Intel – chip manufacturing resources
iv. Timing Rules: synchronise managers with pace of
emerging opportunities
v. Exit Rules: know when to pull out of opportunities
2. Characteristics of rules: -
a. Rules should not be:
i. Broad: should give concrete guidance
ii. Vague: should be exact
iii. Mindless: should make sense and not conflict other
rules
iv. Stale: rules should be updated
b. Balance in rules should be struck
i. Too few rules -> loss of direction / too many
opportunities
ii. Too many rules -> suffocated / prevent managers from
seizing opportunities
iii. Optimal rules = 2-7 rules
3. One similarity is that in selecting rules trade-offs must be made.

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4. Implications for ICT strategy:

a. Similarity:
b. Both strategies can be used as an ICT strategy in themselves
i. Porter:
1. Trade-offs: which solution should we buy
2. Fit: everything developed in C# to help with integration
ii. Eisenhardt:
1. Rules: Only do projects with timeframe of less than 12 months
c. Difference:
d. By choosing a corporate strategy ICT strategy will be different to the alternative
i. Rules: Simple rules mean ICT strategy must be more flexible than Positioning to
capture opportunities.
ii. Positioning: Porters ICT strategy ore likely to be more rigid, be completely in line
with the position they are seeking.

5. Conclusion:
a. Differences / similarities
b. Different situations require different strategies, no better one
c. Which I favour

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