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Why Strategy Matters?

Why Strategy Matters?. Rev: Feb, 2012 Euiho (David) Suh , Ph.D. POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management Engineering POSTECH. Why Strategy Matters?. New Paradigm:

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Why Strategy Matters?

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  1. Why Strategy Matters? Rev: Feb, 2012 Euiho (David) Suh, Ph.D. POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management EngineeringPOSTECH

  2. Why Strategy Matters? • New Paradigm: • God helps those who have strategies, not those who just work hard without strategies! • Old Paradigm: • God helps those who help themselves!

  3. NEW COKE vs. CLASSIC COKE vs. WIN! What happened? “Cultural Resistance” • Customers’ Strong Cultural Resistance to NEW COKE • Americans regarded CLASSIC COKE as a symbol and tradition of America • Replacing COKE with NEW COKE was perceived as breaking the symbol and tradition

  4. What would be another caseabout cultural resistance? NEW COKE vs. CLASSIC COKE vs. WIN! What happened? “Cultural Resistance” • Customers’ Strong Cultural Resistance to NEW COKE • Americans regarded CLASSIC COKE as a symbol and tradition of America • Replacing COKE with NEW COKE was perceived as breaking the symbol and tradition

  5. WALMART vs. E-MART vs. WIN! ’06 Withdrawal out of Korea,selling 16 stores to E-MART

  6. ASIANA AIR vs. KOREAN AIR We are young, too! vs. What happened?

  7. ASIANA AIR vs. KOREAN AIR – Answer • Change of Rule of Competition WIN! • Competition in Disadvantageous Condition • Airplanes of Asiana Airlines were newer than airplanes of KOREAN AIR→ KOREAN AIR can’t beat Asiana Airlines in the age competition • Marketing of KOREAN AIR in Different Angles • KOREAN AIR emphasized their skilledservice, know-how, and experiences

  8. What would be another caseabout changing rule of competition? ASIANA AIR vs. KOREAN AIR – Answer • Change of Rule of Competition WIN! • Competition in Disadvantageous Condition • Airplanes of Asiana Airlines were newer than airplanes of KOREAN AIR→ KOREAN AIR can’t beat Asiana Airlines in the age competition • Marketing of KOREAN AIR in Different Angles • KOREAN AIR emphasized their skilledservice, know-how, and experiences

  9. NamyangDairy • Result • 100 million packs sold in 100 days after Launching • The most sold milk in a day (1million packs a day) GT Technology! All the main competitors focused onFunctional & Processed milk Namyang focused on white milk

  10. βetamax vs. VHS (The VCR Battle) SONY: Betamax, 1974 JVC: VHS, 1976 ≪ 95% of the VCR market, 1988 SONY: The biggest loser of standards war? What happened?

  11. βetamaxvs. VHS (The VCR Battle) – Answer • Network Externality WIN!

  12. What would be another caseabout network externality? βetamaxvs. VHS (The VCR Battle) – Answer • Network Externality WIN!

  13. Apple vs. IBM vs. WIN! Closed Platform Open Platform APPLE has good quality with a higher level of technology  Due to its closed platform, less technical support is provided IBM makes better profits in its own way, relying on the compatibilities with other providers of software and hardware (e.g. Microsoft Windows) and allows other companies to make clones  Even though APPLE’s technology is better than IBM’s, IBM beats APPLE because of their high compatibilities

  14. QWERTY vs. Dvorak QWERTY Keyboard vs. Dvorak Keyboard What happened?

  15. QWERTY vs. Dvorak – Answer • Customer Addiction WIN!

  16. What would be another caseabout customer addiction? QWERTY vs. Dvorak – Answer • Customer Addiction WIN!

  17. Miwon vs. Mipung WIN! “Verbal Addiction”

  18. Up-selling Sales technique that a seller induces the customer to purchase more expensive items, upgrades, or other add-ones

  19. Cross-selling & Sales technique that a seller analyzes the customers’ pattern and suggests products which are often sold together

  20. Information Technology Strategy Case (1/5) Problem Usually business people or young couple mind tocheck in and check out at the hotel front desk Saving and managing VIP customers’ information Allowing customersto check in and check outwithout going to the front desk “Customer Relationship Management (CRM)” Marriott Hotel

  21. Information Technology Strategy Case (2/5) Difficulties in tracking and managing baggage RFID-enabled air baggage tracking and control system • Risk of loss • Higher likelihood of terrorist attacks • RFID: Radio Frequency Identification • Automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders • Asiana Airlines

  22. Information Technology Strategy Case (3/5) • Escrow service of G-market 4. Receipt Comfirmation 5. Transferring Payment Customer G-market Seller 1. Purchase/Payment 2. Delivery Request 3. Sending Product G-market

  23. CustomerInformation Campaign Information Visualized Answer tool Visualized CampaignDesign tool Visualized Campaign Evaluating tool Information Technology Strategy Case (4/5) Middle Office System Front Office System Back-end Office System Data Mining System Branch Mining DB Data Collecting and Auditing Call Center Internal Data CRM DB Internet Banking& Tele-Banking External Data Customers Analysis CRM Mart OLAP System CD / ATM Sampling Transformation Transmission CampaignManagementSystem “Customer Relationship Management (CRM)” Tele-marketer DMI Shinhan Bank

  24. Information Technology Strategy Case (5/5) “Enterprise Resource Planning (ERP)” Korail

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