Discuss Linking Value Chains

Discussion: Linking Value Chains

Strategic Use of Information Resources

partners’ information systems. A strategic alliance is an interorganizational relationship that affords one or more companies in the relationship a strategic advantage. An example is the strategic alliance between game maker Zynga and Facebook. As documented in Facebook’s IPO filing in January 2012, the relationship is a mutually beneficial one. Zynga developed some of the most popular games found on Facebook, including Mafia Wars, Farmville, and WordsWithFriends. Facebook has exclusive rights to Zynga’s games, many of which have generated thousands of new members for Facebook. It also gained access to Zynga’s customer database. The alliance gen- erates significant revenue for both parties because players of these games purchase virtual goods with real money and Zynga purchases significant advertising space from Facebook to promote its games. Zynga benefits from the revenue resulting from its gamers on Facebook community.13

Business ecosystems are often groups of strategic alliances in which a number of partners provide important ser- vices to each other and jointly create value for customers. The Facebook ecosystem could be said to include many of the companies that use that platform to deliver their apps, that allow customers to post directly on their Facebook page from the app, or that allow customers to log on to their site using their Facebook account. This adds value for customers by providing greater convenience, and by offering the ability to automatically update their activity stream with information from the app, and both Facebook and the app provider benefit from their alliance.

IS often provides the platform upon which a strategic alliance functions. Technology can help produce the prod- uct developed by the alliance, share information resources across the partners’ existing value systems, or facilitate communication and coordination among the partners. Because many services are information based today, an IS platform is used to deliver these services to customers. The Facebook– Zynga alliance is an example of this type of IS platform. Further, linking value chains through supply chain management (SCM) is another way that firms build an IT‐facilitated strategic alliance.

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