1. Chapter 1: Real World Case – WH Smith PLC
Why did WH Smith need a new retail management system?
What were their goals? How well did the system meet the goals?
How has the staff been included in the process? Is this important? Why or why not?

2. Chapter 1 Quiz – True/False
One of major components of an Information System (IS) is the people resource. The people resources of an information system deals exclusively with the IS specialists.
Since 1960s information systems have been widely available to a broad spectrum of end users.
The number 1,023 is an example of data, while the fact that a customer's account balance is $1,023 is information.
E-Business is defined as the use of Internet technologies to internetwork and empower business processes, electronic commerce, and enterprise communication and collaboration within a company and with its customers, suppliers, and other business stakeholders.
WH Smith’s web-based SCM system allows its store managers to easily access sales and inventory data.

3. Chapter 2 Learning Objectives
Michael Porter’s 5 Competitive Forces Model
Value Chain & Competitive Strategies
Strategic Use of Information Technology

4. Porter’s 5 Competitive Forces Model
Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:
Existing loyalty to major brands
Incentives for using a particular buyer (such as frequent shopper programs)
High fixed costs
Scarcity of resources
High costs of switching companies
Government restrictions or legislation
Power of Suppliers - This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then they hold substantial power. Here are a few reasons that suppliers might have power:
There are very few suppliers of a particular product
There are no substitutes
Switching to another (competitive) product is very costly
The product is extremely important to the buyer, they can not do without it
The supplying industry has a higher profitability than the buying industry
Power of Buyers - This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then they hold substantial power. Here are a few reasons that customers might have power:
Small number of buyers
Purchases of large volumes
Switching to another (competitive) product is simple
The product is not extremely important to the buyer, they can do without it for a period of time.
Customers are price sensitive
Availability of Substitutes - What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses to be a serious threat. Here are a few factors that can affect the threat of substitutes:
The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker is likely to switch over to a beverage like tea because the products are so similar.
If substitutes are similar, then it can be viewed in the same light as a new entrant.
Competitive Rivalry - And last but not least, this describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from:
Many players of about the same size, no dominant firm.
Little differentiation between competitors products and services.
A mature industry with very little growth. Companies can only grow by stealing customers away from competitors.

5. The Value Chain
Improved administrative coordination
Training
Joint design of products and processes
Improved procurement processes
JIT inventory
Order processing systems
Views a firm as a series, chain, or network of activities that add value to its products and services.

6. Competitive Strategies
Cost Leadership (e.g. Wal-Mart)
Differentiation (e.g. Nordstrom)
Innovation (e.g. eBay)
Growth (e.g. Starbuck)
Alliance (e.g. Sears, LandsEnd)
Others (e.g. lock in customers/suppliers, high switching cost, barrier to entry, etc.)
Cost Leadership (low cost producer)
Reduce inventory (JIT)
Reduce manpower costs per sale (see Real World Case 1)
Help suppliers or customers reduce costs
Increase costs of competitors
Reduce manufacturing costs (process control)
Differentiation
Create a positive difference between your products/services & the competition.
May allow you to reduce a competitor’s differentiation advantage.
May allow you to serve a niche market.
Innovation
New ways of doing business
Unique products or services
New ways to better serve customers
Reduce time to market
New distribution models
Growth
Expand production capacity
Expand into global markets
Diversify
Integrate into related products and services.
Alliance
Broaden your base of support
New linkages
Mergers, acquisitions, joint ventures, “virtual companies”
Marketing, manufacturing, or distribution agreements.
Other Competitive Strategies
Locking in customers or suppliers
Build value into your relationship
Creating switching costs
Extranets
Proprietary software applications
Raising barriers to entry
Improve operations or promote innovation
Leveraging investment in IT
Allows the business to take advantage of strategic opportunities

7. Strategic Uses Of Information Technology
Focus on the customer (e.g. CRM) to deliver high(er) customer value
Business Process Reengineering (BPR) for cost, quality, speed, and service improvements
Total Quality Management (TQM) from customer’s perspective (e.g. Six Sigma) to improve business quality
Agility …
Virtual company …
Major competitive differentiator
Develop a focus on the customer
Customer value
Best value
Understand customer preferences
Track market trends
Supply products, services, & information anytime, anywhere
Tailored customer service
Business Process Reengineering (BPR)
Rethinking & redesign of business processes
Combines innovation and process improvement
There are risks involved.
Success factors
Organizational redesign
Process teams and case managers
Information technology
Improve business quality
Total Quality Management (TQM)
Quality from customer’s perspective
Meeting or exceeding customer expectations
Commitment to:
Higher quality
Quicker response
Greater flexibility
Lower cost
Becoming agile
Four basic strategies
Customers’ perception of product/service as solution to individual problem
Cooperate with customers, suppliers, other companies (including competitors)
Thrive on change and uncertainty
Leverage impact of people and people’s knowledge
The virtual company
Uses IT to link people, assets, and ideas
Forms virtual workgroups and alliances with business partners
Interorganizational information systems
Virtual Company Strategies
Share infrastructure & risk with alliance partners
Link complementary core competencies
Reduce concept-to-cash time through sharing
Increase facilities and market coverage
Gain access to new markets and share market or customer loyalty
Migrate from selling products to selling solutions

8. An Agile Company
Provides solution to customer’s (unique) individual problem; value-based pricing
Be able to cooperate with customers, suppliers, other companies/competitors
Is organized so that it can thrive on change and uncertainty
Leverages impact of people and their knowledge

9. A Virtual Company IT links people, assets, and ideas
Forms virtual workgroups and alliances with business partners (with complementary core competencies)
Shares infrastructure & risk with partners
Gains access to new market (market shares) & customers
Inter-organizational (Enterprise-wide) IS
Virtual Company Strategies
Share infrastructure & risk with alliance partners
Link complementary core competencies
Reduce concept-to-cash time through sharing
Increase facilities and market coverage
Gain access to new markets and share market or customer loyalty
Migrate from selling products to selling solutions