2. CHAPTER ONE OVERVIEW SECTION 1.1 – BUSINESS DRIVEN MIS
Competing in the Information Age
The Challenge: Departmental Companies
The Solution: Management Information Systems
SECTION 1.2 – BUSINESS STRATEGY
Identifying Competitive Advantages
The Five Forces Model – Evaluating Industry Attractiveness
The Three Generic Strategies – Choosing a Business Focus
Value Chain Analysis – Executing Business Strategies

3. SECTION 1.1 BUSINESS DRIVEN MIS
1-3

4. SECTION 1.1: LEARNING OUTCOMES
Describe the information age and the differences among data, information, business intelligence, and knowledge
Identify the different departments in a company and why they must work together to achieve success
Explain systems thinking and how management information systems enable business communications

5. COMPETING IN THE INFORMATION AGE
Did you know . . .
Avatar, the movie, took over 4 yrs to make and cost $450 million
Lady Gaga’s real name is Joanne Angelina Germanotta
It costs $2.6 million for a 30-second advertising time slot during the Super Bowl

6. COMPETING IN THE INFORMATION AGE
Fact - The confirmation or validation of an event or object
Information age - The present time, during which infinite quantities of facts are widely available to anyone who can use a computer

7. COMPETING IN THE INFORMATION AGE
Examples of the power of business and technology
Amazon – Not a technology company; primary business focus is selling books
Netflix – Not a technology company; primary business focus is renting videos
Zappos – Not a technology company; primary business focus is selling shoes

8. COMPETING IN THE INFORMATION AGE
The core drivers of the information age
Data
Information
Business intelligence
Knowledge

9. Data
Data - Raw facts that describe the characteristics of an event or object

10. Information
Information - Data converted into a meaningful and useful context

11. Business Intelligence
Business intelligence - Information collected from multiple sources such as suppliers, customers, competitors, partners, and industries that analyzes patterns, trends, and relationships for strategic decision making

12. Knowledge
Knowledge - Skills, experience, and expertise coupled with information and intelligence that creates a person’s intellectual resources
Knowledge worker – Individual valued for their ability to interpret and analyze information

13. THE CHALLENGE: DEPARTMENTAL COMPANIES
Common Departments Working Independently

14. THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS
Common Departments Working Interdependently

15. THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS
Systems thinking – A way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while continuously gathering feedback on each part

16. THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS
Management Information Systems (MIS) – A business function, like accounting and human resources, which moves information about people, products, and processes across the company to facilitate decision- making and problem-solving

17. MIS Department Roles and Responsibilities
Chief information officer (CIO) – Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives
Chief knowledge officer (CKO) - Responsible for collecting, maintaining, and distributing the organization’s knowledge
Chief privacy officer (CPO) – Responsible for ensuring the ethical and legal use of information

18. MIS Department Roles and Responsibilities
Chief security officer (CSO) – Responsible for ensuring the security of IT systems
Chief technology officer (CTO) – Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

19. SECTION 1.2 BUSINESS STRATEGY
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20. LEARNING OUTCOMES Explain why competitive advantages are temporary
Describe Porter’s Five Forces Model and explain each of the five forces
Compare Porter’s three generic strategies
Demonstrate how a company can add value by using Porter’s value chain analysis

21. IDENTIFYING COMPETITIVE ADVANTAGES
Business strategy – A leadership plan that achieves a specific set of goals or objectives such as
Developing new products or services
Entering new markets
Increasing customer loyalty
Attracting new customers
Increasing sales

22. IDENTIFYING COMPETITIVE ADVANTAGES
Competitive advantage – A product or service that an organization’s customers place a greater value on than similar offerings from a competitor
First-mover advantage – Occurs when an organization can significantly affect its market share by being first to market with a competitive advantage

23. IDENTIFYING COMPETITIVE ADVANTAGES
Competitive intelligence –The process of gathering information about the competitive environment to improve the company’s ability to succeed
Competitive intelligence tools
Porter’s Five Forces Model
Porter’s Three Generic Strategies
Porter’s Value Chain Analysis

24. THE FIVE FORCES MODEL – EVALUATING INDUSTRY ATTRACTIVENESS
Porter’s Five Forces Model

25. Buyer Power
Buyer power – The ability of buyers to affect the price of an item
Switching cost – Manipulating costs that make customers reluctant to switch to another product
Loyalty program – Rewards customers based on the amount of business they do with a particular organization

26. Supplier Power
Supplier power – The suppliers’ ability to influence the prices they charge for supplies
Supply chain – Consists of all parties involved in the procurement of a product or raw material

27. Threat of Substitute Products or Services
Threat of substitute products or services – High when there are many alternatives to a product or service and low when there are few alternatives

28. Threat of New Entrants
Threat of new entrants – High when it is easy for new competitors to enter a market and low when there are significant entry barriers
Entry barrier – A feature of a product or service that customers have come to expect and entering competitors must offer the same for survival

29. Rivalry among Existing Competitors
Rivalry among existing competitors – High when competition is fierce in a market and low when competitors are more complacent
Product differentiation – Occurs when a company develops unique differences in its products or services with the intent to influence demand

30. Analyzing the Airline Industry
Perform a Porter’s Five Forces analysis of each of the following for a company entering the commercial airline industry
Buyer power
Supplier power
Threat of substitute products/services
Threat of new entrants
Rivalry among competitors

31. THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS
Porter’s Three Generic Strategies

32. THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS
Porter’s Three Generic Strategies

33. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Business process – A standardized set of activities that accomplish a specific task, such as a specific process
Value chain analysis – Views a firm as a series of business processes that each add value to the product or service

34. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Primary value activities
Inbound logistics - Acquires raw materials and resources, and distributes to manufacturing as required
Operations - Transforms raw materials or inputs into goods and services
Outbound logistics - Distributes goods and services to customers
Marketing and sales - Promotes, prices, and sells products to customers
Service - Provides customer support after the sale of goods and services

35. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Support value activities
Firm infrastructure – Includes the company format or departmental structures, environment, and systems
Human resource management – Provides employee training, hiring, and compensation
Technology development – Applies MIS to processes to add value
Procurement – Purchases inputs such as raw materials, resources, equipment, and supplies

36. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Porter’s Value Chain

37. VALUE CHAIN ANALYSIS – EXECUTING BUSINESS STRATEGIES
Value Chain and Porter’s Five Forces Model