INTRODUCTION
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Transcript of INTRODUCTION
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INTRODUCTION
You live in a digital age Average American relies on more than 250
computers per day According to Time magazine, 14% of cell phone
users stopped having sex to take a phone call 50 of the 2006 Fortune 500 companies were IT
companies Dell Computer is one of them – it was started in
1984 and now has 65,000 employees worldwide
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MANAGEMENT INFORMATION SYSTEMS MIS – planning for, development,
management, and use of IT tools to help people perform all tasks related to information processing and management
Three key resources in MIS1. Information
2. People
3. Information technology
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Information Technology
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Michael Porter and Entourage
http://www.youtube.com/watch?v=mYF2_FBCvXw
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PORTER’S FIVE FORCES MODEL The Five Forces Model helps business
people understand the relative attractiveness of an industry and the industry’s competitive pressures in terms of
1. Buyer power
2. Supplier power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
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PORTER’S FIVE FORCES MODEL
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Buyer Power
Buyer power – high when buyers have many choices and low when their choices are few
Competitive advantages are created to get buyers to stay with a given company
NetFlix – set up and maintain your movie list United Airlines – frequent flyer program Apple iTunes – buy/manage your music Dell – customize a computer purchase
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Buyer Power
Competitive advantage – providing a product or service in a way that customers value more than what the competition is able to do
First-mover advantage – significant impact on gaining market share by being the first to market with a competitive advantage
All competitive advantages are fleeting E.G., all airlines now have frequent flyer
programs
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Supplier Power
Supplier power – high when buyers have few choices and low when choices are many
The opposite of buyer power
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Threat of Substitute Products and Services Threat of substitute products and services –
high when there are many alternatives for buyers and low when there are few alternatives
Switching costs can reduce this threat Switching cost – a cost that makes buyers
reluctant to switch to another product/service Long-term contract with financial penalty Great service Personalized products based on purchase history
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Threat of New Entrants
Threat of new entrants – high when it is easy for competitors to enter the market and low when entry barriers are significant
Entry barrier – product or service feature that customers have come to expect and that must be offered by an entering organization
Banking – ATMs, online bill pay, etc
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Rivalry Among Existing Competitors Rivalry among existing competitors – high
when competition is fierce and low when competition is more complacent
General trend is toward more competition in almost all industries
IT has certainly intensified competition in all sectors of business
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PORTER’S THREE GENERIC STRATEGIES Porter identified 3
generic business strategies for beating the competition
1. Overall cost leadership
2. Differentiation
3. Focus
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Overall Cost Leadership
Overall cost leadership – offering the same or better quality product or service at a price that is less than what any of the competition is able to do
Wal-Mart (Always Low Prices, Every Day Low Prices)
Dell – a computer the way you want it at an affordable price
Hyundai and Kia – reliable low-cost cars Grocery stores – high-volume, low-margin
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Differentiation
Differentiation – offering a product or service that is perceived as being “unique” in the marketplace
Hummer – Like Nothing Else Audi and Michelin – safety Whole Foods – high-end grocery store
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Focus
Focus – focusing on offering products or services
To a particular segment or buyer group Within a segment of a product line To a specific geographic market
Examples Restaurants Physician offices Legal offices
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The Delta Model - Three Distinct Strategic Options
System Lock-InSystem EconomicsMonopolistic Power
Total Customer SolutionsCustomer EconomicsCooperation
Best ProductProduct EconomicsRivalry
Ex: SouthwestEx: iPod
Google-Adwords
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The Triangle: Options for Strategic Positioning
System Lock-In
Total CustomerSolutions
BestProduct
Proprietary StandardMicrosoft, Intel
Low Cost
Dominant ExchangeeBay, Yellow Pages
Horizontal BreadthAccenture
Exclusive Channel
DifferentiationRedefining theCustomer Relationship
Netflix
CustomerIntegration
EDS
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VALUE-CHAIN ANALYSIS
Value-chain analysis – systematic approach to assessing and improving the value of business processes
Value chain – chain or series of business processes, each of which adds value to your organization’s products or services
Business process – standardized set of activities that accomplishes a specific task
Two types of processes: Primary and Support
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VALUE-CHAIN ANALYSIS
VALUE-REDUCING PROCESSES
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SUPPLY CHAIN MANAGEMENT Supply chain management (SCM) – tracks
inventory and information among business processes and across companies
Supply chain management (SCM) system – IT system that supports supply chain management
Just-in-time (JIT) – method for producing or delivering a product or service just at the time the customer wants it
Key feature of effective SCM Dell uses JIT to deliver custom computers
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Dell’s Effective SCM Through JIT
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Supply Chain Management
Most supply chains use inter-modal transportation, multiple transportation channels (railway, truck, etc) to move products from origin destination
This creates supply chain complexities
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Opportunities of SCM
Business strategy Overall cost leadership Bottom-line initiative Running the organization (RGT) framework
Goal is to squeeze out every penny of cost possible in the supply chain
This will optimize fulfillment, logistics, production, revenue and profit, and cost and price
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IT Support for SCM
SCM systems pioneered by specialist companies
SCM is now part of ERP software (discussed later)
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CUSTOMER RELATIONSHIP MANAGEMENT
Customer relationship management (CRM) system – uses information about customers to gain insight into their needs, wants, and behaviors in order to serve them better
Includes multi-channel service delivery, multiple ways in which customers can interact with a business
Focuses on1. Sales force automation
2. Customer service and support
3. Marketing campaign management and analysis
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Customer Relationship Management
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How is data organized in a CRM?
http://www.youtube.com/watch?v=bMA0OLoRB90
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Customer Relationship Management Sales force automation (SFA) systems –
automatically track all the steps in the sales process
Sales lead tracking Listing potential customers Market and customer analysis Product configuration Getting repeat customers
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GM’s Sales Force Automation (Purchase Funnel)
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Opportunities of CRM
Business strategy Differentiation and focus Top-line initiative Growing the organization
Classic goals Treating customers better Understanding their needs and wants Tailoring offerings Providing “delightful” experiences
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IT Support for CRM
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IT Support for CRM
Like, SCM systems, CRM was pioneered by specialist companies
Like SCM, CRM is now part of ERP software (discussed later)
Learn more Siebel Systems Salesforce.com CIO Magazine CRM Today destinationCRM.com
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Force.com Wow!
http://www.youtube.com/watch?v=8tf_WaD52mI
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Knowledge Management Systems
Knowledge management (KM) system – IT system that supports the capturing, organizing, and dissemination of knowledge throughout the organization
Knowledge of facts Sources of information Solutions, patents, and trademarks Best-practice processes
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Social Networking Sites, etc
Social networking site – site on which you post information about yourself, create a network of friends, read about other people, share content such as photos and videos, and communicate with other people (e.g., Myspace, Facebook, etc)
Wiki’s-what the hell is a wiki? http://www.wikispaces.com/site/
tour#myspace
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E-Learning Tools
Facilitate learning on IT-enabled platforms WebCT, Blackboard, and e-College Used in education environments and also in
business environments
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IT Function Structural Placement
Top-down silo – IT function handles all IT needs; strong “command and control” structure
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IT Function Structural Placement
Matrix – Separate IT department but decision making is “matrixed” across the organization
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IT Function Structural Placement
Fully integrated– separate IT function but IT personnel are placed within functional areas; tremendous empowerment
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IT Culture Philosophical Approach
Ranging from… “Wait and see”
Must prove ROI before adopting technologies Early adopters
Support technology innovation failure, a reward system for trying new technologies even if they prove to be unsuccessful
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IT Culture Philosophical Approach
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ENTERPRISE RESOURCE PLANNING How do you bring together SCM, CRM, and
e-collaboration systems? With an ERP system.
Enterprise resource planning (ERP) system – collection of integrated software for business management, accounting, finance, supply chain management, inventory management, customer relationship management, e-collaboration, etc.
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ENTERPRISE RESOURCE PLANNING
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Major ERP Vendors
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ERP
Attempts to integrate everything CRM drives what SCM will produce Everyone works together in e-collaboration The entire organization knows the entire
organization
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ERP Integrates Everything