The Next Economy
Jason C. H. Chen, Ph.D.
Professor of MIS
Gonzaga University
Spokane, WA 99258, USA
chen@jepson.gonzaga.edu
TM -1
The Economies
OLD Economy (4P)
•
•
•
•
Price
Place
Product
Promotion
Information
MIS/IS/IT:
Internet/
Data mining/
CRM
…
Next Economy (4R)
•
•
•
•
Relationship
Retrenchment
Relevancy
Reward
TM -2
The Economies
OLD Economy
(4P’s)
New Economy
(4C’s)
•
•
•
•
•
•
•
•
Price
Place
Product
Promotion
Information
Customer
Cost
Convenience
Communication
Next Economy
(4R’s)
•
•
•
•
Relationship
Retrenchment
Relevancy
Reward
Knowledge
MIS/IS/IT/ICT:
Internet/ Data mining/
CRM …
TM -3
Questions from Customers …
Your customer asks:
We are promoting our products, tell me …
Solution …
NEW Economy (1994-2000)
How can INTERNET save (help) us?
Post Economy (2001-2008)
Where are our customers?
How can we contact them?
TM -4
The Evolutions of Economy
Based on
OLD
Economy
NEW Economy
Post Economy
(1994-2000)
(2001-2008)
Product/Service
Information/
Internet
Knowledge
Time to market/
Site visitation
Wallet share/
Profit
Measurement Market share
of success
Focus
Economies of Scale/ Technology
Efficiency
Improvement
Retaining customers/
Win service
N
TM -5
Four Important Entities for a
Successful Enterprise
• Capital
• Technical
• Human
（资本）
（技术）
（人才）
• Information
（信息）
TM -6
Organizational Ware
Strategy
HW
Structure
Organizational
Ware
SW
Culture
N
TM -7
Essentials for a Successful Enterprise
competition
structure/
culture
Value proposition
1. Business model
Business landscape
Internal/
External
fulfill
2. Core competencies
Strategic intent
Analysis
(Porter, SWOT)
3. Execution
(processes?)
Technology
H/R
Management
Process
Finance
…
future positioning
Strategy
Corporate strategy
•Positioning on product/market
Business strategy
•Differentiation/choice of
competitive advantage
Functional strategy
IT Role?
Positioning
•Competitive posture
Industry characteristics，
Market growth，
Demand characteristics，
Barrier of entry，etc.
N
TM -8
Major Issues for the Next
Society
1. Internationalization
4I + 1K
2. Technology
Internationalization
Integration
Innovation
Information
and
Knowledge
3. Population
TM -9
Three Themes …
Three themes are of interest/important to the
business professionals:
1. Enterprise systems
Software packages designed to provide complete integration of an
organization’s business processing systems and all related data.
2. E-Business
The application of electronic networks (including the Internet) to undertake
business processes between organizations and either individuals or other
organizations.
3. Information Technology
It encompasses any hardware, software, or communication technology that
might be adopted by an organization to support or control a business
process, enable management decisions, or provide a competitive advantage.
N
TM -10
PORTER’S FIVE COMPETITIVE
FORCES MODEL
Threats
NEW
MARKET
ENTRANTS
Internal Forces
1.customer focus
2.communication
3.core competencies
4.complexity
5.quality
SUPPLIERS
THE FIRM
SUBSTITUTE
PRODUCTS
& SERVICES
TRADITIONAL
COMPETITORS
Bargaining power
CUSTOMERS
N
Dr. Chen, The Trends of the Information Systems Technology
TM -11
Competitive Force Model
Entry barriers
Economies of scale
Proprietary product differences
Brand identity
Switching cost
Capital requirements
Access to distribution
Government policy
Expected retaliation
Suppliers
New entrants
Threat of
new entrants
Industry
competitors
Bargaining power
of buyers
Bargaining power
of suppliers
Determinants of supplier power
Importance of volume to supplier
Presence of substitute inputs
Switching cost ...
Determinants of substitution threat
Relative price/performance of substitutes
Switching cost…
Intensity
of rivalry
Rivalry Determinants
Industry growth
Brand identity
Switching cost….
Buyers
Determinants of buyer power
Bargaining Leverage Price Sensitivity
Buyer volume
Brand identity
Switching cost
Product differences
Buyer information Buyer profits ….
Threat of
substitutes
Substitutes
(Source: Porter, 1980)
N
TM -12