Introduction to MIS
Strategic Analysis
Introduction to MIS
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Strategy
Connections to
suppliers and
customers.
Competition
Become the best firm in the
industry. Block the
competitors by keeping your
customers happy.
Introduction to MIS
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Outline
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The Competitive Environment
External Agents
IS Techniques to Gain Competitive Advantage
The Search for Innovation
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Research
Engineering and Design
Manufacturing
Logistics and Supply
Marketing
Sales and Order Management
Service
Management
Costs and Dangers of Strategies
Operations, Tactics, Strategy
E-Commerce Failures
Cases: Travel Industry
Appendix: Solving Business Problems and Cases
Introduction to MIS
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Competition
Competition is increasing in many industries, but it is
particularly intense in the restaurant and fast food industry.
Competition encourages firms to hold down costs, provide
more variety, and provide new and better service to
customers.
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Porter’s Five Forces Model
Threat of
New Entrants
Bargaining Power
of Suppliers
Rivalry Among
Existing Competitors
Bargaining Power
of Buyers
Threat of Substitute
Products or Services
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parts
supplier
parts
supplier
warehouse
supplier
supplier
tool
manufacturer
Manufacturer
wholesaler
wholesaler
distributor
Production
Chain
warehouse
supplier
workers
retail store
parts
supplier
distributor
retail store
distributor
retail store
retail store
Consumers
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Methods to Gain
Competitive
Advantage
Barrier
To Entry
Supplier
Supplier
Supplier
Ties To
Suppliers
Decreased
Costs
Firm
Control Of
Distribution
Improved
Quality
Rival
Wholesale
Ties To
Customers
Innovation and
Differentiation
Consumer
Consumer
Consumer
Increased
Switching Costs
Consumer
Consumer
Introduction to MIS
Consumer
Consumer
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Barriers to Entry
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Economies of Scale (size)
Economies of Scope (breadth)
Product Differentiation
Capital requirements
Cost Disadvantages (independent of size)
Distribution Channel Access
Government Policy
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Competitive Advantage
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Barriers to Entry
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Consumers incur learning
and data transfer costs.
Baxter Healthcare
Monitoring production lines
and analyzing data. Digital
Equipment Corp.
Value Chain
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Introduction to MIS
Add new features or create
new products with IT.
Federal Express & Merrill
Lynch
Quality Management
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IS to cut costs. Wal-Mart
Product Differentiation
Prevent others from entering
the industry. Napster
Switching Costs
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Lower Production Costs
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Distribution Channels
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Additional costs of creating
an information system.
People’s Express
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Expanding forward or back
the value chain to find
greater profits. Boeing
Information Systems
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Value Chain
Firm Infrastructure
Human Resources Management
Technology Development
Procurement
Inbound
Logistics
Operations
Introduction to MIS
Outbound Marketing
Logistics & Sales
Service
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Process Innovation
Suppliers
Production
Logistics/
Supply
Research
Engineering
and Design
Management
Manufacturing
Marketing
Customer
Service
Sales and
Order
Management
Customers
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Developing Strategies
Corporate Strategy Development
monitor
rivals
• expectations • strengths
• goals
• weaknesses
• rivalry
• opportunities
• critical success factors
Market Measures
- Market share
- Concentration
- Growth
- Profitability
Performance Measures
- ROA
- ROI
- EPS
- Growth
- Subjective
Business Strategies
and Priorities
Process Changes
Data Needs
IS Changes
- Cost
leadership
- Differentiation
- Innovation
- Linkages
- Re-engineering
- Organization
Decentralization
System
Development
& Implementation
Business Operations & Rules
Existing Data and IS
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Search for Innovation
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Research
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Analysis & modeling, project
management, work group
support, databases, decision
support.
Manufacturing
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Engineering & Design
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CAD/CAM, testing, networks,
work group support.
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Logistics & Supply
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Introduction to MIS
Mass customization, links to
customers & suppliers,
quality monitoring, expert
systems for maintenance,
production databases,
business integration.
Just-in-time linkages,
forecasts, models, links for
design, transaction
processing.
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Search for Innovation
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Marketing
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Frequent buyer database,
target market & media
analysis, survey design and
analysis, multimedia
promotion design, links to
customers and designers.
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Service
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Management
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Sales & Orders
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Portable computers for
sales, ES for order
customization, work group
tools for customer support.
Phone support, GIS locators,
scheduling, ES diagnostics,
databases.
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EIS, e-mail, bulletin boards,
decision support systems,
personal productivity tools,
work group support
Links to service providers
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Introduction to MIS
Accountants
Consultants
Lawyers, . . .
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Research
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Analysis and models
Statistical analysis of data
Project management and budgeting
Work-group collaboration and communication
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Engineering and Design
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CAD/CAM
Integrated design database
Production databases and model testing
Expert Systems for manufacturability
Work group communication
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Manufacturing
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Links to customers
Links to suppliers
Mass customization
Robotics
Diagnostic Expert Systems
Quality monitoring and control
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Logistics and Supply
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Just-In-Time Inventory and EDI
Configuration and design
Searching for availability, pricing, . . . networks
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Marketing
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Frequent buyer databases
Point-of-Sale and trends
Statistical analysis of data
Geographic Information Systems
Links to external marketing agencies
Multimedia development of promotions
Internet
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Sales and Orders
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Sales force automation, hand-held computers
Customer Internet access
Expert Systems for product and option selection
Expert Systems for configuration and shipping
Front-line support: ES, e-mail, work groups
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Service
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Portable computers for service anywhere
Databases (e.g., customer service)
Location monitoring of service personnel
Product internal, automatic diagnostics
Expert System diagnostic tools
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Management
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Executive Information Systems
Simulation (and rivalry games)
Links to external partners (accounting, law, . . .)
Electronic conferencing
Work group communication, e-mail
Standardization, Modularization, Franchises
Knowledge Workers
Client-server instead of hierarchical computing
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Strategy Analysis
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Product Differentiation
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Skills & Resources
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Cost Leadership
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Strong marketing.
Product engineering.
Basic research.
Distribution channel
cooperation.
Skills & Resources
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Organization Requirements
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Internal coordination.
Incentives for innovation.
Resources to attract skills.
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Risks
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Competitors imitate.
Customers do not accept.
Cost is too high.
Introduction to MIS
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Continued capital
investment.
Process engineering.
Continuous quality
improvement.
Tight supervision of costs.
Products designed for low
cost.
Low cost distribution.
Organization Requirements
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Tight cost controls.
Frequent control reports.
Highly structured org.
Incentives based on
qualitative measures.
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Strategy Analysis
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Cost Leadership
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Risks
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Competitors imitate.
Technology changes.
Lose production or
distribution advantage.
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Customer-Supplier Links
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Skills & Resources
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Organization Requirements
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Flexibility to respond to
customers.
Service culture.
Ability to adapt to
emergencies.
Risks
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Introduction to MIS
Influence with partners
Communication channels
Standards or agreements.
Security threats.
Changing standards.
Competitors copy with
more/better links.
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Dangers:
Capital Cost
Money for research
Money for information technology
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Competition
Follows
IS Costs
You
Time
Transaction
Processing
Network & link
sales people
Experimental
technology
& global links
IS Costs
Rival
Time
Network & DSS
Introduction to MIS
Link to suppliers
& customers
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Changing Industry &
Government Intervention
New technology
New services
Customer
Customer
Customer
Industry 1
(expands into
industry 2)
Customer
Customer
Industry 2
(new
competitor)
Same technology
Customer
Customer
Introduction to MIS
Customer
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Need to control access.
Need to worry about network
interceptions and hackers.
Security
Production Firm
Hackers
or competitors
Security
firewall
Data we wish to share.
Data we want to protect.
Introduction to MIS
Customer
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E-Commerce Failures
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Hundreds of dot-com firms failed in 2001 and 2002
Most relied on pure Internet revenue. Outsourcing
production and shipping.
Most relied on advertising revenue—often revenue
from other dot-com firms.
Many believed in the importance of being first to
market and becoming the biggest, best-known firm in
a niche industry.
Many believed that it was not necessary to make a
profit on sales. Money from advertising and stock
sales would be sufficient to keep the firm alive until the
world changed.
Most were wrong.
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Cases: Travel Industry
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Cases: The Sabre Group
American Express
www.sabre.com
www.americanexpress.com
What is the company’s current status?
What is the Internet strategy?
How does the company use information technology?
What are the prospects for the industry?
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Appendix: Solving Problems
Solve the right problem
Choose the right tools
Divide the system
Make decisions
Consider consequences
Cause
Feasibility
Input
Process
Output
Customer response
Employee response
Test the system
Plan implementation
Introduction to MIS
Detail
Organization
Schedule
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Appendix: Evaluating Projects
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Does the project fit with business goals and management style?
Does the project improve the competitive position of the firm?
How long will any competitive advantage last?
What value or reward is created by the system?
What level of technology is needed to create the system?
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experimental
leading edge
established
old-hat
What is the probability of technical success?
What is the probability of commercial success?
What are the costs involved in creating the system?
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Monetary
Time
Additional capital, marketing and management
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Appendix: Good Business Analysis
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Identify the root causes of problems.
Solid grasp of strategic components.
Identify the critical success factors.
Evaluate the financial implications.
Thorough discussion of implementation.
Realistic analysis of expected results.
Effect on future growth and continued development.
Effect on human resources.
Understanding of target markets.
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Solving Business Problems & Cases
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Solve the right problem
Choose the right tools
Divide the system
Make decisions
Consider the consequences
Test the system
Plan implementation
Case hints
Introduction to MIS
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Appendix: Organization of Analysis
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Problem description
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Plan
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Identify most important problems
Identify causes of problems
Describe the new system
Implementation plan
Contingency plan
Advantages
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Show how your plan solves the problems
Explain additional benefits or opportunities
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