CHAPTER ONE
McGraw-Hill/Irwin
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

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
1-2

COMPETING IN THE
INFORMATION AGE
 The core drivers of the information age
• Data
• Information
• Business intelligence
• Knowledge
1-3

THE CHALLENGE:
DEPARTMENTAL COMPANIES
Common Departments Working Independently
1-4

1-5
THE SOLUTION: MANAGEMENT
INFORMATION SYSTEMS
Common Departments Working Interdependently

1-6
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

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
1-7

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
1-8

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 impact its market share by being first to market with a competitive advantage
1-9

1-10
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

THE FIVE FORCES MODEL –
EVALUATING INDUSTRY
ATTRACTIVENESS
Porter’s Five
Forces Model
1-11

THE THREE GENERIC STRATEGIES
CHOOSING A BUSINESS FOCUS
Porter’s Three Generic Strategies
1-12

1-13
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

VALUE CHAIN ANALYSIS –
EXECUTING BUSINESS STRATEGIES
Porter’s Value Chain
1-14

VALUE CHAIN ANALYSIS –
EXECUTING BUSINESS STRATEGIES
Value Chain and Porter’s Five Forces Model
1-15