CHAPTER ONE

MANAGEMENT INFORMATION
SYSTEMS
BUSINESS
DRIVEN MIS
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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
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SECTION 1.1
BUSINESS
DRIVEN MIS
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LEARNING OUTCOMES
1. Describe the information age and the
differences between data, information,
business intelligence, and knowledge
2. Identify the different departments in a
company and why they must work together to
achieve success
3. Explain systems thinking and how
management information systems enable
business communications

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

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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

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

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

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Information
Information - Data converted into a meaningful
and useful context

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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
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Knowledge
Knowledge - Skills, experience, and
expertise coupled with information and
intelligence that creates a persons
intellectual resources
Knowledge worker Individual
valued for their ability to interpret and
analyze information

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THE CHALLENGE:
DEPARTMENTAL COMPANIES

Common Departments Working Independently

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THE SOLUTION: MANAGEMENT

INFORMATION SYSTEMS

Common Departments Working Interdependently

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THE SOLUTION: MANAGEMENT

INFORMATION SYSTEMS

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THE SOLUTION: MANAGEMENT

INFORMATION SYSTEMS

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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
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THE SOLUTION: MANAGEMENT

INFORMATION SYSTEMS
Management Information Systems (MIS)
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

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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
organizations knowledge
Chief privacy officer (CPO) Responsible for
ensuring the ethical and legal use of
information

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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

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SECTION 1.2
Business
Strategy
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LEARNING OUTCOMES
4. Explain why competitive advantages are
temporary
5. Describe Porters Five Forces Model and
explain each of the five forces
6. Compare Porters three generic strategies
7. Demonstrate how a company can add value
by using Porters value chain analysis

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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

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IDENTIFYING COMPETITIVE
ADVANTAGES

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IDENTIFYING COMPETITIVE
ADVANTAGES
Competitive advantage A product or service
that an organizations 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

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IDENTIFYING COMPETITIVE
ADVANTAGES
Competitive intelligence The process of
gathering information about the competitive
environment to improve the companys ability to
succeed
Competitive intelligence tools
Porters Five Forces Model
Porters Three Generic Strategies
Porters Value Chain Analysis

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THE FIVE FORCES MODEL

EVALUATING INDUSTRY ATTRACTIVENESS

Porters Five
Forces Model

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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

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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

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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

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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

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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

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Analyzing the Airline Industry

Perform a Porters 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

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THE THREE GENERIC STRATEGIES

CHOOSING A BUSINESS FOCUS

Porters Three Generic Strategies

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THE THREE GENERIC STRATEGIES

CHOOSING A BUSINESS FOCUS

Porters Three Generic Strategies

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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

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VALUE CHAIN ANALYSIS

EXECUTING BUSINESS STRATEGIES
Primary value activities
Inbound logistics - Acquires raw materials and
resources, and distributes
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
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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
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VALUE CHAIN ANALYSIS

EXECUTING BUSINESS STRATEGIES

Porters Value Chain

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VALUE CHAIN ANALYSIS

EXECUTING BUSINESS STRATEGIES

Value Chain and Porters Five Forces Model

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LEARNING OUTCOME REVIEW

Now that you have finished the chapter
please review the learning outcomes in
your text

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