MIS
Long tail marketing
Refers to the ability of firms to profitably market goods to very small online audiences, largely because of the lower costs of reaching very small market segments (people who fall into the long tail ends of a Bell curve).
Strategies for dealing with competitive forces:
Strengthen customer and supplier intimacy Follow one of Porter's Three Generic Strategies to market your product(s) or service(s) Cost leadership Product differentiation Focus strategy
levels of management in pyramid
senior management- long range strategic decisions about producs and services as well as ensures financial performance of the firm. middle management- carries out programs and plans of senior management. scientists, engineers, architects (also known as knowledge workers) operational management- responsible for monitoring daily activities of business. Production and service workers, data workers
What is a business?
Every business can be seen as a collection of business processes, some of which are part of larger encompassing processes.The business process (paying creditors) comes from a functional area (finance).
Why is operational effectiveness not enough to sustain a competitive advantage in the market?
Operational effectiveness is now something of a commodity. Since every business is becoming more operationally effective due to advanced in IT, a company must find another market niche in order to stake out a competitive advantage. However, a company could be operationally effective in a unique way that is difficult to duplicate. Ex: Walmart, Southwest Airlines, Ikea, etc.
Proprietary and infrastructural technologies. How are they different?
Proprietary- technologies unique to an entity. Useful if only one company has them. "Intellectual property." Infrastructural- Useful if many companies have it. Ex: Ability to ship on railroad.
What is strategy? Explain in terms of fit among a company's activities
Strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match. Strategic fit among many activities is fundamental not only to competitive advantage but also to the sustainability of that advantage. Use either simple consistency fit (overall strategy with each activity) or optimization of effort (max effort with restocking f.e.) for strategy
Enterprise applications
Systems that can coordinate activities, decisions, and knowledge across many different functions, levels, and business units in a firm. Include enterprise systems, supply chain management systems, and knowledge management systems.
Globalization challenges and opportunities
Thomas Friedman wrote a book declaring that the world is now "flat" meaning that the internet and global communications have reduced the economic and cultural advantages of developed countries. "globalization" presents challenges and opportunities for business firms. Some globalization opportunities are imports and exports for the United States. More than 33% of US economy resulted in foreign trade. Globalization challenges include losing jobs to other countries in the United States which causes unemployment (manufacturing jobs).
Behavioral targeting
Tracking the click- streams (history of clicking behavior) of individuals across multiple Web sites for the purpose of understanding their interests and intentions, and exposing them to advertisements which are uniquely suited to their interests.
Digital markets
price discrimination- when companies charge different groups or segments of consumers a different price for the same product dynamic pricing- companies can more easily change the price of a good depending on the demand and supply characteristics or the consumer and/or the supplier disintermediation- the fact that when you remove intermediate distributors from your distribution chain, the price of your good will decrease (Manufacturer to Distributor to Retailer to Consumer $48.50, Manufacturer to Retailer to Consumer $40.34, Manufacturer to Customer $20.45)
Electronic data interchage (EDI)
the direct computer- to- computer exchange between two organizations of standard business transactions, such as orders, shipment instructions, or payments.
What is a business process?
- Workflows of material, information, knowledge - Sets of activities, steps - May be tied to functional area or be cross-functional Business process: Unique ways in which organizations coordinate and organize work activities, information, and knowledge to produce a product or service.
Business drivers of IS (examples):
1) Operational excellence- Walmart. The way they operate their warehouses and shipping. 2) New products, services, and business models- Apple 3) Customer and supplier intimacy- Starbucks, not just buy the coffee but to be a part of the Starbucks 'atmosphere'. Another example is the Mandarian Oriental hotel- exmplify the use of information systems and technologies to achieve customer intamacy. They keep track of room temp, television programs, check in time, and store the data in a large repoistry. 4) Improved decision making- using technology and information system to get real time date from the marketplace when making decision. Verizon uses web based digital dashboard to provide managers with info on customer complaints etc. They also give feedback on line outages from storms, and repair efforts. 5) Competitive advantage- doing things better than your competitors. For example charge less for superior products. Also respond to customers and suppliers in real time which all add up to higher sales and profits that compeitiors cant match. Apple, Walmart, and UPS are industry leaders. 6) Survival- When citibank first started ATM machines every other competitor got the machine to keep up.
Net marketplace
A single digital marketplace based on Internet technology linking many buyers to many sellers.
revenue model for e commerce
Advertising Model - generate revenue by attracting a large audience of visitors who can then be exposed to advertisements by clients who pay to have their ads placed there (google, facebook, etc) Sales Model -generate revenue by selling goods, information, whatever your product happens to be (amazon, other online retailers) Subscription - the website charges a subscription fee for access to most/all of its content on an ongoing basis (good example is newspaper websites) Free/Freemium Model - basic services or access to content is offered for free, while they charge a premium for advanced access and features (Pandora, Flickr, etc) Transaction Fee Model - company receives a fee for enabling or executing a transaction (eBay, online stock trading companies like ETrade, etc) Affiliate Model - Affiliate Web sites send visitors to other web sites in return for a referral fee or percentage of the revenue from any resulting sale that referral creates (travel web sites like travelocity, Kayak, etc)
Why are information technologies becoming a commodity?
As more and more companies realise that I.T is a necessity, they integrate the systems into their business operations. Competitive edge previously gained from having I.T is gone because of widespread use, thus making I.T a commodity.
Impacts of IT
IT should result in decline of middle managers. reduces transaction costs, reduces size of business, can also reduce internal management costs, reduce agency cost because becomes easier for managers to oversee a greater number of employees, flattens organizations, managers receive more info so fewer managers required
What is the difference between IT and IS?
Information technology- consists of all the hardware and software that a firm needs to use in order to achieve its business objectives Information systems- Information systems contain organizations and management too. not just technology. The whole system. MIS
What is an intranet? What is an extranet?
Intranet: Internal company websites accessible only by employees Extranet: Company Websites accessibe externally only to vendors and suplliers. Often used to coordinate supply chain.
Dimensions of an information system:
People- also management. job is to make sense out of the many situations face by organizations, make decision, and formulate action plans to solve organizational problems. Technology- foundation on which the firm can build its specific information systems. Each organization must carefully design its IT so it has technology services that it needs for your information system Organization- organized as a pyramid structure. Lower level consists of operation management- monitoring daily activities (production and service workers, data workers), middle management- carries out the programs and plans of senior management (scientists and knowledge workers), senior management- makes long range strategic decisions about products and services as well as ensures financial performance of the firm.
Systems for the different levels of management
TPS- transaction process system- computerized system that performs and records the daily routine transactions necessary to conduct business. (hotel reservation, payroll, shipping) MIS (reporting)- management information system- provides middle managers with reports on the orgainzations current performance. used to monitor and control the business and predict future performance. DSS (model driven and data driven DSS)- decision support systems- support non routine decision making. focus on problems that are unique and rapidly changing. ask questions like "what if we double sales next month". DSS uses info from external sources like current stock price or competitor prices. ESS- executive support systems- help senior management make decision. address non routine decisions requiring judgment, evaluation, no agreed on procedure for arriving at solution.
Private industrial network
Web- enabled networks linking systems of multiple firms in an industry for the coordination of trans- organizational business processes.
The Value Web Model
collection of indepndent firms that use IT to coordinate their value chains to produce a product or service for a market collectively.
switching cost
cost of switching from one product to a competing product.
primary and support
primary- directly related to production and distribution of the firms products and services, create value for customer. include production, operation, receiving secondary- make delivery of primary activities possible and consist of organization infrastructure (administration and management), human resources (employee recruiting, hiring, and training), technology, and procurement (purchasing input)
Information system
set of interrelated components that collect, process, store, and distribute information to support decision making and control in an organization.
Disruptive technology
substitute product that performs as well or better than what is currently produced.
Business functions
manufacturing and production, sales and marketing, human resources, finance and accounting.
Define marginal cost for digital goods
marginal cost is the price it costs to produce one more unit of a particular product - for digital goods, marginal cost is virtually zero. It costs a lot to produce the first unit, but after investing in the development and innovation of the first unit, it is easy to copy - think of music files or software
What makes e-commerce different?
ubiquity- e-commerce businesses are accessible at any time from virtually any location- eliminates these variables in the buying process Global reach- Because the Internet is accessible globally, a business doesn't have to have a store in shanghai for someone there to buy its product - they can view and purchase remotely anywhere in the world Universal Standards- the technical standards for conducting e-commerce are the same around the world - these standards lower market entry costs and reduce search costs for consumers Richness- the complexity and content of a message - the Web makes it possible to deliver rich messages simultaneously to large numbers of people Interactivity- allows an online merchant to engage a consumer in ways similar to a face-to-face experience but on a massive global scale - two-way communication enabled Information Density- the total amount and quality of information available to all market participants - makes prices and costs more transparent Personalization/Customization- personalization is when companies can target their marketing messages to specific individuals by tailoring the message to their name, interests, and past purchases (ads unique to your viewing history or 'likes' on facebook). customization is when you change the delivered product or service based on a user's preferences (customizing nike shoes on their website, or customizing your new laptop with bigger processors or more memory on Dell's). Social Technology- allows users to share content like videos, pictures, and text. Empowers users to create and distribute their own content
effectiveness
using resources to get the best quality product/service and high customer satisfaction
efficiency
using the lowest amount of resources in a certain amount of time
classification of e-commerce enterprises and business model
B2C- shopping online. B2B- sales of goods and services to other business. C2C- ebay business model Portal- Such as Google, Bing, Yahoo are primarly "gateways" to the internet. Today they are used as a destination website where users start their web searching and linger to read news, find entertainment, meet other people, and be exposed to advertising. They generate large audiences, charge advertisers for ad placement, and collect referral fees. E-Tailer- They are online retail sotres such as Amazon. Customers only need to connect to the Internet to check their inventory and place an order. E-tailer is made to provide convience, low cost shipping 24/7, and offers a wide variety of selections for a consumers choice. Content Provider- Content Providers distibute information such as digital video, music, photos, text, and artwork on the web. The value of this is so there is a wide variety of content online that can be purchased inexpensivly that can also be viewed on several computers or smartphones. Transaction Broker- Websites that process transactions for consumers are typically handled in person, by phone, or by mail to the tranasaction brokers. The brokers proposition is about saving money and time, while providing an extradoingary inventory of finical products and travel packages in one location. Market Creator- They create a digital enviorment were buyers and sellers can meet, display products, search for products, and establish prices. Market creators want to provide a platform where sellers can easily display their wares and purchasers can buy directly from sellers. Service Provider- Service providers offer services online. One can purchase 2.0 applications, photo sharing, and online sites to backup storage. Software can rarely be found within a CD in a box, mostly people subscribe to a service online rather then purchasing from a retailer. Community Provider- They create digital online environment where people with similar interest can transact by sharing photos, videos, and can even play out fantasies by adopting online personalities called avatars.
Distinction between data, information and knowledge
Data- Streams of raw facts representing events occuring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use. Information- Data that has been shaped into a form that is meaningful and useful to human beings. Knowledge- Concepts, experience, and insight that provide a framework for creating, evaluating, and using information.
What is e-commerce? What is e-business?
E-commerce: the part of e-business that deals with the buying and selling of goods and services over the Internet. It also encompasses activities supporting those market transactions, such as advertising, marketing, customer support, security, delivery, and payment. E-business: the use of digital technology and the Internet to execute the major business processes in the enterprise. Includes activities for the internal management of the firm and for coordination with suppliers and other business partners.
Michael Porter's Five Competitive Forces Model. Explain each force. How could you limit their power over an organization? Define: customer lock-in, switching cost
customer- company depends on customer. They have the power because they can swith to your competitors product supplier- significant impact on firm profits. more suppliers a firm has more control on price quality, etc. traditional competitors- share market space with you. competitors making more efficient way to produce products and better services. new market entrants- new companies entering marketplace. sometimes entry is difficult in other markets its simple. substitute products and services- if your prices get high customers will find substitutes. red bull for coffee You can limit the power of traditional competitors, new market entrants, and substitute products and services by creating and maintaining a strong competitive advantage over them. You can limit supplier's control by having multiple suppliers instead of just one, and you can limit customer's control by increasing switching costs, maintaining competitive advantage, and pushing your competitors out of the picture, creating less choice for the consumer.
Digital dashboard
displays all of a firm's key performance indicators as graphs and charts on a single screen to provide one- page overview of all the critical measurements necessary to make key executive decisions.
E-business. How is e-business different from e-commerce?
e business- use of digital technology and internet to execute the major business processes in the enterprise e commerce- deals with buying and selling of goods and services over the internet
Types of enterprise applications. How are they different? What is the main focus of each one of them?
enterprise system (ERP)- integrate business processes in manufacturing and production, finance and accounting, etc. into a single software system supply chain management systems- help suppliers, distributors share information about orders, production, inventory levels, so they can source, produce, and deliver goods and services efficiently. customer relationship management systems- help manage relationships with customers to maximize profit, customer satisfactino
customer lock in
gaining and maintaining loyal customer relationships, by good customer-supplier intimacy and high switching costs
The Value Chain Model
highlights specific activities in business where competitive strategies can best be applied. and where information systems are most likely to have strategic impact. identifies where IT can be used most effetively
