1

Management Information
Systems: Business Driven MIS
The Tony Fernandes School of Business, UC-Cambodia
Course BUS202: Information Systems in Business
Reference Book : Business Driven Information Systems, Paige Baltzan,
McGraw-Hill/Irwin, 2014.
Instructor’s name: Veasna Kim
Academic Year: 2023-2024
 Business Driven MIS BUSINESS STRATEGY

➢ Competing in the ➢ Identifying

Competitive
Information Age
Advantages

Outline ➢ The Challenge:

Departmental Companies
➢ The Five Forces Model
Evaluating Industry
➢ The Solution: Management Attractiveness
➢Information Systems ➢The Three Generic
Strategies Choosing a
Business Focus
➢ Value Chain Analysis
Executing Business
Strategies
 The World Is Flat: Thomas Friedman
➢ Globalization 1.0 started when Christopher
Columbus discovered the world is round and the
world shrank from large to medium.
➢ Globalization 2.0 began around 1800, during the
Industrial Revolution, when the world went from
medium to small.
➢ Globalization 3.0 began in early 2000, removing
distance from the business equation, and the
world has gone from small to tiny.
▪ Globalization 3.0 is the ways that Technology has
eliminated some of the economic and cultural
advantages developed countries enjoy, making
the world a level playing field for all participants.
In this era, people of all colors from the four
corners of the world will dominate business.
 Section 1.1
INFORMATION SYSTEMS IN
BUSINESS
 Learning Outcomes

Describe the information age and the differences among

1.1 data, information, business intelligence, and knowledge

Identify the different departments in a company and

1.2 why they must work together to achieve success.

Explain systems thinking and how management

1.3 information systems enable business communications.
 COMPETING IN THE INFORMATION AGE

➢ Fact is the confirmation or validation of an event or object.

➢ Information age is a historical period that began in the mid-20th century. It is characterized by a
rapid shift from traditional industries, as established during the Industrial Revolution, to an
economy centered on information technology.
• Pushing a button people can find out anything, from anywhere, at any time.
• Infinite quantities of facts are widely available to anyone who can use a computer.
• The impact of information technology on the global business environment is equivalent to the
printing press’s impact on publishing and electricity’s impact on productivity.
• College student startups were mostly unheard of before the information age.
➢ Variable is a data characteristic that stands for a value that changes or varies over time.
➢ Knowledge workers are individuals valued for their ability to interpret and analyze information.
The Differences among Data, Information, Business
Intelligence, and Knowledge
Tony’s Snack Company Data
Tony’s Wholesale Company

Tony’s Data Sorted by Customer “Walmart” and Sales Representative “Roberta Cross”

Information Gained after

Analyzing Tony’s Data
 THE CHALLENGE: DEPARTMENTAL COMPANIES

Companies are typically organized

by department or functional area such as:
 THE CHALLENGE: DEPARTMENTAL COMPANIES
Departments Working Together

For an organization to succeed, every

department or functional area must work
together sharing common information and
not be a “silo.”

Information technology can enable

departments to more efficiently and effectively
perform their business operations.
 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS
Successful companies operate cross-functionally, integrating the operations of all
departments. Systems are the primary enabler of cross-functional operations.

▪ A system is a collection of parts that link to

achieve a common purpose.

Different Types of Goods and Services

 THE CHALLENGE: DEPARTMENTAL COMPANIES
Production is the process where a business takes raw materials and processes them
or converts them into a finished product for its goods or services.
Productivity is the rate at which goods and services are produced based upon total output
given total inputs.

Input, Process, Output Example Overview of Systems Thinking

 THE SOLUTION: MANAGEMENT INFORMATION SYSTEMS

▪ Systems thinking is a way of monitoring the entire system by viewing multiple inputs being processed or
transformed to produce outputs while continuously gathering feed-back on each part.
▪ Feedback is information that returns to its original transmitter (input, transform, or output) and
modifies the transmitter’s actions. Feedback helps the system maintain stability.
▪ Management information systems (MIS) a general name for the business function and academic
discipline covering the application of people, technologies, and procedures to solve business problems.
o MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources
 THE CHALLENGE: DEPARTMENTAL COMPANIES

MIS Department Roles and

Responsibilities

MIS as a department is a relatively new While many companies may not have a different
functional area, having been around formally for individual for each of these positions, they must
about 40 years. Job titles, roles, and have top managers who take responsibility for all
responsibilities often differ from company to these areas.
company, but the most common
are
displayed
Section 1.2
Business Strategy
 Learning Outcomes

1.4 Explain why competitive advantages are temporary.

1.5 Describe Porter’s Five Forces Model and explain each of the five forces.

1.6 Compare Porter’s three generic strategies

Demonstrate how a company can add value by using

1.7 Porter’s value chain analysis.
 IDENTIFYING COMPETITIVE ADVANTAGES

• To survive and thrive an organization must create a

competitive advantage
• 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
 IDENTIFYING COMPETITIVE ADVANTAGES
• Competitive advantages are important for an organization but it is even
more important to understand that they are typically temporary since
competitors are quick to copy competitive advantages
• United was the first airline to offer a competitive advantage with its frequent
flyer mileage (this first-mover advantage was temporary)

• Sony had a competitive advantage with its portable stereo systems (this first-
mover advantage was temporary)

• Microsoft had a competitive advantage with its unique Windows operating

system
• Does Microsoft still has a competitive advantage with its Windows operating system?
 IDENTIFYING COMPETITIVE ADVANTAGES

Competitive Advantage
Feature of a product or service on which customers
place a greater value than they do on similar
offerings from competitors. It provide the same
product or service either at a lower price or with
additional value that can fetch premium prices.

Competitive Intelligence
the process of gathering information about
the competitive environment, including
competitors’ plans, activities, and products, to
improve a company’s ability to succeed.

Duplicate Competitive Advantages

include acquiring the new technology,
copying business processes, and hiring away
employees.
 IDENTIFYING COMPETITIVE ADVANTAGES

• Organizations watch their competition through environmental scanning

• Environmental scanning – the acquisition and analysis of events and trends in the
environment external to an organization
• Frito-Lay does not just send its representatives into grocery stores to stock shelves—they carry
handheld computers and record the product offerings, inventory, and even product locations of
competitors.
• This information is used to gain business intelligence on everything from how well competing
products are selling to the strategic placement of its own products.

• Three common tools used in industry to analyze and develop competitive

advantages include:
• Porter’s Five Forces Model
• Porter’s three generic strategies
• Value chains
 THE FIVE FORCES MODEL—EVALUATING INDUSTRY
ATTRACTIVENESS

Porter’s Five Forces Model

Five Forces Model

Porter’s Five Forces Model analyzes the
competitive forces within the environment in
which a company operates, to assess the
potential for profitability in an industry
 Buyer Power
• Buyer power – high when buyers have many choices
of whom to buy from and low when their choices are
few

• One way to reduce buyer power is through loyalty

programs
• Loyalty program – rewards customers based on the
amount of business they do with a particular organization
 Supplier Power

• Supplier power – high when buyers have few choices of

whom to buy from and low when their choices are many
• Supply chain – consists of all parties involved in the
procurement of a product or raw material
 Supplier Power
• Organizations that are buying goods and services in the supply chain can
create a competitive advantage by locating alternative supply sources
(decreasing supplier power) through B2B marketplaces

• Business-to-Business (B2B) marketplace – an Internet-based service that

brings together buyers and sellers
• Two types of (B2B) marketplaces
• Private exchange – single buyer posts needs and opens bidding to any
supplier who would care to bid
• Reverse auction –increasingly lower bids are solicited from
organizations willing to supply product or service at a lower price
 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
• Switching cost – costs that can make customers reluctant to
switch to another product or service
• Examples??
 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 product or service that
customers have come to expect and must
be offered to compete and survive
• Example of high and low??
 Rivalry Among Existing Competitors
• Rivalry among existing competitors – high when competition is
fierce in a market and low when competition is more complacent

• Although competition is always more intense in some industries

than in others, the overall trend is toward increased competition in
just about every industry
 Analyzing the Airline Industry
Strong and Weak Examples of Porter’s Five Forces Five Forces Model in the Airline Industry
 Analyzing the Airline Industry
Porter’s Five Forces Model analyzes the competitive forces within the environment in which a company
operates, to assess the potential for profitability in an industry.
➢ Buyer power is the ability of buyers to affect the price they must pay for an item.
➢ Supplier power is the suppliers’ ability to influence the prices they charge for supplies (including materials, labor,
and services).
➢ Threat of substitute products or services is high when there are many alternatives to a product or service and low
when there are few alternatives from which to choose.
➢ Threat of new entrants is high when it is easy for new competitors to enter a market and low when there are
significant entry barriers to entering a market.
➢ Rivalry among existing competitors is high when competition is fierce in a market and low when competition is
more complacent.
THE THREE GENERIC STRATEGIES CHOOSING A BUSINESS FOCUS

Organizations typically follow one of Porter’s three generic

strategies when entering a new market:
 Examples of Porter’s Three Generic Strategies
Broad market and low cost:
Walmart competes by offering a broad range
of products at low prices. Its business strategy
is to be the low-cost provider of goods for the
cost-conscious consumer.

Broad market and high cost:

Neiman Marcus competes by offering a broad
range of differentiated products at high prices.
Its business strategy offers a variety of
specialty and upscale products to affluent
consumers.

Narrow market and low cost:

Payless competes by offering a specific
product, shoes, at low prices. Its business
strategy is to be the low-cost provider of
shoes. Payless competes with Walmart, which
also sells low-cost shoes, by offering a far
bigger selection of sizes and styles.

Narrow market and high cost:

Tiffany & Co. competes by offering a
differentiated product, jewelry, at high prices.
Its business strategy allows it to be a high-cost
provider of premier designer jewelry to
affluent consumers.
 VALUE CHAIN ANALYSIS EXECUTING BUSINESS STRATEGIES

• Once an organization chooses its strategy, it can use tools such as the value
chain to determine the success or failure of its chosen strategy

• Business process – a standardized set of activities that accomplish a specific

task, such as processing a customer’s order

• Value chain analysis– views an organization as a series of processes, each

of which adds value to the product or service
 The Value Chain
❖Primary value activities acquire raw materials
and manufacture, deliver, market, sell, and
provide after-sales services.
▪ Inbound logistics: acquires raw materials and
resources and distributes to manufacturing as
required

▪ 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 after the sale of

goods and services.
 The Value Chain
❖Support value activities support the primary
value activities. It include:
▪ 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.
❖Customers determine the extent to which each
activity adds value to the product or service
• The competitive advantage is to:
• Target high value-adding activities to further
enhance their value
• Target low value-adding activities to increase
their value
• Perform some combination of the two
 Applying IT to the Value Chain
• IT can be applied to add value to both
primary and support value activities
• Marketing campaign management system
(primary)
• Target marketing campaigns more
efficiently thereby helping to reduce costs
• Better pinpoint target market needs to help
increase sales
• HR system (support)
• More efficiently reward employees based
on performance
• Identify employees at risk of leaving their
jobs and find additional challenges or
opportunities to help retain the employees The Value Chain and Porter’s Five Forces Model
and reduce turnover costs
THANK YOU
Kim Veasna
[email protected]