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Introduction to Strategy and Finding Information on the Web - Lecture 2
Strategy
Involves changing the overall structure of the firm to give it an advantage over the competition.
Risk and Reward
Creativity
Porter’s External Agents - Customers, Suppliers, Competitors, Government
Cases: McDonald’s Rainforest Café Dave & Busters
Dave and Busters
Questions:
- 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?
Appendix: Finding Information
- Organization -
You know what you are searching for.
You have a vague idea about what you want.
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Baxter Healthcare/American Hospital Supply
Hospitals use a large amount of routine supplies such as bandages and antiseptics. Originally, they purchased them from various suppliers, held them in inventory, and distributed them throughout the hospital as they were needed. This relationship is shown in Figure 1.9. American Hospital Supply (AHS) was one of these suppliers. To gain advantage over their competitors, AHS created a new system and made an offer to the hospital managers.AHS placed computer terminals in hospital locations where the supplies were used (emergency, operating rooms, nursing stations, etc.). As shown in FIgure 1.10 these terminals were connected to the AHS computer.
As hospital personnel removed supplies, they recorded them on the terminals. The computer kept track of the amount of supplies in each location. A list would be printed at the warehouse, and drivers delivered the necessary supplies to each location in the hospital. Monthly usage statistics were sent to the hospital.
The hospital gained because the facility did not need to maintain extra inventory, which saved money and space. Fewer hospital employees were needed, because the supplies were delivered directly to the needed locations. Additionally, the hospital received detailed usage records.
To offer this service, AHS incurred higher costs --largely the cost of creating and maintaining the information system. What did AHS gain in return? As long as it was the only company offering this service, AHS gained a competitive advantage by providing a new service. Hospitals were more likely to choose AHS over the rivals. But what would happen if a competitor created in a similar system? Would the hospitals stay with AHS or switch to the rivals?
Although the answer depended on the prices, hospitals had a strong incentive to stay with AHS. They would encounter various switching cost if they chose another supplier. For example, daily operations would be disrupted while the system was changed. Employees would have to be retrained to use the new system. A rival would have to offer strong price advantages to overcome these costs.
Eventually, Baxter Healthcare, a large manufacturer of supplies, purchased AHS. Of course, over time Baxter had an incentive to cut its costs to maintain higher profits. In the process their delivery service might suffer. Some hospitals apparently experienced problems and returned to in-house stock rooms to eliminate shortages of basic supplies.
Figure 1.9 and Figure 1.10
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McDonald's
McDonald's Corporation has sold billions of hamburgers. Beginning in 1955 with a single drive-in Des Plaines, Illinois, McDonald's has frown to today's system of more than 25,000 restaurants across 115 countries.
As a brand, McDonald's is synonymous with a quality product at a reasonable price. Equally important, McDonald's markets itself as more than a place to get a hamburger. Ronald McDonald, Happy Meals, the clean restaurants and each new product or promotional theme add to the fun that brings more than 40 million customers of all ages to its restaurants around the world each day.
Eighty percent of worldwide McDonald's restaurants are franchised. Each restaurant must meet strict requirements to make the same as all others. This esnures that each time you drive or walk into a McDonald's, no matter where you are, the Big Mac that you order will always be the same taste, size, weight, and quality. It will also be competitively priced.
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Introduction to MIS - Lecture 1
Lecture 1
What is MIS?
A combination of computers and people that is used to provide information to aid in making decisions and managing a firm.
Components: Hardware, software, people, procedures and collections of data.
Goal: To enable managers to make better decisions by providing quality information.
Information Technology vs. Information System
Information Technology (IT) - represents the various types of hardware and software used in an information system. It includes computers and networking equipment.
Information System - refers to the interaction between people, processes, and technology. An information system has an information technology component that interacts with the people and processes components.
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