What’s Happening?!

1. What’s Happening?! You will be color coded when you make a reservation on an airline. Bush proposal regarding illegal immigrants has hyped a big “made in America” and job security debate. After all, it is an election year!

2. ATP Assignments

3. ATP Assignments

4. The Plan!? • Start researching material immediately. • Read syllabus regarding the assignment. • Look at the Boeing paper in the textbook plus the • Wal-Mart paper on the course web page. • Use links on web page for your company.

5. Key Factors • Industry definition. • “Big Picture” data regarding the industry. • Business and IT leaders. • Porter Competitive Model analysis. • Business Strategy Model. • Identifying strengths and weaknesses of the company. • Figuring out who runs the business on a day-to-day basis and the relationship with the person running the IS organization. • Concluding what the company changed through the use of Information Systems.

6. Chapter 1 Summary Business and Information Systems Management Challenges

7. Overview of Chapter 1 • Three Necessary Perspectives • Simultaneous Revolutions in the Business Environment • Systematic Approach to IS • Three Roles of IS

8. Three Necessary Perspectives • Business Environment • Specific Industry • Enterprise Environment • The Company Itself • IT Environment • Creates a Competitive Advantage *Must understand the Business and Enterprise Environment first* Business Success

9. Simultaneous Revolutions New Competitors New Rules of Competition New Political Agendas The Business Industry Structure Changes New Technologies New Employees and New Values New Regulatory Environment Increasing Customer Expectation

10. Systematic Approach to IS Vision Strategy Tactics Business Plan • Competitive Options • Roles, Roles, and Relationships • Redefine/Define • Telecommunications as the Delivery Vehicle • Success Factor Profile

11. Three Roles of IS • Efficiency • Effectiveness • Competitive Advantage

12. Three Roles of IS • Efficiency • Doing things better overall • Effectiveness • Doing better things within the organization • Competitive Advantage • Doing better and new things for the customer

13. In Conclusion…. • Three Necessary Perspectives • Business / Enterprise / Information Technology • Simultaneous Revolutions • Competitors / Rules / Structure / Regulatory / Customer Expectation / Employees / Technology / Politics • Systematic Approach to IS • Separate Business from IT • Three Roles of IS • Efficiency • Effectiveness • Competitive Advantage

14. Chapter 1 Questions • Why is it important to know the business environment and enterprise environment before addressing the IT environment? • Identify and explain the three roles of Information Systems including a specific company example that emphasizes each of the roles?

15. Chapter 2Business Competitive Environment “The global market will come to you, if you don’t come to it.”

16. Competition Can Be… • Local • Regional • National • International Going to be taking a look at competition, defining it and then focusing on global competition.

17. Why Do We Care?

18. What Is Competitiveness? “The degree to which a nation can, under free and fair market conditions. Produce goods and services that will meet the test of international markets while simultaneously maintaining or expanding the real income of its citizens” Three Inputs to improving domestic performance • Human Resources • Capital • Technology

19. Competitiveness: A Link to National Goals Decreased Budget Deficit Stronger National Security Human Resources Trade Policy Improved Domestic Performance Increased World Market Competitiveness More and Better Jobs Capital Reduced Trade Deficit Increased Standard of Living New Competition Technology Figure 2-1

20. How does a company gain a competitive advantage? • Provide a value to customers • Real • Perceived • Knowing/Understanding • Products • Customers • Competitors

21. International Competitive Advantage The way companies achieve competitive advantage in the global industry is based on the role played by the home nation.

22. The Diamond National Advantage Firm Strategy, Structure and Rivalry Chance Factor Conditions Demand Conditions Related and Supporting Industries Government Fig. 2-2

23. The Government’s Role • Catalyst • Challenger

24. Overview • What competitiveness is. • How a company can gain competitive advantage. • How to gain an international competitive advantage • The government’s role in fostering home-based companies. “All good things take time.”

25. Chapter 2 Business Competitive Environment

26. Position Some Important Factors 1. The definition of competitiveness. 2. The key elements of competitive advantage. 3. The role of the nation relative to companies that compete successfully on a global basis. 4. The role of government within a nation. While contemplating the idea that information technology could make a difference.

27. Competitiveness is the Pivotal Business Issue in the 21st Century

28. Global Economy Why the emphasis on globalization and the importance of global competition?

29. Business Environment The global market will come to you, if you don’t go to it.

30. An Essential Roadmap? Do nations, companies and individuals need to build wealth in a knowledge-based global economy? How significant in creating wealth are breakthrough technologies in microelectronics, biotechnology, new materials, telecommunications, robotics, and computers? Do these factors explain why relatively new industries are growing explosively and existing industries are being transformed?

31. US Status • In the 1990s the US was the run away leading performer • in the industrial world. • The US claimed nine of the ten largest companies in the • world by 1998 compared to only two in 1990. • Nine of the fifteen most profitable banks are in the US • compared to none in 1990. • The wealthiest man in the world is an American. • American billionaires measure in the hundreds. • US stock markets remain relatively high. • Interest rates are at a forty year low. • Inflation has been a minor issue.

32. Some Important Questions • Is the relatively unique US prosperity sustainable? • Is global integration a boon or a threat to this prosperity? • Will the forces that sparked the Asian meltdown provoke an • era of stagnation or worse? • Should global integration be slowed? • What rules should be applied to the creation and protection • of new ideas. (intellectual property rights) • Can nations create a social system in which entrepreneurial • spirit can flourish without also creating income and wealth • inequities that threaten the system? • What skills are needed to succeed in this new economy?

33. Global (International) Trade Not in isolation to the rest of the world! The US has truly become a global economy. 1950 - Global trade represented 10% of the US economy. 2000 - Global trade was nearly 25% of a much bigger US economy.

34. Foreign Direct Investment Since 1985 foreign direct investment in the US has increased five-fold. Five percent of the total labor force works for companies that are wholly or partially foreign owned. Employees of companies that work for companies that export earn more than those that do not. Forty percent of productivity improvements are in exporting companies.

35. What Countries “Own”: • Finland • Nokia • Burger King • Chrysler • Airbus • Benetton • Gillette • Shell • UK • Germany • France, Spain, UK, Germany • Italy • US • Netherlands

36. A Complex Political Environment Three of five American registered voters approve of free trade. Most agree that imports give them a larger selection of goods to choose from and that foreign competition forces US companies to be more competitive. They also feel that imports help lower income families afford a higher standard of living by lowering prices. They have concerns regarding the environment, human rights, jobs, taxes, societal problems and sovereignty.

37. Trade Issue Attitudes Attitudes lie along income, education, age and gender divides. Free trade proponents tend to be those that see themselves benefiting from globalization: men, those that are better educated, richer and live in cities. Those who question globalization include women, the elderly, those who are less well educated or poorer and those that live in rural areas.

38. How Trade Works General Agreement on Tariffs and Trade (GATT) A loose agreement that had a restricted scope and limited powers based on an agreement that was originally signed in the late 1940s. World Trade Organization (WTO) Created in 1995, the WTO has the job of administering trade agreements, resolving trade disputes and conducting future trade negotiations.

39. WTO WTO members must abide by the group’s rulings. The most important of which is to give every member the same set of low tariffs and other favorable trade rules. The most significant recent development was the admission of China to the WTO in 2000.

40. Michael Porter Contributions • 1985 - Presidential Commission and • Competitiveness Definition • 1987 - Competitive Model and Value Chain • 1990 - Competitiveness of Nations Study • Present - Institute for Strategy and Competitiveness, • Harvard Business School

41. Presidential Commission Letter to President Reagan Mr. President, it has been a great honor to serve you and the Nation. The competitive challenge calls for the leadership only you can provide. We thank you for your vision, interest and initiatives in making competitiveness a priority on our national agenda. John A. Young Chairman President’s Commission on Industrial Competitiveness

42. Competitiveness Definition The degree to which a nation can, under free and fair market conditions, produce goods and services that will meet the test of international markets while simultaneously maintaining or expanding the real income of its citizens. Source: President’s Commission on Industrial Competitiveness

43. Competitiveness: A Link to National Goals Decreased Budget Deficit Stronger National Security Human Resources Trade Policy Improved Domestic Performance Increased World Market Competitiveness More and Better Jobs Capital Reduced Trade Deficit Increased Standard of Living New Competition Technology Figure 2-1

44. Presidential Commission Recommendations: 1. Create, apply and protect technology. 2. Spur new industries and revive old ones. 3. Pursue productivity gains through technology. 4. Reduce the cost of capital to American industry. Increase the supply of capital available for investment, reduce its cost and improve its ability to flow freely to its most productive uses.

45. Who is going to make it happen? • Government cannot legislate competitive success. • Government should highlight the importance of competitiveness. • Everyone must recognize the competitive challenge and its significance.

46. How Does a Company Compete? If the bottom line to a business is profit, then the top line is value to customer.

47. A Good Optional Strategy? To produce quality products and services through effective leadership of skilled employees using advanced methods through the innovative use of technology.

48. A Good Competitor: • Knows its products and services. • Knows its customers. • Knows its competitors.

49. Competitiveness of Nations The striking internationalization of competition in the decades after World War II has been accompanied by major shifts in the economic fortunes of nations and their firms. 1. How did this happen? 2. What can one learn from this? 3. What can companies and countries do with this knowledge?

50. Competitiveness of Nations Why (how) are companies in a particular nation able to gain a dominant competitive position in a specific industry against the world’s best competitors?