ISM 50 - Business Information SystemsLecture 3Course Instructors: Mary Doyle, Geoff RyderApril 6, 2009Outline For Today Class Announcements Student Presentations Information Technology and Strategic Competition Cash Flow  Business Process Reengineering intro…Class announcements Due WednesdayAssignment 1: Resume and Cover letter For Next time Read:Chapter 2 - Section II of O’Brien STUDENT PRESENTATIONSElliott TenJosef RokickiNews Folio Presentation ISM 50 Elliott Ten April 6, 2009Authors and ArticlesMichael S. Malone “Newspapers, Hail and Farewell”Michael S. Malone “How Newspapers Must Change to Survive”CNN Video “Newspaper Jobs Dying”Brendan Gupta “The Dying Newspaper”Lee Bains “Are These Newspapers Going Out of Business?”WBZ-TV “Are Newspapers A Dying Breed?”Wikipedia “Seattle Post-Intelligencer”Gary Kamiya “Death of the News”Main Ideas Newspapers are failing Technology changed how we view news What do major newspapers need to do to survive Newspapers are failing From 2006 – 2008 American newspapers lost 42% of their market value. Newspapers are loosing a lot of advertising, their main source of income. Craigslist has dominated classified advertising The San Francisco Chronicle is soon looking for a buyer Seattle Post Intelligencer went web only on March 17, 2009Technology changed how we view news Ways to get news using technologyInternet source Computer Blackberry/Smartphone Advantages of news onlineGreenerQuicker updatesFree (mostly)What do major newspapers need to do to survive Recognize how everything has changed Use technology to deliver news Strive to market to eBooks and smart phones Convert to web only See where they need to be in 10 years, and get there in 5 years.Summary of How Article Relates to ISM 50 ConceptsOld fashion paper newspapers need to get with the times and go electronic to survive. A new method of getting news to people using technology has begun to change and shape a new era of reporting.News Folio Presentation ISM 50 Josef Rokicki April 6th, 2009Global HeroesMarch 12th, 2009The EconomistIllustration by Nick DewarEntrepreneurship in a Recession Definition of Entrepreneur Five Myths of Entrepreneurship Fortunes in the Economic DoldrumsDefining the Entrepreneur• Start a Business• Innovate• Disrupt• Geek?The Characters, Lewis and Gilbert, from "Revenge of the Nerds"Five Myths of Entrepreneurship1) Anti-social geek?2) Young and Inexperienced3) Venture Capital4) Rock the Boat5) Anti-conglomeratesTreasure in the Economic DoldrumsThe Good:• Unemployed skilled labor• Cheap office spaceThe Bad: Venture Capital is down 33% New Corporate LegislationHow this Effects YouThe Ugly:Bill Gates was worth$100Bin 1999-- WikipediaReview of Lecture 2 History of IT 1960 - …….(Nolan article)ErasStages within erasEmergence of IT as a business functionThe value of networks (Metcalfe’s Law) Messerschmitt definitions Business Functions and Processes (Obrien, Ch. 1)DefinitionsCase studiesInformation Technology and Strategic Competition• Strategic AdvantageCompetitive Forces (Porter 5 forces)Competitive Strategies Strategic Use of Information Technology Internet and the Value ChainCompetitive Forces Bargaining power of customers Bargaining power of competitors Rivalry of competitors Threat of new entrants Threat of substitutesPorter Competitive ModelPorter Competitive Model(Identify the Industry and the Specific Market (Identify the Industry and the Specific Market Being Evaluated)Being Evaluated)Intra-Industry RivalryStrategic Business UnitBargainingPower of BuyersBargainingPowerof SuppliersSubstitute Productsand ServicesPotentialNew EntrantsIntra-Industry RivalrySBU: UCSCRivals: UC campuses, CSU,Private universities, Community Colleges BargainingPower of BuyersBargainingPowerof SuppliersSubstitute Productsand ServicesPotentialNew Entrants• Faculty• Staff• Equipment and Service Suppliers• Alumni• Foundations• Governments• IT Vendors• Internet Distance Learning• Books and Videotapes• Computer-Based Training• Company Education Programs• Students• Parents• Businesses• Employers• Legislators• Foreign Universities• Shift in Strategy by Universities or CompaniesPorter Competitive ModelEducation Industry – Universities Bargaining power of customers and competitors Strength in numbers? Well-informed about the industry/brands? Loyalty/incentives?What are some examples of the bargaining power of customers, competitors?Rivalry of competitors Number of firms in industry Rate of market growth Level of differentiation in market Diversity of rivals Probability of industry shakeoutThreat of new entrants Government-created barriers Proprietary knowledge to enter Little brand differentiation Low cost to enterThreat of substitutes Switching costs Buyer inclination to substitute Price/performance trade-offs (paying more doesn’t get you more)What are some examples of threat of substitutes?Competitive StrategiesCost leadershipDifferentiationInnovationGrowthAllianceWhat is the purpose of competitive strategies?Cost leadership Low cost production – how?InventoryStaffingCustomer costCompetitor costProduction processesWhat about the role of IT in cost leadership?Differentiation Positive difference between your products/services and the competition How can this help reduce the competitor’s advantage? Establish a niche marketInnovation New ways of doing businessNew/unique products/servicesBetter customer service modelsBetter distribution modelsGrowth Expansion into new markets Increased production Diversification Integrate related products/servicesAlliances Mergers/acquisitions, joint ventures Partnership agreementsCompetitive Advantage ConceptsStrategic Uses of Information Technology Cost Leadership Differentiation Innovation Growth AllianceWhat are some examples of use of IT in deploying these strategies?The Value Chain An interconnected series or chain of basic activities that add value to a firm’s product or servicesPrimary processesSupport processes Internet strategies can be developed in both primary and support processesValue Chain Purpose A way of classifying a companies activities and how they help deliver value to customer. A framework for evaluating decisions like outsourcing, or deployment of IT. The