Reem Mohsen El-Adly

 Management information systems (MIS) is a business

function, like accounting and human resources, which
moves information about people, products, and
processes across the company to facilitate decision
making and problem solving.

 MIS incorporates systems thinking to help companies

operate cross-functionally.
 to fulfill product orders, an MIS for sales moves a single
customer order across all functional areas, including
sales, order fulfillment, shipping, billing, and finally
customer service. Although different functional areas
handle different parts of the sale, thanks to MIS, to the
customer the sale is one continuous process
 MIS skills gap is the difference between existing MIS
workplace knowledge and the knowledge required to
fulfill the business goals and strategies.

 Common approaches to closing an MIS skills gap

include social recruiting, off-site training, mentoring
services, and partnerships with universities.

 In recruiting lingo, qualified candidates are referred to

as purple squirrels.
 A competitive advantage is a feature of a product or service
on which customers place a greater value than they do on
similar offerings from competitors.

 Unfortunately, competitive advantages are typically

temporary because competitors often quickly seek ways to
duplicate them. In turn, organizations must develop a strategy
based on a new competitive advantage.

 Ways that companies duplicate competitive advantages

include acquiring the new technology, copying the business
operations, and hiring away key employees.
 Competitive intelligence is the process of gathering
information about the competitive Environment.

 It means understanding and learning as much as

possible as soon as possible about what is occurring
outside the company to remain competitive.
Michael Porter, a university professor at Harvard Business
School, identified the following pressures that can hurt
potential sales
1. Knowledgeable customers can force down prices by
pitting rivals against each other.
2. Influential suppliers can drive down profits by charging
higher prices for supplies.
3. Competition can steal customers.
4. New market entrants can steal potential investment
capital.
5. Substitute products can steal customers.
 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.

 Its purpose is to combat these competitive forces by

identifying opportunities, competitive advantages, and
competitive intelligence.

 If the forces are strong, they increase competition; if

the forces are weak, they decrease competition.
 Loyalty programs are a good example of using MIS to
reduce buyer power by increasing the switching costs.

 loyalty programs are to reward customers based on

their spending.

 The airline industry is famous for its frequent-flyer

programs. Because of the rewards travelers receive
(free airline tickets, upgrades, or hotel stays), they are
more likely to be loyal to or give most of their business
to a single company.
 Some powerful suppliers, such as pharmaceutical companies, can exert a threat
over an entire industry when substitutes are limited and the product is critical to
the buyers.

 Patients who need to purchase cancer-fighting drugs have no power over price
and must pay whatever the drug company asks because there are few available
alternatives.

 Using MIS to find alternative products is one way of decreasing supplier power.
Cancer patients can now use the Internet to research alternative medications and
practices, something that was next to impossible just a few decades ago.

 Buyers can also use MIS to form groups or collaborate with other buyers,
increasing the size of the buyer group and reducing supplier power.
For a hypothetical example, the collective group of 30,000 students from a
university has far more power over price when purchasing laptops than a single
student.
 A company can reduce the threat of substitutes by offering additional
value through wider product distribution.

 Using the big data and managing it by MIS, companies can find out
when and where customers need their products.

 Soft-drink manufacturers distribute their products through vending

machines, gas stations, and convenience stores, increasing the
availability of soft drinks relative to other beverages.

 Companies can also offer various add-on services, making the

substitute product less of a threat.
For example, iPhones include capabilities for games, videos, and
music, making a traditional cell phone less of a substitute (Considering
the growth in video games devices, cameras and so on)
 An entry barrier is a feature of a product or service
that customers have come to expect and entering
competitors must offer the same for survival.

 For example, a new bank must offer its customers an

array of MIS-enabled services, including ATMs, online
bill paying, and online account monitoring. These are
significant barriers to new firms entering the banking
market.
 Product differentiation occurs when a company develops unique
differences in its products or services with the intent to
influence demand.

 Companies can use differentiation using MIS to reduce rivalry.

For example, although many companies sell books and videos
on the Internet, Amazon differentiates itself by using customer
profiling. When a customer visits Amazon.com repeatedly,
Amazon begins to offer products tailored to that particular
customer based on his or her profile.

 In this way, Amazon has reduced its rivals’ power by offering its
customers a differentiated service.
 It is important to understand that the eight listed are
the most common, but not the only, types of business
strategy an organization can pursue.

 It is also important to understand that strategic moves

often consist of a combination of two or more of these
initiatives and other steps.

 And that sometimes accomplishing one type of

advantage creates another.

 The essence of strategy is innovation, so competitive

advantage is often gained when an organization tries a
strategy that no one has tried before.
 For example, Dell was the first PC
manufacturer to use the Web to take customer
orders.

 Competitors have long imitated the practice,

but Dell, first to gain a Web audience, gained
more experience than other PC makers on this
e-commerce vehicle and still sells more
computers via the Web than its competitors.
 An enormous trend toward automating online customer service
began with companies such as FedEx, which initially gave
customers an opportunity to track their parcels’ status by logging
on to a dedicated, private network and database.

 The same approach is now implemented through the Web. Many

sites today include answers to FAQs (frequently asked questions).
Others have special programs that can respond to customer
questions.

 Online service gives businesses two major benefits:

1) it changes service from being labor intensive to technology
intensive, which is much less expensive,
2) it provides customers easy access to a service 7 days a week, 24
hours a day.
 Amazon obtained a patent for the techniques it
uses to guess what types of items a user might like
to buy in the future.

 Exclusive use of the methods might give the

company additional strategic advantage in online
shopping.

 Protecting any invention, including hardware and

software, with patents and copyrights provides an
excellent barrier to potential entrants.
 loyalty programs are to reward customers based on
their spending.

 Kroger, Safeway, and Albertsons in the United

States compete in many ways, essentially trying to
beat or match each other on price.

 Most supermarket chains have implemented loyalty

programs to provide customers special discounts
while gathering valuable information about their
purchasing habits.
 example of a company creating a new service is eBay, the firm that
dominates online
 auctions. The organization was the first to offer this service, which
became very popular within only a few months. While other firms
now offer a similar service (e.g., Amazon.com and Yahoo! Auctions),
the fact that eBay was the first to offer it gave the company a huge
advantage. It quickly acquired a large number of sellers and bidders,
a network that is so critical to creating a “mass” of clients, which in
turn is the main draw for additional clients. It also gave eBay an
advantage in experience and allowed it to open a gap that was
difficult for competitors to close, even for giants such as
Amazon.com.
 eBay is an example of an entire business that would be impossible
without the Web and the information technologies that support the
firm’s service.
 Being a first mover is not always a guarantee of long-term success

 Few Web surfers remember Infoseek, the first commercial search

engine.

 Google, which entered the search engine arena in 1998, improved the
quality and speed of Web searches, offering a clutter-free home page.
The strategy of its two young entrepreneurs was simple:
provide the best search engine, and refrain from commercializing it for a
while. Over a period of about three years Google established itself as
the best search engine. In time, it started to capitalize on this
prominence by selling sponsored links (the right side of the results of a
user’s search, and later the top shaded results).

 Most importantly, the organization never stopped improving its search

algorithms (MIS) and periodically has offered new services.

 The strategy has succeeded so much that “google it” has become
synonymous with “search for it on the Web.”
 Amazon differentiates itself by using customer
profiling.

 When a customer visits Amazon.com repeatedly,

Amazon begins to offer products tailored to that
particular customer based on his or her profile.
 The Progressive Groups, the third largest U.S. car
insurance company, is a good example. The
company enables insured drivers to place a claim
and follow its progress at the company’s site.
 The company has connected its information systems
with those of car dealerships and financing
institutions. When a car is totaled (i.e., fixing it
would cost more than purchasing a new car), the
owner can receive a check to purchase a new car.
 by creating an alliance, organizations enjoy synergy:
the combined profit for the allies from the sale of a
package of goods or services exceeds the profits
earned when each acts individually.

 travel Web sites such as Orbitz offer you the

opportunity to reserve lodging and car rental at
discounts while you make your airline reservations.

 The company has also established alliances with

hotel chains and car-rental companies.
 Consider the alliance between Hewlett-Packard
and FedEx. HP is a leading manufacturer of
computers and computer equipment. FedEx is a
shipping company. HP maintains inventory of its
products at FedEx facilities.

 When customers order items from HP via its Web

site, HP routes the order, via the Web, to FedEx.
(MIS)

 FedEx packages the items and ships them to

customers. This arrangement lets HP ship ordered
items within hours rather than days.
 Bargaining Power

 Consider Wal-Mart, the world’s largest retailer. Not only

does the company use its substantial bargaining power
to pressure suppliers to lower prices, but it also requires
them to use information systems that are compatible
with its own automated processes.

 The suppliers must use ISs that tell them when to ship
products to Wal-Mart so that the giant retailer is never
left understocked or overstocked.
 One way to lock in buyers in a free market is to enjoy a situation in
which customers fear high switching costs.

 Another way to lock in clients is to create a standard.

 For example, Microsoft’s decision to give away its Web browser by

letting both individuals and organizations download it free from its site
was not altruistic.

 Microsoft executives knew that the greater the number of Internet

Explorer (IE) users, the greater the user base. The greater the user
base, the more likely organizations were to purchase Microsoft’s
proprietary software to help manage their Web sites. Also, once
individual users committed to IE as their main browser, they were likely
to purchase Microsoft software that enhanced the browser’s
capabilities.
 marketing research as the systematic and objective
identification, collection, analysis, and dissemination of
information for use in marketing decision making.

 A marketing information system (MIS) is a formalized set

of procedures for generating, analyzing, storing, and
distributing information to marketing decision makers on
an ongoing basis.

 Note that the definition of MIS is similar to that of

marketing research, except that an MIS provides
information continuously rather than on the basis of ad hoc
research studies.