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Class 1-9 Notes

by: Dylan Wood

Class 1-9 Notes MIS 375

Dylan Wood

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Notes for the different cases we have covered in class
Strategic Information Technology Management
Rajiv Garg
IT Strategy, Business Strategy
75 ?




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This 11 page Bundle was uploaded by Dylan Wood on Friday February 19, 2016. The Bundle belongs to MIS 375 at University of Texas at Austin taught by Rajiv Garg in Spring 2016. Since its upload, it has received 40 views. For similar materials see Strategic Information Technology Management in Business at University of Texas at Austin.


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Date Created: 02/19/16
MIS 375 Class 4: ITC  Mandis were created to save farmers from being ripped off  Old Supply Chain o In mandi system there is price uncertainty  New supply chain FARMER MANDI (CA) ITC SAMYOJAK INTERNET SANCHALAK  What barriers of entry did ITC face when embarking on this process? o high costs  technology o training o literacy o need for trust o legislation/government o power of middlemen over price o poor existing infrastructure o entrenched practices  What are the reasons for success o trust o clear value o choice freedom  Is it sustainable  20@ from the improvement in yield/output  80% from the market capture  1/26/2016 MIS 375 Class 3 - CEMEX  IT @CEMEX o Cement industry  old and stagnant  capital intensive, thus not a competitive market  seasonal demand  growth opportunities in emerging markets o Why not:  low information intensity in process  low information contained in product o Why:  strategic gain  inter-related business and IT growth  e-business  A supplier like CEMEX can increase value through: o brand Growth Challenges Info Rivalry Entrant Buyer Supplier Subs stage capabilitie s power s Dominat Communicati Invested Decrease e on heavily in IT s in domesti and comm. domestic c market infrastructur market Decreas decreas Decrease Remains e and unchange increases e es s d in develope d market Leverag Commitment Evaluated Increases Increase Increases Unchange e Latin existing IT and Increase s and and then d Culture for decrease s and decreas remains scalability in s decreas es unchang acquisitions es ed Emergin Integration of Information g systems in decision Markets making. Provided lots of training Dev. Low IT skills Focus on Markets and lower IT people – IT infrastructure training Mismatched Change processes mgmt.. training Instability  Best lower practices investments and centralized 1/26/2016 IT Cultural/social Standardizat differences ion andE business (CRM)  CEMEX success came from developing competitive advnate through IT, people, and processes  support from execs is necessary  CEMEX has been an early adopter of IT and related e-business models. the key is to learn from such experiments to make right choices  MIS 375 Class 9: PayPal  PayPal had a way to transfer money between eachother o secure methods  Businesses couldn’t accept credit cards  Beneficial for merchants bc it was secure o Reduced losses by 90% because both entities were verified by paypal  PayPal is a two sided market o Merchants  secure  extra authentication  cheap  small merchants have limited credit history  alternative methods were slow or expensive o Consumers  convenient  Reluctant to divulge bank information  Network effect o viral marketing  $10 referral bonus + $10 signup award o The network effect increases willingness to pay, increases switching costs, attracts more customers o Suppliers: increases lock in, increases switching costs, volume based discounts  Penetration pricing o no cost to customers o need penetration pricing to create network effect  Ebay and Paypal split because PayPal was growing out of Ebay  Rewards and Fraud is why customers now like to use credit cards over PayPal o Air France and online advertising  First identify all the metrics that matter o Cost per Click o Click through rate  number of clicks / impresions  if click through rate is low, website quality is low o Transaction Conversion rate o Probability of booking o Average revenue/booking o net revenue o ROA  Two things that matter o probability of book and cost  Bidding on keyword search o Businesses bid on rank 1  In order to increase probability of book improve website quality and/or ad quality  Second look at the strategies within each platform Reduce Investment Improve ROA, Google, MSN US Improve website quality and PoB Increase investment, MSN Global, Yahoo Overture 1/21/2016 MIS 375 Class 2  Strategy is the integrated set of choices that positions the business in its industry so as to generate superior financial returns over the long run  Data driven manufacturing uses facts and figures to drive decisions o improve efficiencies, better output  IT adds value to actiivties in the value chain o ex. dominoes  IT improves management of interaction in activities o ex. Fedex and the delivery of packages  IT reduces life cycle cost o ex. profit thus is higher  profit from value chain = (created value – cost of performing value activities)  The demand curve tells you how much a customer is willing to pay for a certain product  The producer wants to create a producer surplus (Selling price – cost to make)  The consumer wants a consumer surplus (paying less than what they are willing to pay)  economic surplus is the sum of consumer and producer surplus  There are no long mature industries, rather, there are mature ways of doing business” o Every business needs to keep updating there products and processes  How are products transforming o physical products  automobilies o information products  ebooks o hybrid products  nest  Example. if FB launches an android phone, The Samsung galaxy demand curve will decrease thus their price decreases and profit decreases  Example: If Gorilla glass increases price of their glass the Samsung supply curve increases bc the price per phone is going to increase  Creating competitive advantage o lowering costs o enhancing differentiation  product customization  versioning  service quality  Spawning new business o IT makes new business technologically feasible  NFC enabled by Apple Pay o IT spawns new business by creating derived demand for new products  whatsapp o IT creates new business within existing ones  We have an overreliance on IT  causes slower and incorrect decision making 1/21/2016 o  2/2/2016 MIS 375 CLASS 5 PEPSIAMERICAS CASE  Challenges (Five Forces) o Substitutes: Increasing demand for a variety of products o increasing power of the buyers  Competition with coke  Solutions o Offer more products o Standardize processes  NEXTGEN o Standardized handheld devices given to drivers o Challenges  no technology on the market to implement  fail and break more often bc the tech is not on the market  Customer Alignment o more command and control environment o more standardized pricing o more standardized activities o $15-$17 million saved through efficiencies  IT Projects o business process improving using IT o Establish competitive edge using  information backbone  mobile platform  IT Architecture o evolving IT architecture with information backbone  evaluating enterprise architecture operating model  integration vs. standardization  understanding enterprise architecture maturity  increasing evolution strategy High Integration Coordination Unification CEMEX, PAS 2.0 Low Integration Diversification Replication PAS 1.0 ITC eChoupal Low standardization High Standardization  Recommendations o incremental improvement – don’t skip stages o set realistic expectations o fix process before data 2/2/2016 o fix parts before whole o stay focused on people  benefits/learning o customer optimization  demand/ planning  power pre-sell (anticipating demand)  Perfect pallet using IT to match invoice with pallet stock o Global understanding  labor costs could change the value of IT investments o Acquisition MIS 375 Class 7  Long tail  Social o push towards discussion forums and social platforms for:  customer engagement  influence  customer insights o Internet is engaging customer and creating issues  Impact of internet on businesses o Positive effects  companies can reach more customers (market size)  decreased marketed channel power  increased targeting of customers o Negative effects  competition can reach more customers  more buying power  Increased losses because of high security or low security  decreased switching costs  reduces barriers of entry  More substitutes  Google gets 1:3 attention of users but gets 7 times the revenue from display ads o google is a platform to search for things  mobile advertising o localized o convenient  four big tech firms o facebook o amazon o apple o google o all have overlapping business models 


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