Chapter 2 Margin Notes
General Note: Chapter 2's theme is using Information Technology to compete in business. As future managers, always be objective about how this can be achieved. In the late 90's, there was a euphoria about IT that led to excessive spending in it. Now, there's a fear of IT that has led to millions of jobs being lost. Be objective---IT can be a business tool just like your choice of a shipment carrier, your telephone company, and the brand of water in your water cooler.
Page 42, Competitive Strategy Concepts. The author is very big on these strategies, and would love nothing better than if I told you to memorize these---however, I won't. Just understand how these strategies are used by different companies to achieve success in the marketplace.
Page 43, Real World Case #1, FedEx Corporation: Be sure to read this case. As you read the case, concentrate on the use of IT to make the company more profitable.
Page 45, Figure 2.2. An interesting figure--lots of good terms, but I'm not sure how they all relate. If you read the chapter, and understand this figure, you're doing well!
Page 46, Other competitive strategies. A bit of an overkill here. He already covered the major competitive strategies--although the barrier to entry strategy on Page 48 is significant. What does that mean?
Page 47, Figure 2.3, Basic Strategies in the Business Use of Information Technology. Check this out--although I don't really care for most of the figures in the book, some of them are good--and this one is crucial to understanding this chapter.
Page 48, Wal-Mart sidebar. Be sure to read this. Sam Walton's wife and 3 kids (one now deceased) are in the latest top 10 list of the richest people in the world--20.5 billion dollars!
Page 48, Figure 2.4, Examples of how companies have used information technology to implement five competitive strategies for strategic advantage. Another good one--I bet you recognize many of these companies. Notice how they use IT to make their companies more profitable.
Page 49, Competitive advantage and Competitive Necessity. Contemplate this one.
Page 49, Building a Customer-Focused Business. Customers are the reason we're in business.
Page 51, Hilton Hotels sidebar. Be sure to read this. Have you ever stayed at a Hilton? I have when I visited MIT in Cambridge, MA.
Page 51, The Value Chain and Strategic IS. This section is pretty dry. Just be sure to understand that the value chain refers to the incremental value that each piece of the company (people, parts, IT) adds to the finished product. Where do you fit in your company's Value Chain? Or your family's?
Page 53, Strategic uses of IT. In short, when you hear the word Strategic mentioned in a business context, it's the company's plan to put its competitors out of business (that's the idea, after all). IT can be used to do this. For instance, Amazon.com would love nothing better than to have every book produced on the planet purchased via its e-Commerce site.
Page 53, Reengineering Business Processes. A fancy term for changing the way people work and think about their jobs.
Page 53, Evolve Business Processes sidebar. Check it out.
Page 54, Real World Case #2: GE Energy and GE Healthcare. Be sure to read it! It will help you understand about Knowledge Management.
Page 56, Figure 2.9. Maybe the worst figure in the book.
Page 57, Becoming an Agile Company. What's an Agile Company?
Page 58, Creating a Virtual Company. What's a Virtual Company?
Page 58, Figure 2.12. A better figure.
Page 60, Cisco Systems. This can help you understand what a Virtual Company is.
Page 60. Building a Knowledge Creating Company. It's important for a company's employees to share the information they develop/gather/acquire with all of the employees in the company--that's basically what this section is saying.
Page 61, BAE Systems PLC. Don't skip these sidebars!
Page 66, Real World Case #3: GE, Dell, Intel, GM and Others. A classic case, particularly the part about Nicholas Carr. Check it out.