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CHAPTER ONE
CLOSING MATERIAL
OPENING CASE QUESTIONS
The Internet of Things
1. Knowledge: Explain the Internet of Things and list three IoT
devices.
Imagine your toothbrush telling you to visit your dentist because it senses
a cavity. How would you react if your refrigerator placed an order at your
local grocery store because your milk and eggs when about to expire?
Over 20 years ago, a few professors at Massachusetts Institute of
Technology (MIT) began describing the Internet of Things (IoT), which is a
world where interconnected, Internet-enabled devices or “things” can
collect and share data without human intervention. Another term for the
2. Comprehension: Explain why it is important for business
managers to understand that data collection rates from IoT
devices is increasing exponentially.
If your students are wondering why they need to take this course then this
case study should scare them into becoming a believer in the power of
technology in business. Managers of the future are going to be tasked
3. Application: Demonstrate how data from an IoT device can be
transformed into information and business intelligence.
We live in the information age, when in/nite quantities of facts are widely
available to anyone who can use a computer. The core drivers of the
information age include data, information, business intelligence, and
knowledge. Data are raw facts that describe the characteristics of an
event or object. Information is data converted into a meaningful and
4. Analysis: Analyze the current security issues associated with IoT
devices.
Security is covered in detail in Chapter 4 but we want to get the students
thinking about ethics and security in every chapter. Security issues with
IoT devices are many including:
5. Synthesis: Propose a plan for how a start-up company can use IoT
device data to make better business decisions.
Students should be able to discuss how a company can use Porter’s Five
Forces to analyze an industry to determine how attractive it would be to
enter. Once determining if it would be pro/table to enter a certain
industry the company would need to determine which of Porter’s three
generic strategies it should follow to ensure success. Once the company
is up-and-running it can use Porter’s value chain analysis to examine and
6. Evaluate: Argue for or against the following statement: “The
Internet of Things is just a passing fad and will be gone within a
decade.”
For this debate the important point is that your students can justify their
REVIEW QUESTIONS
1. What is data and why is it important to a business?
Data are raw facts that describe the characteristics of an event or
object. Before the information age, managers manually collected and
2. How can a manager turn data into information?
Information is data converted into a meaningful and useful context.
Having the right information at the right moment in time can be worth
3. What is the relationship between data, information, business
intelligence, and knowledge?
Data is converted into information, business intelligence, and
knowledge. Using data, information, business intelligence, and
4. Why is it important for a company to operate
cross-functionally?
Each department performs its own activities. Although each
department has its own focus and data, none can work independently
if the company is to operate as a whole. It is easy to see how a
business decision made by one department can a?ect other
departments. Marketing needs to analyze production and sales data to
5. Why would a company want to have a CIO, CPO, and CSO?
A chief information o>cer is responsible for (1) overseeing all uses of
MIS and (2) ensuring that MIS strategically aligns with business goals
and objectives. A chief privacy o>cer is responsible for ensuring the
6. Explain MIS and the role it plays in a company and global
business.
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. For example, to
ful/ll product orders, an MIS for sales moves a single customer order
across all functional areas including sales, order ful/llment, shipping,
7. Do you agree that MIS is essential for businesses operating in
the information age? Why or why not?
MIS can be an important enabler of business success and innovation.
This is not to say that MIS equals business success and innovation, or
that MIS represents business success and innovation. MIS is a tool that
8. Why is it important for a business major to understand MIS?
MIS systems drive organizations and all business students will be using
9. What type of career are you planning to pursue? How will your
speci?c career use data, information, business intelligence,
and knowledge?
Answers to this question will vary depending on the career path the
student has chosen.
10. Explain systems thinking and how it supports business
operations.
Systems thinking is a way of monitoring the entire system by viewing
multiple inputs being processed or transformed to produce outputs
while continuously gathering feedback on each part. Feedback is
information that returns to its original transmitter (input, transform, or
output) and modi/es the transmitter’s actions. Feedback helps the
system maintain stability. For example, a car’s system continuously
11. What business strategies would you use if you were
developing a competitive advantage for a company?
Answers can include Porter’s /ve forces, Porter’s three generic
strategies, or value chain analysis.
12. Explain Porter’s Five Forces Model and the role it plays in
decision making.
Formally de/ned, Porter’s Five Forces Model analyzes the competitive
forces within the environment in which a company operates to assess
the potential for pro/tability in an industry. Its purpose is to combat
13. How could a company use loyalty programs to inCuence
buyer power? How could a company use switching costs to lock
in customers and suppliers?
Companies can also reduce buyer power with loyalty programs, which
reward customers based on their spending. The airline industry is
famous for its frequent-Cyer programs, for instance. 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. Keeping track of the activities and accounts of many
thousands or millions of customers covered by loyalty programs is not
14. What are Porter’s three generic strategies and why would
a company want to follow only one?
Porter has identi/ed three generic business strategies for entering a
new market: (1) broad cost leadership, (2) broad di?erentiation, and
(3) focused strategy. Broad strategies reach a large market segment,
15. How can a company use Porter’s value chain analysis to
measure customer satisfaction?
To identify these competitive advantages, Michael Porter created value
chain analysis , which views a /rm as a series of business processes
that each add value to the product or service. Value chain analysis is a
useful tool for determining how to create the greatest possible value
for customers. The goal of value chain analysis is to identify processes
in which the /rm can add value for the customer and create a
CLOSING CASE ONE QUESTIONS
THE WORLD IS FLAT: THOMAS FRIEDMAN
Additional Case Video
The MIT website o?ers a video lecture by Thomas Friedman. Try showing
1. Knowledge: De?ne Globalization 1.0, 2.0, and 3.0 and provide a
sample of the type of business data managers collected during
each era.
Globalization 1.0 started when Christopher Columbus discovered the
world is round and the world shrank from large to medium. For the next
Globalization 2.0 began around 1800, during the Industrial Revolution,
when the world went from medium to small. In this era international
Globalization 3.0 began in early 2000, removing distance from the
business equation, and the world has gone from small to tiny. In this
2. Comprehension: Explain Friedman’s Cat world and the reasons
why it is important for all businesses, small or large, to
understand.
If your students are wondering why they need to take this course then this
case study should scare them into becoming a believer in the power of
3. Application: Demonstrate how students competing for jobs in a
“Cat world” can create competitive advantages to diDerentiate
themselves in the marketplace.
Learning about information technology and how they can use IT to gain a
competitive advantage in their industry or for their organization is key.
Negative: In a Cat world it is far more di>cult to get a job because
competition is increasing at an incredible rate. There are 1 billion
Positive: Students can now perform a global job search right from
their apartment. Students in Chicago can accept jobs all over the
4. Analysis: Analyze the current business environment and identify
a new Cattener not mentioned on Friedman’s list.
The answer to this question will vary. A few include:
Cheaper technology, such as the $100 laptop from MIT, allowing more
people access to the Internet
5. Synthesis: Propose a plan for how a start-up company can use
any of Porter’s strategies to combat competition in a global
world.
Students should be able to discuss how a company can use Porter’s Five
Forces to analyze an industry to determine how attractive it would be to
enter. Once determining if it would be pro/table to enter a certain
6. Evaluate: Argue for or against the following statement: “The
world is not Cat (in Friedman’s sense of the term) because many
undeveloped countries are not connected electronically.”
For this debate the important point is that your students can justify their
point of view. Some students will agree with Friedman that technology has
CLOSING CASE TWO QUESTIONS
Crushing Candy
1. Do you agree or disagree that freemium business strategies can
provide a company with a competitive advantage? Be sure to
justify your answer?
One of the main factors that brought Candy Crush into the top game was
the fact that it was free – anyone could download and play the game for
2. Why are data, information, business intelligence, and knowledge
important to King.com? Give an example of each type in relation
to a customer playing Candy Crush.
Data are raw facts that describe the characteristics of an event or object.
Before the information age, managers manually collected and analyzed
data, a time-consuming and complicated task without which they would
have little insight into how to run their business. Lacking data, managers
often found themselves making business decisions about how many
products to make, how much material to order, or how many employees
to hire based on intuition or gut feelings. In the information age,
successful managers compile, analyze, and comprehend massive
amounts of data daily, which helps them make more successful business
decisions.
Examples include:
Download date, customer name, device type, amount of time played,
amount spent per transaction
Information is data converted into a meaningful and useful context.
Having the right information at the right moment in time can be worth a
fortune. Having the wrong information at the right moment; or the right
information at the wrong moment can be disastrous. The truth about
information is that its value is only as good as the people who use it.
People using the same information can make di?erent decisions
depending on how they interpret or analyze the information. Thus
information has value only insofar as the people using it do as well.
Information would include:
How many downloads did the average customer perform before
playing?
What day of the week are the most games downloaded?
Which country had the greatest number of downloads?
What was the average score per user depending on how long the
customer had played?
How many other games did the customers download?
3. Analyze King.com using Porter’s Five Force Model.
King.com’s buyer power is high as there are thousands of games to
choose from downloading. King.com supplier power is high as it is the
sole creator of the product. King.com can use environmental scanning, or
the acquisition and analysis of events and trends in the environment
external to an organization, to analyze rivalry and competition. King.com
4. According to Porter’s three generic strategies, where does
King.com’s Candy Crush reside?
King.com is following a focused strategy.
5. Why do freemium business strategies work well for virtual
products and typically fail for physical products?
IT does not cost the company any money to give away a virtual product
as there are no associated manufacturing costs, shipping costs, inventory
.
CRITICAL BUSINESS THINKING
Instructor Note: There are few right or wrong answers in the business
world. There are really only e>cient and ine>cient, and e?ective and
ine?ective business decisions. If there were always right answers businesses
would never fail. These questions were created to challenge your students to
