1. The International Dimension Part 1: The Global Economy © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke

2. ID 1-2 Study Questions Why is the global economy important today? How does the global economy change the competitive environment? How does the global economy change competitive strategy? How does the global economy change value chains and business processes? How does the global economy change information systems?

3. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke ID 1-3 Why Is the Global Economy Important Today? Businesses compete in a global market Economies have become more closely integrated Cheap, plentiful telecommunications are available New markets have opened

4. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke ID 1-4 Changes in the Competitive Environment Internet-equipped world economy Customers and suppliers – Suppliers have wider range of customers – Customers have more available vendors – Easier to learn about each other through search engines – Substitutes easier to locate Enables new market entrants Intensifies rivalry

5. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke ID 1-5 How Does the Global Economy Change Competitive Strategy? Size and complexity of global economy effects strategy – Enormous task – Expensive Size enables unprecedented product differentiation

6. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke ID 1-6 Changing Value Chains and Business Processes Growth in world economy impacts all value chain activities Business processes now span the world – Need to address differences: Culture Language Economic environments

7. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke ID 1-7 How Does the Global Economy Change Information Systems? Information systems affected – Computer hardware is sold worldwide – User interfaces What languages will be used? Can systems use localized programming language? Software applications – Human components Cultural differences must be considered. Local norms Job descriptions Reporting relationships

8. © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke ID 1-8 Active Review Why is the global economy important today? How does the global economy change the competitive environment? How does the global economy change competitive strategy? How does the global economy change value chains and business processes? How does the global economy change information systems?