Question

Explain the information value chain. How do business events turn into data, then into information, and then into knowledge? Give an example starting with the business event of the purchase of a CD at Best Buy all the way to useful information for the CEO and other decision makers.

Answer 1

A value chain is the full range of activities – including design, production, marketing and distribution – businesses conduct to bring a product or service from conception to delivery. For companies that produce goods, the value chain starts with the raw materials used to make their products, and consists of everything added before the product is sold to consumers.

Value chain management is the process of organizing these activities in order to properly analyze them. The goal is to establish communication between the leaders of each stage to ensure the product is placed in the customers' hands as seamlessly as possible.

Executives we’ve surveyed tell us they have an insatiable desire for more data. They and their companies appear to be addicted. And with reason: Executives believe that information will fundamentally change their businesses.

It may – and it may not. Whether executives can ride the wave of big data to a more successful business depends on how they use their data. A key part of this is understanding where your company sits on the data maturity model and being able to leverage business intelligence in the right way.

Data by itself is useless, especially for improved decision making. Companies that don’t realize this try to improve their odds of success by acquiring yet more data. Instead, they should realize that data, like iron ore, is merely a raw material. Smart companies use business intelligence to process their data so that it turns into information and, ultimately, into knowledge.

Knowledge is the true destination in the pursuit of data. When the enterprise turns its data into knowledge, it has tools with which to pursue and gain competitive advantage, and even build entirely new business models.

With an infrastructure designed to turn data into information and, ultimately, knowledge, the enterprise is better positioned to respond and innovate in all phases of its operations,such as customer relations.

The technology now exists to develop a 360-degree view of a company’s customers, including their demographics, economics, and preferences. To gain this view, the company gathers data not only from its own databases, but also from customer communications, social networks, blog comments and other channels.

By mining this data for information, the company gains the insight to understand customer needs and predict customer behavior. The company also can suggest additional products or services to its customers – a great way to boost both customer relations and revenues.

Companies that push knowledge further can use it not just as an enhancing factor, but as their business model. Well-known companies in this category include Amazon and Netflix. Their analyses and projections of customer behavior are at the core of their business models, and have propelled them to success.

The Best Buy ceo Has Converted Business Information into a strategic idea at the launch of CD by using of swot analysis

A SWOT analysis is a useful tool for brainstorming and strategic planning. You'll get more value from a SWOT analysis if you conduct it with a specific objective or question in mind. For example, you can use a SWOT analysis to help you decide if and how you should:

• take advantage of a new business opportunity
• respond to new trends
• implement new technology
• deal with changes to your competitors' operations.

Building on strengths

A SWOT analysis will help you identify areas of your business that are performing well. These areas are your critical success factors and they give your business its competitive advantage.

Identifying these strengths can help you make sure you maintain them so you don't lose your competitive advantage. Growing your business involves finding ways of using and building on these strengths.

Minimising weaknesses

Weaknesses are the characteristics that put your business at a disadvantage to others. Conducting a SWOT analysis can help you identify these characteristics and minimise or improve them before they become a problem. When conducting a SWOT analysis, it is important to be realistic about the weaknesses in your business so you can deal with them adequately.

Seizing opportunities

A SWOT analysis can help you identify opportunities that your business could take advantage of to make greater profits. Opportunities are created by external factors, such as new consumer trends and changes in the market.

Conducting a SWOT analysis will help you understand the internal factors (your business's strengths and weaknesses) that will influence your ability to take advantage of a new opportunity. If your business doesn't have the capability to seize an opportunity but decides to anyway, it could be damaging. Similarly, if you do have the capability to seize an opportunity and don't, it could also be damaging.

Counteracting threats

Threats are external factors that could cause problems for your business, such as changes to the market, a competitor's new advertising campaign, or new government policy. A SWOT analysis can help you identify threats and ways to counteract them, depending on your strengths and weaknesses.