Defining the Environment
Ą	The Information Economy or Telecommunications Environment
Ą	ItŐs not just broadcasting anymore
Ą	Understand this, and youŐre ahead of most broadcast professionals

Information Economy
Ą	Television, cable, radio
Ą	Telephone services 
Ą	Computer software, hardware
Ą	Publishing (print and electronic)
Ą	Creative production in all media 
Ą	Advertising
Ą	Shopping (on line, on-air)

Economic Drivers
Ą	1890-1930		Railroads
Ą	1930-1970		Manufacturing
Ą	1970-1985 		Services
Ą	1985-? 		Information

Technological Changes
Ą	Digitization
Ą	Compression

Technological  Changes
Ą	Fiber-opic transmission
Đ	50% of internat'l calls are data
Đ	1956: 50 calls per cable
Đ	1994: 85,000 calls per cable
Ą	Intelligent Agents
Đ	act for you to sift data, organize tasks

Convergence
Ą	When your computer will talk, 
Ą	your television will listen,
Ą	and your telephone will show you 
Ą	pictures.

 Fundamental Differences
Ą	Not capital intensive (comparatively)
Đ	Prices drop for technology-based products
Ą	Improves productivity  
Ą	Cuts employment in most fields
Ą	Increases employment in others
Đ	software, multi-media, telecommunications

Impact on Business:
Organizational Changes
Ą	Flatter organizations
Č	Toyota has 7 layers; GM 23
Ą	More information sharing
Đ	i.e., between sales and manufacturing
Ą	New boss-staff relationships
Đ	trust from the top, initiative from the bottom

Impact on Business:
		Operations
Ą	Shrinks cycle time
Ą	Increases quality
Ą	Improves communication with customers
Ą	Cuts costs
Đ	GM links to suppliers cut accounts receivable staff from 300 to 15

Impact on Business:
		Staffing
Ą	A more educated staff
Đ	Baldridge:1-5% after-tax spending
Ą	Teamwork, increased productivity 
Ą	May eliminate physical offices
Đ	IIBMŐs musical desks
Đ	the new Ňroad warriorsÓ

Impact on Business:
		Competition
Ą	 Advantage to the little, the new and the nimble
Ą	WhatŐs your Ňvalue addedÓ?
Ą	A new emphasis on customer
Ą	Increased # of new products
Đ	Using customer feedback to create them

Bill Gates on competition:
Ą	ŇBy the end of 1996, many businesses and industries will begin to 
appreciate keenly both how vulnerable they are to new forms of 
competition...and how great the opportunities are for those who welcome 
the future rather than resist it.Ó

For Next Time:
Ą	Confirm your group memberships
Ą	Two topics on Thursday:
Ą	The Business Environment
Ą	Project #1 Intro: Strategic Plan