MIS 309 exam

information system (IS)

- An integrated solution that combines five components: hardware, software, data, procedures, and the people who interact with and are impacted by the system.

operational effectiveness

- Performing the same tasks better than rivals perform them.

transfer pricing

- the price paid when divisions of the same company transact with each other.

First Sale Doctrine

A US Supreme Court ruling stating that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner.

Commodity

A basic good that can be interchanged with nearly identical offerings by others--think milk, coal, orange juice, or to a lesser extent, Windows PCs and Android phones. The more commoditized an offering, the greater the likelihood that competition will be based on price.

collaborative filtering

A classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.

information asymmetry

A decision situation where one party has more or better information than its counterparty.

Cryptocurrencies

A digital asset where a secure form of mathematics (cryptography) is used to handle transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies usually take advantage of a technology known as a blockchain.

Blockchain

A distributed and decentralized ledger that records and verifies transactions and ownership, making it difficult to tamper with or shut down

A/B test

A randomized group of experiments used to collect data and compare performance among two options studied (A and B). A/B testing is often used in refining the design of technology products, and A/B tests are particularly easy to run over the Internet on a firm's website. Amazon, Google, and Facebook are among the firms that aggressively leverage hundreds of A/B tests a year in order to improve their product offerings.

What kinds of firms should aggressively pursue social media? Which ones might consider avoiding these practices? Social media critics often lament a lack of ROI (return on investment) for these sorts of efforts - does the return justify the investment? Why or why not?

A social media presence presents an opportunity for free marketing. There is a benefit to organic posts, where people who do social media advertisements will help the product more if it seems like they genuinely use the product or service. Almost every company should use social media so they can get a bigger customer base. It also allows a company to answer questions, as well as refute any bad talk about their company.

What tactic might an established firm employ to make it impossible, or at least difficult, for a competitor to gain access to, or become compatible with, their product or service? How has Apple kept clones at bay? What is the danger of doing this?

A tactic used to make it difficult for a competitor to gain access to their product is to constantly innovate. Apple has been very successful in constant innovation, and it has provided them with an extra layer of security for their products. Apple has also embedded key software into the Mac OS that make it difficult for an emulator to be built that would allow other computers to run the Apple OS. If anyone comes close to cloning an Apple product, Apple sues them and protects their product and makes a bit of money. If hackers somehow mess with their products, Apple fixes the problem and makes it even better. All of these factors combined with their constant innovation makes Apple a moving target that other companies can't keep up with.

dense wave division multiplexing (DWDM

A technology that increases the transmission capacity (and hence speed) of fiber-optic cable. Transmissions using fiber are accomplished by transmitting light inside "glass" cables. In DWDM, the light inside fiber is split into different wavelengths in a way similar to how a prism splits light into different colors.

Internet of Things (IoT)

A vision where low-cost sensors, processors, and communication are embedded into a wide array of products and our environment, allowing a vast network to collect data, analyze input, and automatically coordinate collective action.

imitation-resistant value chain

A way of doing business that competitors struggle to replicate and that frequently involves technology in a key enabling role.

How does the Amazon Marketplace offer two-sided network effects? Besides network effects, what additional benefits does Amazon gain by allowing other retailers to sell potentially competing products on Amazon?

Amazon Marketplace offers a two-sided network because it connects customers with a product from another company, as well as allowing the customer to purchase directly from Amazon. Amazon gains a bigger customer base by allowing companies to use their services to sell products. Amazon can charge a premium because third-party vendors want to take advantage of Amazon's massive client base, as well as the ad service that can promote their product farther than they ever could. Another advantage is that Amazon sometimes doesn't even have to ship products from these vendors, essentially making money without even touching the product.

Goodwill

An accounting term for an intangible asset above and beyond the operations value of the firm. Goodwill can include the perceived value of the company's brand name, customer base, and loyalty, positive employee relations, as well as proprietary technology and patents.

Omnichannel

An approach to retail that offers consumers an integrated and complementary set of shop, sales, and return experiences (e.g., retail store, online, and sometimes even phone and catalog).

Liquid

An asset which is liquid can be easily turned into cash. Stocks of public companies traded on major exchanges are highly liquid. Private shares in a company that has not yet gone public are illiquid since there is not a readily available public market.

Bitcoin

An open source, decentralized payment system (sometimes controversially referred to as a digital, virtual, or cryptocurrency) that operates in a peer-to-peer environment, without bank or central authority.

Think about being a first-mover as a platform provider. What are the advantages of moving early? What are the disadvantages of moving early?

As a first-mover, you are the first company to get your product working and into the market. Jeff Bezos said that he believed AWS had a seven year head start before there was any "like minded" competition. An advantage of Amazon moving early is that they have a greater amount of data surrounding their platform as opposed to a company that came in after them. This gives them the ability to fix problems and monitor the way people interact so they can be the most efficient and profitable. Some disadvantages of being an early mover are that you could hastily rush into a market without the resources required to be sustainable, and your business could fail. Amazon used advantages such as big share, customer lock-in, internal learning, and a network effect to grow AWS and it is now responsible for the majority of Amazon's profits. Brand could build scale early, could collect data, switching cost, two sided network effect

Private

As in "to go private" or "take a firm private." Buying up a publicly traded firm's shares. Usually done when a firm has suffered financially and when a turnaround strategy will first yield losses that would further erode share price. Firms (often called private equity, buyout, LBO, or leveraged buyout firms) that take another company private hope to improve results so that the company can be sold to another firm or they can reissue shares on public markets.

Straddling

Attempts to occupy more than one position, while failing to match the benefits of a more efficient, singularly focused rival.

Consider the PC, smartphone, or gaming console in front of you. Limitations due to Moore's Law may mean that there is a limited amount of computing power on your device. a)How can cloud computing make these devices seem more powerful? b)Give examples of when using a powerful, remote, cloud computing resource might work well to enhance computing on a local device, and mention when the cloud might be less effective. c)What is the main constraint in your example?

Cloud computing helps take information from an organization or individual and puts it on the internet. This frees up the device to run faster, and more efficiently because there is less stored on the physical device. One example of cloud computing is Blackboard. It works well because my device doesn't have to store all the information and it can be accessed just by going to the website. This is less effective at specific times because tons of people will get on Sunday night to finish assignments and the servers can't handle the pressure. The main constraint in the example above is usage. the cloud is fast enough to store everything but the internet is not fast enough to operate if the info is sent back

How can a company use information technology to achieve competitive advantage? What are the dangers of relying on an innovation based on technology alone? Provide an example.

Companies can use their resources to create ads that draw attention to their product on many different social media platforms. AT&T is a good example for a company who is using ads to push people to switch to their internet. In Oxford, AT&T is about to launch Fiber and due to location, ads have increased for those that live in the area. A danger for relying on innovation solely based on technology is that a trend could be analyzed poorly and it could result in a loss of money. Technology is very easy to copy. They can collect data from their users like Netflix. Data, Brand, use technololgy to build switching cost, scale, and network effect help companys achieve competitve advantage

Logistics

Coordinating and enabling the flow of goods, people, information, and other resources among locations.

fixed costs

Costs that do not vary according to production volume.

What is crowdsourcing? What are some possible ethical issues involved in crowdsourcing? What are the possible factors that may lead to an increased likelihood that a crowd-sourced project will fail (name and explain at least three, in addition to possible ethical issues)?

Crowdsourcing is the act of taking a job that is traditionally performed by an employee. and outsource it to an undefined, generally large group of people in the form of an open call. Some possible factors that could lead to a crowdsourcing failure are; not being diverse, not being decentralized, not offering a collective verdict, and not allowing independence. An ethical issue that could be involved in crowdsourcing is trying to understand the reason people want to be involved in the crowdsource.

Greige

Goods to be further customized based on designer/manager collaboration.

Many well-meaning individuals thought that recycling was the answer to the e-waste problem. a)Why is it difficult to recycle e-waste? b)Why hasn't e-waste recycling yielded the results hoped for? c)What lessons do the challenges of e-waste offer the manager? d)What issues will your firm need to consider as it consumes or offers products that contain computing components?

It is difficult in America because people tend to not recycle much for non e-waste, and it is cheaper to recycle it in other countries. E-waste recycling hasn't yielded the results hoped for because it isn't something American companies want to deal with. 43 American companies illegally sold e-waste to forgeign countries because they don't want to deal with it. The mercury, lead, and other toxic materials make it hard to deal with. The manager has to decide whether he wants to spend more money on recycling e-waste, or appease the ethical crowd and do the recycling. We need to consider how to best create them and dispose of them. Apple said they want to make all of their products from renewed material, and I think that a great way for a company to function, as long as the capitol is available. If we want to be super efficient, we could set up a system where we just have people send us their old products and we recycle them ourselves and make them into our new products.

viral marketing

Leveraging consumers to promote a product or service.

What are the risks and benefits to Netflix in using Amazon's cloud computing network? Why did Netflix develop its own content delivery network (CDN)? Be sure to explain this in terms of achieving sustained competitive advantage through the integration of strategy, business model, and technology/information systems implementation.

Netflix benefits from using AWS by having their billing and other items accessible there, because it frees up their delivery network to provide faster streaming. A risk of having their streaming delivery content service on AWS is that Amazon could prioritize their own streaming service and make Netflix streaming slower and people might switch to another provider. Netflix developed their own content delivery network (CDN) because if they used another provider, they could lose their competitive advantage and not have the fastest possible streaming. The strategy is to be the first and the business model is to charge a flat fee to access all their content. Their technology means that they are the fastest provider with the highest possible streaming quality.

We have discussed how Zara's vertical integration strategy has been very successful. What did Netflix build for content distribution in the consumer's home that would have provided for vertical integration beyond making its own films and building its own content distribution network? How did Netflix choose to enter this part of the market?

Netflix built Roku to act as a vertical integration into the consumer home and stream Netflix through its own product. The Roku is a Netflix creation, but it went under the name Roku to not have any direct ties to Netflix in order for a wider variety of consumers to buy their product. The Roku wouldn't have been as successful if it had Netflix in its name because people may have been confused that they would have to be a Netflix subscriber in order to use the other functionalities of the Roku. Netflix chose to keep itself out of the market because there were other big competitors such as the Amazon Fire Stick.

What type of software does Netflix use to make movie recommendations? Which key competitive resource does this software "create"? What kinds of benefits does this provide to (i) Netflix and (ii) Netflix's suppliers?

Netflix uses Cinematch, a collaborative filtering software, to determine different recommendations based on things you watch. This would help with DVD rentals because the software would find similar movies in the closest warehouse and then send those to people's houses. This is an example of the massive advantage Netflix has due to their great vertical integration and effective supply chain management. This personalizes the pool of movies you would draw from, keeping your business with Netflix and not a competitor.

strategic positioning

Performing different tasks than rivals, or the same tasks in a different way.

PDAs

Personal Digital Assistants, an early name for handheld mobile computing devices.

What is price elasticity? How does Moore's Law relate to this concept? What's special about falling chip prices compared to price drops for products like clothing or food?

Price elasticity is the rate at which a demand for a product or service fluctuates with price change. This relates to Moore's Law because as products become better and cheaper, consumers will buy more tech products because they are becoming cheaper. Fast, cheap technology enables new markets to come out of innovation and price fluctuation. People (companies, etc.) will find new ways to use new chips, as well as, continue to use the older chips for different things. Contrast this with what happens in a food price drop and you can see that if the price of a food product drops, it typically means no one is buying it. For example, in retail clothing stores, if they can't sell a seasonal product they will cut the price in half in hopes of selling it. The chips have more function than food or clothing, and a price drop in chips would just continue to result in innovation for the industry.

dynamic pricing

Pricing that shifts over time, usually based on conditions that change demand (e.g., charging more for scarce items).

liquidity problems

Problems that arise when organizations cannot easily convert assets to cash. Cash is considered the most liquidasset—that is, the most widely accepted with a value understood by all.

What three interrelated forces threaten to slow the advancement of Moore's Law? Which commercial solutions are currently being used to counteract the forces mentioned above? How do these solutions work? What are the limitations of each?

Size, heat, and power are three forces that threaten to slow the advancement of Moore's Law. For PC's, fans and liquid cooling products are the main source of keeping the system cool. Big companies are starting to submerge server farms under water in an attempt to keep everything cooler in a more controlled environment. Companies have stated that they pay more to power their servers than for the servers themselves, which is a threat to Moore's Law because at some point it could be too costly to even continue advancing chips if they cost so much to power. The limitation of size is that at some point chips won't be able to get any smaller and will yield to the laws of nature. As stated above, heat and power are very costly and at some point cost might outway the gain. Smaller is more difficult to dicipate the heat. Fans and cloud counteract the forces.

What distinguishes social media and peer production sites from the prior generation of Internet sites? How important is this to managers and marketers and why?

Social Media and Peer Production sites differ from the prior generation of internet sites by leveraging collaboration of users to promote their product or service. For example, Skype and BiTorrent leverage computers from people instead of a central IT resource and it saves money for sponsors and themselves. Managers and Marketers need to utilize the growing user population of social media and peer production sites by letting people do marketing for them. Tesla has never spent a penny on advertisement, however, there are millions of videos on YouTube or pictures on Instagram that give them marketing without having to pay for it. It brings new ways of connecting customers to products, the new networks are built to have viral effects

At Zara, expenses are reduced and efficiency and customer service are improved by the use of RFID technology. Is this just operational effectiveness - yes or no? Why do you think that is? Be sure to discuss why Zara's RFID rollout has been less problematic than those at Walmart and JC Penny.

Strategic Competitive Advantage can't be obtained through operational effectiveness alone. Operational effectiveness alone would drive you out of business. RFID technology is important for Zara because it increases their efficiency by using scanning technology to make their operations run smoother. RFID technology also makes inventory management fast and easy. This helps Zara recognize trends and create products that will sell better than previous installments. Walmart and JC Penny can't do inventory and measuring which products sell the most as well as Zara because of Zara's mastery of the RFID. Zara's ability to recognize trends and which products they need more of, and produce them in house, gives them a sustained competitive advantage over other competition.

What did Amazon's CTO say were the real reasons Amazon developed AWS? What are the key rivals to Amazon doing? Why do you think these rivals do or do not have a chance to catch AWS?

The real reason AWS was developed was to monetize the firm's expertise in scalability and reliability and turn this into a revenue-generating business. Amazon offers their services to companies around the world and by doing so they also use their own services and don't have to pay to use another. Microsoft has been discounting services in an effort to grab more market share, and IBM purchased Red Hat to improve their cloud offerings. These companies are feeling threatened by Amazon and they are doing what they believe will help them stay in the industry. It is possible for companies to catch Amazon, however their significantly large head start is going to make that immensely harder. Amazon is once again proving it is the best company in another industry, and it is highly unlikely for any company to catch them with its significant switching costs and network effects.

value chain

The set of activities through which a product or service is created and delivered to customers.

economies of scale

When costs can be spread across increasing units of production or in serving multiple customers. Businesses that have favorable economies of scale (like many Internet firms) are sometimes referred to as being highly scalable.

Could a new competitor match Netflix's recommendation software? If it did, would this create a threat to Netflix? Why or why not?

Yes, a competitor could create the same software and try to replicate the success Netflix has had, however, they wouldn't be a threat because of the immense capital they would have to spend in order to match Netflix on the scale of servers, supply chain, and vertical integration. Overall, it wouldn't be profitable to try and replicate what Netflix has done without having an immense amount of capitol.

What is meant by "vertical integration" in design and manufacturing in the fashion industry? In what ways is the Zara model counterintuitive? Discuss at least two ways Zara's business model and the factors Zara focuses on to ensure a strong profit margin has made the firm a better performer than Gap and other competitors.

Zara uses RFID technology to run their business more efficiently and effectively than other competitors. They create everything in house, and this technology allows them to scan, ship, and stock items in a quick manner that allows them to make more money. RFID provides a good tracking system for customers to get their product, as well as encouraging them to continue buying from Zara. Zara spent a lot of money on perfecting vertical integration through creating new technology. It is counterintuitive because they cut their profits initially, but make more in the end because of the technology they created. Zaras salespeople are motivated because sallary relies on sales.

Big firms fail to see disruptive innovations as a threat because:

they primarily focus on the bottom line

collaborative filtering

- A classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience.

scale advantages

Advantages related to size.

Porter's five forces

Also known as Industry and Competitive Analysis. A framework considering the interplay between (1) the intensity of rivalry among existing competitors, (2) the threat of new entrants, (3) the threat of substitute goods or services, (4) the bargaining power of buyers, and (5) the bargaining power of suppliers.

network effects

Also known as Metcalfe's Law, or network externalities. When the value of a product or service increases as its number of users expands.

Sarbanes-Oxley Act

Also known as Sarbox or SOX; US legislation enacted in the wake of the accounting scandals of the early 2000s. The act raises executive and board responsibility and ties criminal penalties to certain accounting and financial violations. Although often criticized, SOX is also seen as raising stakes for mismanagement and misdeeds related to a firm's accounting practices.

What type of industry did the textbook indicate that Amazon's unique customer data asset has allowed the firm to enter? Which firms does this bring Amazon into competition with?

Amazon is entering the advertising industry. They track cookies from customers and track what they like or don't like, then they compare that with other people to determine what suggested products should be offered to which people. Their unique customer data set allows Amazon to go beyond what Google and Facebook can do, and is a contributing factor to the rise of Amazon's ad industry.Amazon is entering advertising and marketing industry.

Why would a corporation, an executive, a news outlet, or a college student want to blog? What are the benefits? What are the concerns? What advantage do blogs have over the traditional mainstream media counterparts (MSM)? What advantage does the MSM have over the most popular blogs?

A good reason to start a blog is so that feedback can be attained. Blogs typically offer two-way dialogue, meaning that people can talk to the writer or amongst themselves. This brings the opportunity for ideas, positive or negative feedback, marketing, and loads of other topics anyone could discuss. A big advantage for corporations that blog is that they can receive instant feedback from real people, and they can bypass mainstream media to do so. Blogs are easy to use, can always be read, and have tags and trackbacks to help create a more efficient experience for the writer and the user. A downside to blogs is that the comment sections can be a hothouse for spam and the disgruntled. It can be hard for companies to stop employees from blogging and spreading bad things about the company. Blogs have an advantage over mainstream media in the way that journalists can't change the words of people speaking, and they can be more transparent about what they want to say. Mainstream media has the advantage of being "mainstream" and can reach a larger audience than a blog can.

bandwidth caps

A limit, imposed by the ISP (e.g., a cable or telephone company) on the total amount of traffic that a given subscriber can consume (usually per each billing period).

Cookies

A line of identifying text, assigned and retrieved by a given Web server and stored by your browser.

decision fatigue

A phenomenon, akin to congestion effects for attention, where consumers avoid selection decisions with an overwhelming number of choices

Augmented-reality

A technology that superimposes content, such as images and animation, on top of real-world images.

What does backward compatibility mean and why is this important? What happens if a firm is not backward compatible?

Backward compatibility is when a new product can support something from an older generation of products. The best example of this is through video game consoles. As talked about in class, Nintendo had wild success with their 8-bit NES model and created a massive user base. Nintendo created the SNES and it was a 16-bit model that didn't support the games from the 8-bit NES. The lack of backwards compatibility hurt Nintendo because their customers from the 8-bit felt no staying power and they couldn't use old games so there were no complementary benefits. Today, Xbox rules backwards compatibility, offering games from its first generation of consoles. Playstation has not adopted a good backwards compatible system and if people want to enjoy old games, they will buy an Xbox. Microsoft even embedded the xbox with the ability to play PS2 games, something the newest Playstation consoles don't offer. Backwards compatibility is important for companies in order to reach larger crowds, and keep the player base buying every console.

Benefits of Blockchain Technologies include all of the following except:

Blockchains have a highly centralized controlling agency that prevents fraud, corruption, damage, hacking, or government shutdown

Once a firm spots a potential disruption, what is the best thing for it to do?

Build a portfolio of options on emerging technologies, investing in firms, startups, or internal efforts, because options give the firm the right to continue and increase funding as a technology shows promise

Non-Practicing Entities

Commonly known as patent trolls, these firms make money by acquiring and asserting patents, rather than bringing products and services to market.

Coopetition

Coopetition or frenemies is a situation where firms may both cooperate and compete with one another.

What were Netflix's sources of competitive advantage in the DVD-by-mail business over the major competitors who tried to enter this market? Name at least 3 of these sources of competitive advantage and explain how Netflix was able to possess them while their competitors did not.

Early entry is a big competitive advantage for Netflix. This gave them the opportunity to establish themselves as the premier, online model for movie rentals. Scale is also a competitive advantage for Netflix because of how large their company actually is. A data asset is another competitive advantage for Netflix. Netflix created huge brand, data, network effect, scale and longtail.

channel conflict

Exists when a firm's potential partners see that firm as a threat. This threat could come because it offers competing products or services via alternative channels or because the firm works closely with especially threatening competitors.

fast follower problem

Exists when savvy rivals watch a pioneer's efforts, learn from their successes and missteps, then enter the market quickly with a comparable or superior product at a lower cost before the first mover can dominate

sustainable competitive advantage

Financial performance that consistently outperforms industry averages.

How does Gap organize its manufacturing of clothes, for example, who designs and makes their clothes? Why do it this why? What are the risks to this approach?

Gap does contract manufacturing, unlike Zara. they do contract manufacturing to lower overall cost. One risk is that it takes a longer time to produce items as opposed to keeping it in house. Another risk is that factories could act in an unethical way, for example, a sweatshop.

What kinds of strategic assets are Google's Android and Apple's iOS seeking to create and exploit? What will make these firms more successful than rivals?

Google and Apple create the simplest version for their OS, providing easy access for those at all ages to use. They have captured the cell phone market throughout the United States, and created a standard for the entire industry to follow. Apple has the most popular app store in the market, and that has exponentially shot their firm ahead of everyone else. They are larger than others, they way they build their products generates scale when someone uses it, they use network effects

long tail

In this context, it refers to an extremely large selection of content or products. The long tail is a phenomenon whereby firms can make money by offering a near-limitless selection.

Why do information and applications spread so quickly within networks like Facebook? What key concept described in Chapter 2 does this foster?

Information spreads like wildfire when it goes "viral" on the internet. The more people that see a product or service when it goes viral, the higher the value will rise because of the network effects. When Elon Musk shattered the window of his Cybertruck on a livestream, the internet exploded and millions of people were drawn to Tesla because of this viral moment. The value of Tesla climbs each time Elon Musk does something, and this can be partially attributed to the viral nature of the internet. Viral effects can be fantastic or devastating for companies, but it brings a big possibility of giving a company an opportunity to grow.

IPO

Initial public stock offering, the first time a firm makes shares available via a public stock exchange, also known as "going public."

What are the reasons it is so difficult for late-moving, incompatible rivals to compete in markets where a dominant, proprietary standard is present? Bonus: how is technological leapfrogging related to this problem?

It is difficult for late-movers to come into a market because people become familiar with the existing products. For example, Apple phones have become the norm in America. Everyone that I know uses an iPhone and it is understandable why it is so popular. It is pretty simple to use, looks good, and everyone else uses one. There is a big network effect created by Apple and its products, and it is hard for other companies to break down the barriers and get their product popular. Technological leapfrogging is when a new technology is so superior to existing technology that its value overcomes the total resistance that any older technologies might enjoy via exchange, switching cost, and complementary benefits. A late mover would need to exercise technological leapfrogging if they wanted to infiltrate a market where there is a dominant force such as Apple.

What is Moore's Law? What does it apply to? Why is Moore's Law important for managers? How does it influence managerial thinking?

Moore's Law states that chip performance doubles every 18 months. It applies to chip based technology, including microprocessors and RAM. The economics behind Moore's Law are important because they show that as time goes on there will be better products for the same price, this could also lower the price of the older generation of parts. A manager needs to focus on this because Moore's Law opens new markets due to its constantly changing nature. Managers need to consider where their market is going, in order to stay on the forefront of their respective niche. It is a target

Why can't Netflix secure a long tail of streaming content that is the same size as its content catalog in the DVD-by-mail business? What is Netflix doing to make its streaming catalog more appealing than rival offerings?

Netflix can't secure a long tail of streaming content the same size as its DVD business is because every DVD can be charged for rent, and this isn't the case for online streaming. Netflix has to pay whenever content is streamed which is very expensive

contract manufacturing

Outsourcing production to third-party firms. Firms that use contract manufacturers don't own the plants or directly employ the workers who produce the requested goods.

APIs

Programming hooks, or guidelines, published by firms that tell other programs how to get a service to perform a task such as send or receive data. For example, Amazon provides APIs to let developers write their own applications and websites that can send the firm orders.

How have robots changed the way Amazon warehouses operate? Does Amazon buy most of its warehouse automation software from others or is most of the software written in-house? What does this mean in terms of operational effectiveness versus sustained competitive advantage?

Robots have created a much more efficient environment in the Amazon warehouses. Over time, the initial investment of making these robots will be cheaper than paying people to do the same jobs. The robots can carry hundreds of pounds when they move shelves. Amazon bought a software company called Kiva Systems and they helped implement the robots into the warehouses. Yes, Amazon creates its in-house software because of owning different coding companies, such as Kiva. Because Amazon writes their own code, they understand the best ways to do things because they collect data from every sale, and this can be used to eradicate errors in the warehouse setting. This helps Amazon sustain competitive advantage because they have much more data on how to run a warehouse with robots, as opposed to a company who just has a warehouse with robots.

RFID

Small chip-based tags that wirelessly emit a unique identifying code for the item that they are attached to. Think of RFID systems as a next-generation bar code.

inventory turns

Sometimes referred to as inventory turnover, stock turns, or stock turnover. It is the number of times inventory is sold or used during a given period. A higher figure means that a firm is selling products quickly.

Consider the Amazon Fire devices - Fire TV, Fire Tablets, etc. What specific operating system do Fire devices use? How does this choice of operating system impact the firm's network effects from complementary products?

Talked about in the zoom class. Android Fire OS gives the opportunity for all of their products to be connected by the same software, creating better synergy when consumers own more than one product. Its a special version of the android operating system and amazon creates its own version. choosing to run your own operating system can give you and advantage

Does technology lower barriers to entry or raise them? Do low entry barriers necessarily mean that a firm is threatened? Provide an example of a company in an industry that has low barriers to entry, but is not threatened. What makes this firm successful?

Technology lowers barriers because its easy to copy and get into an industry that relies heavily on technology. . No, low barriers do not necessarily mean a firm is threatened because they could have the advantage of being the first to enter a market and create a better system. They need brand, scale etc...An example we came up with was Jinsei (sushi) being unthreatened by any opposing nice sushi restaurant. Another one we thought of was Chick Fil A being unphased by Popeye's chicken sandwich. These firms are successful because they don't waiver in the face of competition, while still providing their customer base with the best product.

return on investment (ROI)

The amount earned from an expenditure.

Showrooming

The concept where customers browse at physical retailers, but purchase products from lower-cost online rivals.

switching costs

The cost a consumer incurs when moving from one product to another. It can involve actual money spent (e.g., buying a new product) as well as investments in time, any data loss, and so forth.

marginal costs

The costs associated with each additional unit produced.

price transparency

The degree to which complete information is available.

Operations

The organizational activities that are required to produce goods or services. Operations activities can involve the development, execution, control, maintenance, and improvement of an organization's service and manufacturing procedures.

distribution channels

The path through which products or services get to customers.

churn rate

The rate at which customers leave a product or service.

resource-based view of competitive advantage

The strategic thinking approach suggesting that if a firm is to maintain sustainable competitive advantage, it must control an exploitable resource, or set of resources, that have four critical characteristics. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable, and (4) non substitutable

brand

The symbolic embodiment of all the information connected with a product or service.

Which of the following is true of disruptive technologies?

They come to market with a set of performance attributes that existing customers have not yet demanded

Affiliates

Third parties that promote a product or service, typically in exchange for a cut of any sales.

point-of-sale (POS) system

Transaction processing systems that capture customer purchases. Cash registers and store checkout systems are examples of point-of-sale systems. These systems are critical for capturing sales data and are usually linked to inventory systems to subtract out any sold items.

vertical integration

When a single firm owns several layers in its value chain.

Which one of the following is not true about Bitcoins?

Which one of the following is not true about Bitcoins?