Competing with info tech

TiVo was a high-flying firm, whose name was synonymous with digital video recording. Why has the firm struggled to achieve consistent profitability?

(Rival devices offered by cable and satellite companies appear the same to consumers and are offered along with pay television subscriptions—a critical distribution channel for reaching customers that TiVo doesn't control)

The United States holds the number one ranking in home broadband access

False

Total Rewards is an opt-out loyalty program at Caesars

False

Zara's IT expenditure, measured by IT workers as a percentage of total employees, is only slightly higher than the industry average

False

Zara's dominance in the fashion industry is due to its horizontally integrated structure accompanied by a globally dispersed production model.

False

Zara's vertically integrated model is easier for rivals to copy compared to Dell's, as computing is more complex than clothing in terms of number of new models offered.

False

The rise of open source software has lowered computing costs for start-up and blue chip companies worldwide

True

Today's job seekers are writing résumés with keywords in mind, aware that the first cut is likely made by a database search program, not a human being.

True

Zara has managed to reap profits in spite of limited production runs and rarely run sales

True

A low _____ is usually key to a firm's profitability because acquiring a customer is more expensive than keeping one.

churn rate

A firm is said to be vertically integrated if

it owns several layers in its value chain.

information system is an integrated solution that combines five components: hardware, software, data, _____, and the people who interact with and are impacted by the system

procedures

A publicly held company is said to be _____ if its outstanding shares are purchased by an individual or by a small group of individuals who wish to obtain complete ownership and control

taken private

Crowdsourcing is:

the act of taking a job traditionally performed by a designated agent and contracting it out to an undefined generally large group of people in the form of an open call.

In 2012 Inditex revenue was $____ ($22.7B)and the 2015 revenue in Euros is _____. (

1 Euro = $1.098 on 9 march 2016) Euro 20.9B

Which of the following is one of the potential financial vulnerabilities that Zara could be exposed to?

A strong Euro means Zara's Spain-centric costs rise at higher rates compared to competitors

A company uses WebEx, a popular commercial application, to conduct training sessions for its employees who are spread across different countries. This is an example of the impact of technology in the area of _____.

Accounting, operations, marketing, human resources

One contributor to the ease with which young entrepreneurs can have success is low-cost distribution to massive markets worldwide. This is enabled by

App stores

Name at least 3 technology companies that were started by 20 something who went on to became billionaires _______________

Apple, Microsoft, Facebook, Dell

_____ systems are often used to empower employees to track and record data at nearly every point of customer contact. CRM or customer relationship management

CRM or customer relationship management

The nation of_______ has more Internet users than any other country.

China

The technology known as _________________ is helping to fuel the current age of fast-growth technology entrepreneurship. This technology means that a start-up can rent the computing resources one previously had to buy at great expense.

Cloud computing

_____ refers to removing an organization from a firm's distribution channel.

Disintermediation

According to Michael Porter, the reason many firms suffer margin-eroding competition is because they have defined themselves according to strategic positioning rather than operational effectiveness

False

Advantages based on capabilities and data that others can acquire are long-lived

False

At Netflix, the marginal cost for digital goods is zero for all licensees.

False

Elaborate customer surveys help Zara designers predict fashion trends months into the future and design products accordingly

False

Fast growing Groupon was able to dissuade rivals from entering its market because the firm's technology was so difficult to replicate

False

Firms are increasingly shifting spending from the Web to other media such as print, radio, and television as these are often easier to track and analyze.

False

Maintaining large inventories is highly essential for the viability of the fashion industry.

False

Social media and mobile phone use are lowering the corporate ethics and customer service bar for modern managers

False

In two decades, __________'s tech sector has grown from "almost nothing" to a $73 billion industry, expanding even during the recent global recession.

India

Which of the following is true about the Netflix streaming business?

It has attempted to counter rivals with exclusive content by securing exclusive streaming rights for several popular shows.

Choose the correct answer: Why is the "First-Sale Doctrine," including understanding when it does and doesn't apply, relevant to Netflix?

It means content acquisition costs for DVDs are more predictable than streaming costs. In cases of streaming media, it facilitates a shift of bargaining power to content suppliers.

Which of the following represents an advantage enjoyed by the Netflix DVD-by-mail business over traditional video stores?

Larger entertainment selection

What solution has Netflix come up with to address the need to deliver content to customers' televisions?

Netflix provides tools to firms seeking to build Netflix access into their devices.

Netflix enjoys the triple scale advantage of the largest customer base, the largest selection, and the largest network of distribution centers. This can be attributed to:

Netflix's first-mover advantage.

Consider your favorite company which is utilizing information technology to deliver superior value to customers. Looking ahead 3-5 years what in your view should the company watch out for (1 or 2 issues) to maintain it's competitive advantage?

Pick an answer

_____________ also known as the Industry and Competitive Analysis, is a popular framework for examining a firm's competitive environment.

Porter's Five Forces

High-end fashion house Prada's experiment of implementing the latest technology in its flagship store failed because:

Prada managers were enamored with technology and failed to consider implications across all components of the new information systems.

Why do firms need to create separate data repositories for their reporting and analytics work?

Running analytics against transactional data can bog down a TPS.

The _____ is a piece of U.S. legislation that raises executive and board responsibility and ties criminal penalties to certain accounting and financial violations.

Sarbanes-Oxley Act

_______________ has emerged as a catalyst for global change, with Facebook and Twitter playing key organizing roles in uprisings worldwide

Social Media

Factors such as weather, natural disaster, terrorism, labor strife, or political unrest can shut down a firm's operations. Which of the following is one of the measures taken by firms to hedge such risks?

Spreading productions facilities across the globe

____ refers to performing different tasks than rivals or the same tasks in a different way.

Strategic positioning

Information technology has created new opportunities across industries. Provide a brief overview of the different careers in the area of information systems.

Students studying technology can leverage skills in ways that range from the highly technical to those that emphasize a tech-centric use of other skills. Opportunities for programmers abound, but there are also roles for experts in areas such as user-interface design, process design, and strategy. Careers that involve consulting and field engineering are often particularly attractive for those who enjoy working with clients and problems across various industries and in different geographies. Consultants can become partners who work with the most senior executives of client firms, helping identify opportunities for those organizations to become more effective. Technology specialists can rise to be chief information officer or chief technology officer and many firms are developing so-called "C-level" specialties in emerging areas with a technology focus, such as chief information security officer (CISO), and chief privacy officer (CPO)

Which of the following statements about technology is true?

Technological improvements can be copied by rivals, leading to a profit-eroding arms race.

Some of the radical changes brought about by new technologies include:

The creation of an unprecedented set of security and espionage threats.

How has technology changed the marketing landscape?

The skill set of today's marketers is radically different from what was leveraged by the prior generation. Online channels have provided a way to track and monitor consumer activities, and firms are leveraging this insight to understand how to get the right product to the right customer, through the right channel, with the right message, at the right price, at the right time. Savvy firms are using social media to generate sales, improve their reputations, better serve customers, and innovate. Search engine marketing (SEM), search engine optimization (SEO), customer relationship management (CRM), personalization systems, and a sensitivity to managing the delicate balance between gathering and leveraging data and respecting consumer privacy are all central components of the new marketing toolkit)

How is the collaborative filtering software used by Netflix advantageous to the firm?

The software has created an enormous data advantage, that is valuable, results yielding, and difficult for newcomers to match.

________ is the term used to describe some form of business exchange

Transaction

Although sometimes referred to as "rental," Netflix's model is really a substitute good for conventional use-based media rental.

True

Cisco's acquisition of Pur Digital, makers of the Flip video camera line, was largely considered a flop because comparable technology soon became a feature in other popular consumer electronics products

True

Linus Torvalds created the Linux operating system

True

Technology has proliferated in Kenya and Somaliland, with text messages used to replace cash, creating mobile money use that, on a population percentage basis, exceeds any nation in the West

True

The Fair Factories Clearinghouse is subject to network effects

True

The business of streaming video is radically different from DVD-by-mail in several key ways, including content costs, content availability, revenue opportunities, rivals and their motivation.

True

The data a firm can leverage is a true strategic asset when it is imperfectly imitable

True

The high degree of customer satisfaction that Netflix enjoyed is tightly linked with the firm's sized-based advantages

True

How does Zara differ from its competitors in converting ideas into products?

Zara concepts appear in stores in fifteen days on average compared to rivals who receive new styles once or twice a season

In database terminology, a record represents:

a single instance of whatever the table keeps track of.

While the size of the tail in the long tail phenomenon is disputable, one fact that is critical to remain above this debate is that:

customers are attracted to the stores which offer a larger selection of titles.

Netscape, which once controlled more than 80 percent of the market share in Web browsers, lost its dominant position when customers migrated to Internet Explorer, Microsoft's Web browser. Internet Explorer was easy to install and had no significant differences in terms of usability. This example serves to illustrate that:

firms with low switching costs can be easily and rapidly overtaken by strong rivals.

Data becomes _____ when it is presented in a context so that it can answer a question or support decision making.

information

If a customer pays a retailer in cash, he is likely to remain a mystery to the retailer because his name is not attached to the money. Retailers can tie the customer to cash transactions and track the customer's activity if they can convince the customer to use a _____.

loyalty card

Data mining is leveraged by some firms to determine which products customers buy together, and how an organization can use this information to cross-sell more products or services. This area of application of data mining is referred to as:

market basket analysis.

Collaborative filtering is a classification of software that:

monitors trends among customers to personalize an individual customer's experience.

While most discussion on strategy focuses on what a firm should do, an equally important role is to figure out what not to do. An internal team at Netflix developed a prototype set top box to enable the direct streaming of content to customers' television sets. However, the idea of offering it to Netflix customers was dropped because:

of the brutally competitive nature of the consumer electronics business.

The organizational activities that are required to produce goods or services are known as

operations

A(n) _____ is a transaction process that captures customer purchase information

point-of-sale system

ROI is a term used to represent the:

return on investment

A firm's financial performance that consistently outperforms its industry's peers is known as _____.

sustainable competitive advantage

Many firms have developed and deployed innovative information systems, only to see these systems go unused by key staff members. How has Zara helped ensure its systems will be used by staff?

system use drives store success and as much as 70 percent of salaries are tied to sales performance

Knowledge is defined as:

the insight derived from experience and expertise.

According to an independent study, Zara books some 85 percent of its products at full price compared to the industry average markdown ratio of 50 percent. This is made possible by:

the practice of having limited production runs of its designs

Customer lifetime value represents:

the present value of the likely future income stream generated by an individual purchaser.

The set of activities through which a product or service is created and delivered to customers is known as a(n) _____.

value chain

As the world's largest chain of coffee houses, Starbucks sources most of its raw materials such as coffee beans and vegetables from suppliers owned by it. It also holds equal or majority stakes in most of the foreign direct investment it carries out in other countries to set up franchisee coffee shops. Based on this information, Starbucks can be said to be:

vertically integrated.