Computers in Management Final Exam

Recognize Google's stated mission

"to organize the world's information and make it universally accessible and useful"

How does Amazon Marketplace offer two-sided network effects? How else does Amazon benefit from goods sold via Marketplace versus those goods of which Amazon takes inventory control and sells directly?

(2-sided network effects: products or services that get more valuable as two distinct categories of participants expand (e.g., buyers and sellers) - Amazon Marketplace is an e-commerce platform owned and operated by Amazon that enables third-party sellers to sell new or used products on a fixed-price online marketplace alongside Amazon's regular offerings - Free from the storefront tyranny of shelf space and retail-friendly locations, much of Amazon's appeal as a first-choice shopping destination comes from the firm's vast selection - Amazon capitalizes on the long tail: demand exists even though products aren't popular enough for stores to carry them - Firms that capitalize on the long tail can profitably offer a selection of less popular products - 2-sided network effects: more sellers/products attracts more customers and vice versa

How does Amazon use collaborative filtering?

(collaborative filtering: a classification of software that monitors trends among customers and uses this data to personalize an individual customer's experience) - Moving early and having scale allow Amazon to have an incredible source of data which it uses to better understand various patterns related to recommendations, preferences, customer segments, price tolerance, and more - customers who bought this also bought (recommendations drive revenue) - your Web browser receives a unique tracking string called a cookie (cookie: a line of identifying text assigned and retrieved by a given Web server and stored by your browser) and Amazon tracks your surfing behavior as well as your buying history - Amazon has more data on you if you rate products - The firm's proprietary collaborative-filtering software compares a user's data w/ other's data, mapping a best guess of what you'll like to see each time you visit - As much as 35% of product sales have come from the firm's recommendations - "retargeting:" when you looked at a product on Amazon, didn't buy it, but then started seeing the product pop up in ads as you surfed the Web

convergence, envelopment

(under the Expand by Redefining the Market heading) ____: when 2 or more markets, once considered distinctly separate, begin to offer similar features and capabilities ____: where a firm seeks to make an existing market a subset of its product offering - ex. Apple morphed the iPod into the iPhone which captured all product categories (media players, cameras, gaming devices, phones, and GPS) in one device

What is A/B testing? How's it used at Amazon?

- A/B testing: a randomized group of experiments used to collect data and compare performance among 2 options studied (A & B). It's 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 Web site. Amazon, Google, and FB are firms that aggressively leverage hundreds of A/B tests a year in order to improve their product offerings - A/B testing has allowed Amazon to become one of the best "converting" (getting customers to complete checkout once there's products in their cart) commerce sites - the firm has relentlessly experimented w/ tests that modify and compare all sorts of variables like wording associated w/ images and buttons, screen placement, size, color, and more - one test revealed that a 10th second's delay in page loading equaled a 1% drop in customer activity, pointing to a clear ROI (return on investment) for keeping server capacity scalable - Amazon's gotten so good at A/B testing that it launched a service (Amazon A/B Testing Service) which lets you easily optimize your apps by distributing test to a portion of customers and observing how successful each test is before launch - All w/o republishing your app

What are a few basic cloud computing services available to individual consumers and firms of all sizes?

- AWS (Amazon Web Services) - ex Amazon cloud player and Amazon cloud drive - provides a complete set of Cloud Computing services that enable businesses and developers to build scalable applications according to their needs - specific services include: computing, networking, storage and content delivery, databases, deployment, management, application services, backup and disaster recovery - SaaS (Software as a Service): firm subscribes to a 3rd party software and receives a service that is delivered online; like Google Drive - PaaS (Platforms as a Service): cloud providers offer services that are used by customers to build their own applications on the provider's infrastructure. Services include hardware, operating system, tools, and hosting - IaaS (Infrastructure as a Service): cloud provides offer services that include running the remote hardware and networking, client firms can choose the software used

Understand Amazon's expansion into the consumer cloud-based offerings (AWS) and the size of this business compared to other divisions (now and potentially in the future)

- AWS, the company's cloud infrastructure business catering to other companies, has quickly grown from a smaller side business to a billion-dollar success and the main driver of Amazon's sparse profit; in Q4 2016, Amazon's cloud arm generated 3.5 billion in revenue and accounted for more than 70% of the company's 1.3 billion operating profit

How is the Cash Conversion Cycle a source of competitive advantage for Amazon

- Amazon has a negative CCC because it collects cash from customers before distributing funds to its suppliers - This cash cycle is a powerful benefit of Amazon's fast-fulfillment model offering an edge over rivals- keep inventory turns high and pay suppliers later - a negative CCC is an interest-free way to finance operation and invest in growth through "borrowing" from suppliers in the regular course of the e-commerce business

Provide/recognize a few ways Amazon benefits from economies of scale and scale advantages

- Amazon operates 11 global marketplaces around the world - These markets represent many of the world's largest e-commerce opportunities - Amazon's sales volume scale enables it to operate with thin margins and low prices; it has the financial stamina to endure an unprofitable price war - Also enables it to offer cheaper prices - Allows them to engage in dynamic pricing: they monitor the availability of products at competitor websites and use stockouts as an opportunity to earn more, they sometimes raise their prices by as much as 10%

Understand Amazon's inconsistent financial performance as well as their long-term outlook with respect to investing in initiatives and commitment to building scale and growing a profitable business

- Amazon's profitability has varied widely, and analysts continue to struggle to interpret the firms future - massive investments in 2012 crushed their profits - their profits/expenses ratio doesn't do them justice bc they're constantly investing all profits into getting bigger - Amazon takes a relatively long view w/ respect to investing in initiatives and its commitment to growing profitable businesses. The rough 7-year timeline is a difficult one for public companies to maintain amid the pressure for consistent quarterly profits - "very few competitors are willing to invest on a seven-year time horizon; by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue" - "we're willing to plant seeds and let them grow"

Heavy is the head that wears the crown, and with scale and influence come increased scrutiny. What are some legal/regulatory issues facing Google? How (generally) has Google handled these challenges?

- European and US regulators have investigated Google for anti-trust violations and, at least initially, have reached different results, demonstrating the challenges dominant firms face as they grow globally - With scale and influence comes increased governmental scrutiny: Google has increasingly become a target of antitrust regulators. The extent of this threat is unclear. Google's extreme influence is clear. However, the firm's software is based on open standards; competitors have a choice in ad networks, search engines, and other services; switching costs are relatively low; users and advertisers aren't locked into exclusive contracts for the firm's key products and services; and there is little evidence of deliberate, predatory pricing or other "red-flag" activity that usually brings government regulation.

What are a few of the strategic issues and competitive challenges facing Alphabet in the emerging multifront tech industry battlefield on which it is situated?

- Facebook's ad network may pose an especially worrisome threat, as some suggest that Facebook's profile contains more accurate demographics than Google collects - switching costs for search users are incredibly low

Recognize large firms investing in/partnering with collaborative consumption initiatives (or starting their own); or provide one specific example

- Google is a substantial investor in Uber - Conde Nast invested in Rent the Runway - Walgreens has partnership with Task Rabbit - IBM has delivery deal with Deliv - General Motors invested in Lyft - Avis acquired ZipCar

Recognize the rise and impact of social media and peer production systems (supported by the rise of mobile computing) for individuals, businesses, and society. The examples in Section 9.1 would be great fodder for an optional essay question about the impact and reach of social media.

- Half of the world's top ten most heavily trafficked Internet sites are social: Facebook, YouTube, Wikipedia, Tencent QQ (China), and Twitter. US users now spend more time with social media than on any other category of Internet use. - The population of Facebook users is now so large that it could be considered the largest "nation" in the world. Over seventy percent of the site's users log in at least once a day, spending an average of fifty-two minutes a day on the site. [8] Facebook is solidly profitable and revenues have been growing with astonishing speed (more than $17.93 billion in revenues and $3.7 billion in profits in 2015). - All of the top ten most-used apps worldwide are social. In addition to those mentioned above, the remaining three apps are Facebook, Instagram, and Twitter. Only Clash of Clans isn't what one would call conventional social media, but it's a social game. - Facebook and Twitter have become activist tools and have played vital roles in supporting protest movements worldwide. China and Iran are among the governments so threatened by the power of these services that each has, at times, blocked Facebook and Twitter access within their borders

Provide 1 example of a firm that uses Amazon Web Services

- Instagram - Netflix - Etsy

Recognize the 3 major categories of cloud computing:

- SaaS (Software as a Service): firm subscribes to a 3rd party software and receives a service that is delivered online; like Google Drive - PaaS (Platforms as a Service): cloud providers offer services that are used by customers to build their own applications on the provider's infrastructure. Services include hardware, operating system, tools, and hosting - IaaS (Infrastructure as a Service): cloud provides offer services that include running the remote hardware and networking, client firms can choose the software used

- How do blogs exhibit the long tail phenomenon?

- Tumblr reported hosting nearly 228 million sites - WordPress is said to power nearly a quarter of Internet sites - ____ ____ phenomenon because loaded w/ niche content that remains "discoverable" through search engines and that is often shared via other types of social media like FB and Twitter

How does Uber use data and APIs for competitive advantage? Recognize/provide 1—2 examples.

- Uber leverges data to power the firm's operational model, alert drivers, improve service, set pricing, and even identify possible cities to enter - ex. Uber's "God View" which shows every Uber car operating in a city, and every user looking at the Uber app - APIs have allowed Uber to become a platform, expanding its reach through partnerships that make Uber available in other apps - ex. Uber has partners w/ OpenTable, United Airlines, TripAdvisor and Hyatt Hotels

structured, unstructured

- ____ data refers to info with a high degree of organization, such that inclusion in a relational database is seamless and readily searchable by simple, straightforward search engine algorithms or other search operations - ____ data is the opposite; the lack of structure makes compilation a time and energy-consuming task. It would be beneficial to a company across all business strata to find a mechanism of data analysis to reduce the costs unstructured data adds to the organization - unstructured data accounts for more than 90% of all data

Alphabet, Nest, Calico, GV

- ____: an American multinational conglomerate founded in 2015 by Google co-founders Larry Page and Sergey Brin Recognize the diverse endeavors that this company is pursuing and/or provide 1 - 2 specific examples of Alphabet business holdings (other than Google itself) - the parent company of Google - ____: smart-home connected products - ____: research for lifespan lengthening - ____: early-stage venture capital

dashboard

- a heads-up display of critical indicators that allow managers to get a graphical glace at key performance metrics

What is meant by the umbrella term "Web 2.0"? What is one specific example of how Web 1.0 differs from Web 2.0?

- a term broadly referring to Internet services that foster collaboration and information sharing; characteristics that distinctly set "Web. 2.0" efforts apart from the static, transaction-oriented Web sites of "Web. 1.0." The term is often applied to Web sites and Internet services that foster social media or other sorts of peer production - ex. went from Web as a reading platform to Web as a publishing platform - ex. went from instant messaging (SMS) to twitter FB Snap, WhatsApp - ex. went from personal websites to blogging, status updates, and link sharing - ex. short tail to long tail

business intelligence (BI)

- a term combining aspects of reporting, data exploration and ad hoc queries, and sophisticated data modeling and analysis

analytics

- a term describing the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions

Define Network Effects (also known as ____ or ____)

- aka Metcalfe's Law or network externalities - when the value of a product or service increases as its number of users expands

What does it take for data/analytics to be a source of sustainable competitive advantage? When might data/analytics fail to sustain competitive advantage?

- all businesses will need to be data-driven in order to compete because many decisions will be based on predictive elements versus gut instincts - in many orgs, available data is not exploited to advantage, however, new tools supporting big data, business intelligence, and analytics are helping managers make sense of this data torrent - ex. Netflix DVD-by-mail leveraged data for brand strength, operational advantages, and creating switching costs - data analysis doesn't just drive the collaborative filtering software for user recommendations; it's also used to tailor and improve the experience over time - data also help to determine the appropriate cost for acquiring content and inform creative decisions for development of original programming - firms seek to exploit a powerful economic engine called the "data network effect" - using data to attract more users, who then generate more data, which helps to improve services, which attracts more users

Recognize the scope of technology-enabled products/services that leverage artificial intelligence or machine learning as well as business applications of AI and machine learning

- careers as varied as advertising, financial services, medicine, journalism, agriculture, national defense, environmental sciences, and the creative arts are being transformed by AI - machine learning is closely related to (and often overlaps with) computational statistics, which also focuses on prediction-making through the use of computers; it has strong ties to mathematical optimization

What is the role of network effects in sharing economy markets?

- collaborative/sharing firms are two-sided markets, and network effects are present - value needs to be realized on both sides of the market - potential early mover advantages include creating a critical mass of buyers (to attract sellers or vice versa), scale opportunities, brand strength, and financial resources for expansion - cross-side exchange benefits: increase in the number of users on one side of the market creates a rise in the other side - ex. Apple App Store: more iPhone/iPad owners = more value for developers and vice versa - ex. Uber: more riders = more value for drivers and vice versa

owned media

- communication channels that an organization controls. These can include firm-run blogs and websites, any firm-distributed corporate mobile website or app, and organization accounts on social media such as Twitter, FB, Pinterest, YouTube, and Instagram - Visit the Starbucks website? That's media owned by Starbucks

technological leapfrogging

- competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits - ex. Amazon

artificial intelligence

- computer software that seeks to reproduce or mimic (perhaps with improvements) human though, decision making, or brain functions

Understand how/why Amazon is increasingly taking over aspects of its own logistics business

- crunching data and creating infrastructure lets Amazon choose the right shipping partner (including itself) to optimize on factors like speed and cost - Prime Now customers ordering in areas served by a Prime Now hub can get goods fulfilled within an hour or two (and packages may arrive via van, bike, or on foot) - Products outside of Prime Now are sourced at Fulfillment Centers and may be handed off to UPS or FedEx or moved to a Sortation Center where sorted products are passed to the US Postal Service, or go out for delivery in amazon trucks or by private citizen drivers contracting with Amazon

To what extent do you think Alphabet's investment in innovative ventures across such a broad portfolio is a wise business decision? What are some risks?

- it allows them to streamline business segments, build investor confidence, increase operational efficiency, spin off an unprofitable area, and/or manage a portfolio of ventures w/ different underlying business models - the separation between Alphabet's main business, search, and other companies provides the company w/ a "safe place" to carry out experiments - it will also help avoid negative PR through direct association w/ the search engine business - it will also free up Page and Brin from administrative duties at Google and enable them to focus their skill sets and energies on building new products and services

machine learning

- leverages massive amounts of data so that computers can act and improve on their own without additional programming

legacy system

- older information systems that are often incompatible with other systems, technologies, and ways of conducting business - Incompatible ones can be a major roadblock to turning data into information, and they can inhibit firm agility, holding back operational and strategic initiatives

To understand the key sources of network value, it's important to recognize the structure of the network. Define (and provide or recognize an example of): one sided markets: same-side exchange benefits; two sided markets: cross-side exchange benefits

- one-sided market: a market that derives most of its value from a single class of users (e.g., instant messaging) - same-side exchange benefits: benefits derived by interaction among members of a single class of participant (e.g., the exchange value when increasing numbers of IM users gain the ability to message each other - ex. WhatsApp - two-sided market: network markets that comprise two distinct categories of participant, both of which that are needed to deliver value for the network to work (e.g., video game console owners and developers of video games) - cross-side exchange benefit: when an increase in the number of users on one side of the market (console owners, for example) creates a rise in the other side (software developers) - ex. Uber

Describe/recognize a few of the challenges associated with of safety and regulation facing firms and markets in the sharing economy. Who are the stakeholders?

- participating in the sharing economy raises new questions for insurers - tax and regulatory issues - governments and well-funded lobbies resisting change (taxi and hotel owners) - Will 'contract worker' classification hold? Instead of actual employees, they may not receive the important workplace protections like minimum wage, overtime compensation, insurance, etc. - payment collection can be challenging - the people (us) are the stakeholders?

Cash Conversion Cycle

- period between distributing cash and collecting funds associated w/ a given operation (e.g., sales)

What is a prediction market?

- polling a diverse crowd and aggregating opinions in order to form a forecast of an eventual outcome

Social proof

- positive influence created when someone finds out that others are doing something

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 'liquid' asset- that is, the most widely accepted with a value understood by all

What are platforms? How do they support value creation from complementary benefits?

- products and services that allow for the development and integration of software products and other complementary goods - Windows, the iPhone, the Wii, and the standards that allow uses to create Facebook apps are all platforms - they amass a large user base, offer stand-alone value, recruit marquee users, reduce users' risks, and ensure compatibility w/ legacy systems

What are APIs? How do APIs support value creation from complementary benefits? How can APIs lower barriers to entry for programmers/entrepreneurs?

- 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 Web sites that can send the firm orders - APIs allow third parties to integrate with their products and services. Allowing other firms to contribute to your platform can be a brilliant strategy because those firms will spend their time and money to enhance your offerings - it can allow a company to get its products to reach an already-existing user base

earned media

- promotions that are not paid for or owned but rather grown organically from customer efforts or other favorable publicity - Social media can be a key driver of this (think positive tweets, referring FB posts, and pins on Pinterest) - other forms of earned media include unsolicited positive press and positive customer word of mouth - View unsolicited praise of Starbucks in your Twitter feed by folks you follow? That's earned media

paid media

- refers to efforts where an organization pays to leverage a channel or promote a message. Paid media efforts include things such as advertisement and sponsorships - See a Starbucks ad online? That's paid media

inbound marketing

- refers to leveraging online channels to draw consumers to the firm with compelling content rather than conventional forms of promotion such as advertising, e-mail marketing, traditional mailings, and sales calls - successful ones produce interesting content that acts as a magnet for the attention of potential customers - inbound marketers look to attract traffic that is converted to lead that result in sales and hopefully repeat business - Popular blog posts and other forms of social media play a critical role here, as do other online material such as free whitepapers and eBooks - a catchy viral campaign can also bring in customers to an owned channel and gain earned media referrals - ex. P&G's Old Spice Man

cloud computing

- replacing computing resources, either an organization's or individual's hardware or software, w/ services provided over the Internet - it's "the dynamic provisioning of IT capabilities (hardware, software, or services) from 3rd parties over a network

What is an example of a product or service characterized by network effects?

- the App Store

What is crowdsourcing? How have tech firms taken advantage of crowdsourcing?

- the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined generally large group of people in the form of an open call - it tackles challenges through an open call to a broader community of potential problem solvers - There are several public markets for leveraging crowdsourcing for innovation, or as an alternative to standard means of production - can also be used to create a better service - Facebook leveraged crowd wisdom to develop versions of its site localized in various languages

Understand exponential growth of the digital universe and the volume of data available to firms today

- the amount of data being created doubles every 2 years - "between that dawn of civilization and 2003, we only created 5 exabytes; now we're creating that amount every 2 days. By 2020, that figure is predicted to sit at 53 zettabytes (53 trillion gigabytes) -- an increase of 50 times"

big data

- the exponential growth and availability of data, both structured and unstructured, because of the Internet and fast growing technology advancements - a general term used to describe the massive amount of data available to today's managers - it's often unstructured and are too big and costly to easily work through use of conventional databases, but new tools are making these massive datasets available for analysis and insight

last-mile delivery

- the final stage of getting a product to the consumer - typically via a smaller delivery van or other vehicle

Explain the idea known as the "wisdom of crowds".

- the idea that a group of individuals (the crowd), often consisting of untrained amateurs, will collectively have more insight than a single or small group of trained professionals - example with guessing the weight of the cow

data mining

- the process of using computers to identify hidden patterns in, and to build models from, large data sets

What roles do trust and reputation play in the sharing/collaborative economy?

- the sharing economy revolves around trust - if we don't trust individuals, we won't Uber or stay in Airbnbs etc. - trust is shifting from institutions to individuals - ex. Lyft uses social media to establish trust between drivers ad customers

What is a "SMART" team? Recognize the skills and issues involved in creating and staffing an effective "SMART" team. What are the "three Rs" covered by a good social media policy? What are the "four Ms" of engagement and establishing an effective social media presence?

- the social media awareness and response team They want to: - set a social media policy: honesty, transparency, caution in representing a firm, legal issues - monitor (internal and external): tools, online reputation management, deputies - engage: create points of contact w/ trained staff; craft a compelling social media voice; liaison to internal communities - establish first-responders network: train war-game scenarios The 3 Rs: 1) representation: how/if employees are allowed to represent a firm 2) responsibility: employees take responsibility for their actions 3) respect: respect the firm, its customers, and its competitors The 4 Ms: 1) megaphone: it's a megaphone allowing for outbound communication 2) magnet: it's a magnet drawing communities inward for conversation 3) monitoring and 4) mediation: it allows for monitoring and mediation of existing conversations

market capitalization

- the value of a firm calculated by multiplying its share price by the number of shares

congestion effects

- when increasing numbers of users lower the value of a product or service

What is peer production? What is a general trend or business model that leverages peer production and the internet? What is a specific example of a product or service based (all or in part) on peer production?

- when users collaboratively work to create content, products, and services. Includes social media sites, open source software, and peer-produced services, such as Skype and BitTorrent, where the participation of users provides the infrastructure and computational resources that enable the service - open source software, prediction markets, collaborative knowledge, social tagging communities, crowdsourcing, crowdfunding, social media - ex. waze, youtube, wikipedia, amazon, pinterest

blue ocean strategy

- when you redefine the market with convergence or being in a new category of users - ex. iPhone, Wii

Explain why markets governed by network effects might be described as "winner-take-all"

-if it exhibits monopolistic tendencies - network effects might limit the number of rivals that challenge a dominant firm

The value derived from network effects comes primarily from what three sources?

1) exchange 2) staying power - the long-term viability of a product or service - very closely related to switching costs 3) complementary benefits - products or services that add additional value to the primary product or service that makes up a network

What are the three pillars of firm focus in Jeff Bezos's "Wheel of Growth"?

1) low prices 2) customer experience (convenience) 3) vast selection - these 3 things reinforce one another to create additional assets for competitive advantage that include scale, brand, network effects, data, and an imitation-resistant value chain - more customers allow the firm to provide more products, creating scale - exceptional customer experience fuels a strong brand that makes Amazon the first place most consumers shop online

what are some specific strategies that may be useful for firms competing in markets characterized by network effects? (Describing 3 or 4 w/ specific tech-related examples could make a great short answer question.) To what extent does application of these strategies differ for established incumbent firms versus new entrant rivals?

1) move early: being first allows your firm to begin to develop network effects snowball rolling in your direction ex. eBay showed up to the market 5 months after Yahoo! launched its Japan auction service. The language barrier was also an issue, and Yahoo!'s early move also helped them in this respect. 2) leverage viral promotion: it's often possible to leverage a firm's customers to promote the product or service - ex. Skype and WhatsApp users recruited other users to join. "Social proof" with Uber and Airbnb, when people saw their friends doing it, it eased their concerns. Social media helps this!!! 3) expand by redefining the market: aka blue ocean strategy (firms should seek the blue waters of uncontested, new market spaces; if an early mover can use this lead to create defensible assets for sustainable advantage, late moving rivals may find markets unresponsive to their presence) - ex. Wii, Nintendo developed a machine that appeals to families, women, and age groups that normally shunned traditional games 4) alliances and partnerships: firms can use partnerships to grow market share for a network; sometimes these efforts bring rivals together to take out a leader - ex. 4 of Uber's biggest global partners (Lyft, Ola, Didi Chuxing, and GrabTaxi) have formed an alliance to reduce costs, preserve their strength in markets where they lead, and build a global rival to Uber-everywhere. They share technology, local market knowledge, and business resources, w/ the leading firm in each nation handling mapping, routing, and payments. The firms operate regionally and don't really compete w/ each other, which allows users to book cabs from each other's apps in all regions where they operate - incumbent firms may try to make it difficult for rivals to gain compatibility w/ their users, standards, or product complements. They may also create uncertainty among those considering adoption of a rival by preannouncing competing products

What are a few benefits for firms that use cloud computing services/platforms? What are some of the risks associated w/ giving up control of certain infrastructure?

Benefits: scalability, agility, reliability, consolidation, cost savings (labor and hardware costs) Risks: security breach, outages that could impact clients, accountability, customer lock in, cost of change

maturing, stock price, risky

Generally, what are some challenges facing firms in mature industries as they try to maintain growth? - For over a decade, Google's search business has been growing rapidly, but that business is ____ - slower growth will put pressure on the firm's ____ ____, so a firm Google's size will need to pursue very large, ____, new markets - markets that are also attractive to well-financed rivals, smaller partners, and entrepreneurs

mixed, acquired, struggle

Has Google been successful with its social media efforts? - Google's success in social media has been ____ with its 2 biggest success (YouTube and Blogger) being ____ from other firms - Google continues to ____ in social networking and Google+ significantly lags behind FB and Twitter in user engagement and overall users, despite Google's attempts to integrate the service into its core offerings

warehouses, software

How does Amazon's infrastructure compare with that of competitors? How does Amazon compare in terms of revenue and profitability? - Amazon uses ____, makes it so easy and fast for people to shop online that traditional retailers, shackled by fading real estate and a culture of selling in stores, are struggling to compete - While Amazon spends significantly on ____, automation, and expansion of its warehouses, its overall costs for things like real-estate, energy, inventory, and security will be lower than costs for brick-and-mortar rivals - Amazon has more value than all major publicly traded department stores in the US

third, matchmaking

How does Google profit? What advertising industry trend does this reflect? - the firm controls about a ____ of all online advertising dollars - advertising drives profits and lets the firm offer most of its services for free - Google is in the business of ____: pairing Internet surfers with advertisers

software, cost, revenue

How has Google made an effort to catalyze Internet use worldwide? - Google is investing heavily in methods that promote wider Internet access - These include offering free ____ to device manufacturers and several telecommunications and lobbying initiatives meant to lower the ____ of getting online - The firm hopes that more users spending more time online will allow it to generate more ____ through ads and perhaps other services

blogs, wikis, electronic and social networks, micro blogging, messaging services, question and answer sites

Know the six major social media tools outlined in Table 9.3 and recognize key uses and primary features of these tools. 1) ____ - used to share ideas, obtain feedback and mobilize a community - features: immediate publication and distribution; reverse chronological order; comment threads, persistence; searchability - ex. Tumblr 2) ____ - used to collaborate on common tasks or to create a common knowledge base - features: collaborative content creation; all changes attributed; revision history; roll back changes and revert; automatic notification of updates; searchability, tags, monitoring; including hyperlinks, images, and multimedia content - ex. jive, Google Sites 3) ____ ____ ____ ____ - used to discover and reinforce affiliations; identify experts; message people/groups, and virally share media - features: detailed personal profiles; affiliations w/ groups, orgs, and people; messaging and public discussions; multi-media sharing; "feeds" or recent activity; reciprocal relationships - ex. LinkedIn, Instagram 4) ____-____ - used to distribute time-sensitive info, share opinions, spread viral content, run contests and promos, solicit feedback, provide customer support, and track commentary features: character-limited messages sent and received from mobile devices; ability to respond publicly or privately; specify tags to classify discussion topics for easy searching, building comment threads; follower lists, following not necessarily reciprocal - ex. Twitter 5) ____ ____ - uses: most messaging done via mobile devices; send and receive short format text, graphics, links, and video - features: communication can be private or public; communication can be identifying or anon; some focus on specific media (e.g., video); some feature nonpermanent posts - ex. WhatsApp, Snapchat 6) ____-____-____ ____ - used for knowledge sharing; discovery, learning; reputation building; troubleshooting tech - features: public, member-posted questions; permanent listing; searchable repository; community voting; reputation building, ranking, badging to encourage participation - ex. Yahoo! Answers, reddit

resources, markets

Name a few examples of sharing economy firms. What competitive advantages do they seek? - Etsy - Uber - Airbnb - Rent the Runway - Gofundme - Angie's list - the sharing economy allows firms to pool ____, products, and services in ways that create new ____ and market opportunities

error, Kiva, similar

Recognize how Amazon uses tech and systems in fulfillment operations to get products from suppliers to customers quickly and with minimum error; provide or recognize a few specific examples of technology that Amazon uses for efficiencies/advantages in the growing warehouse and logistical system - Amazon's warehouse technology and systems are designed to quickly and cost-effectively get products from suppliers to customers with minimal ____ - ____ robots allow shelves to be slotted closer together and can be qued up for rapid, never-colliding, constant round trips - instead of workers running to shelves, robots now bring 750 pound optimally organized shelves to workers - No two ____ products are situated next to each other, reducing chances that a picker will confuse a size or color or otherwise select the wrong item

segmentation, fraud, financial

Recognize or provide several examples of key areas where businesses are leveraging data mining - customer ____: figuring out which customers are likely to be the most valuable to a firm - collaborative filtering: personalizing an individual customer's experience based on the trends and preferences identified across similar customers - ____ detection: uncovering patterns consistent with criminal activity - ____ modeling: building trading systems to capitalize on historical trends

marginal, hardware, service, barriers

Software industry forces that have driven/accompanied/followed that advent of cloud computing include: - lower ____ costs - network effects - switching costs - decline in high-end server sales - shift from ____ sales to ____ - lower tech ____ to entry supporting entrepreneurship and innovation

all, most

To what extent does competition in markets with network effects differ from competition in conventional markets? E.g. the presence of monopolies and oligopolies - markets governed by network effects are often 'winner-take-____' or 'winner-take-____', exhibiting monopolistic or oligopolistic tendencies - monopoly: a market where there are many buyers but only one dominant seller - oligopoly: a market dominated by a small number of powerful sellers

customer experience, friction, costs

Understand why some collaborative consumption firms control inventory while others outsource inventory/management to citizen supplies. Provide an example of each. - some collaborative consumption firms choose to take possession of inventory rather than enabling a 'crowd' of customers to provide it peer-to-peer style; this helps them better control ____ ____ - ex. Zipcar, Rent the Runway - the "peer-to-peer" marketplace narrative focuses on reducing the ____ between buyer and seller through streamlined transitions and benefit of not having to manage inventory, also helps keep ____ low - ex. Uber, Airbnb

diverse, decentralized, verdict, independent

What are four criteria necessary for a crowd to be "wise"? 1) be ____: so that participants are bringing different pieces of info to the table 2) be ____: so that no one at the top is dictating the crowd's answer 3) offer a collective ____: that summarizes participant opinions 4) be ____: so that each focuses on info rather than the opinions of othes

scale, networks, value, switching costs

What are main sources of competitive advantage for Google? - major ____ advantages in search and network effects in advertising; dominance helps grow a data asset for service improvement - multiple ad ____ make it easier to shift business between firms; Google must offer superior ____ to retain advertisers - Facebook's ad network may pose an especially worrisome threat, as some suggest that FB's profile contains more accurate demographics than Google collects - ____ ____ for search users are incredibly low

recession, alternatives, Social technologies, uncertainty

What are several factors that have contributed to the rise of the sharing economy? - many sharing economy firms were born during a prolonged, worldwide economic ____; stagnant wages boosted consumer interest in low-cost ____ to conventional products and services - This encouraged a whole new class of service people (many facing unemployment) to try their hand at offering services for hire. ____ ____ help new users manage ____ by collecting and sharing ratings, ensuring payment, and offering increased scheduling convenience

black swans, unusual, false positives, overfitting

What are some potential problems with overreliance on "big data" and limitations to analytics in general? - the problem of historical consistency: computer-driven investment models can be very effective when the market behaves as it has in the past. But, models are blind when faced with the equivalent of the "hundred-year flood" (aka ____ ____); events so extreme and ____ that they never showed up in the data used to build the model - ____ ____: sometimes people rush decisions based on a subset of data (thinking fast); a better practice is to "think show" and really rationalize data. W/ big data, thinking fast (not analyzing the data fully) can lead to false positives - ____: building a model with so many variables that the solution achieved may only apply to the subset of data used to create it

consistent, future trends

What are two critical conditions required for data mining to work? Or—in other words—what critical assumptions do we make when using data mining to inform decisions? 1) the organization must have clean, ____ data 2) the events in that data should reflect current and ____ ____

analyzed, incompatible systems, legacy system

What does it mean to be "data rich, information poor"? Why do some firms with access to data struggle to gain information advantages? - a major factor limiting business intelligence initiatives is getting data into a form where it can be ____ and turned into info - operational data can't always be queried because most transactional databases are not set up to be simultaneously accessed for reporting and analysis - ____ ____ are also another issue - ex. ____ ____: older information systems that are often incompatible with other systems, technologies, and ways of conducting business. Incompatible legacy systems can be a major roadblock to turning data into information, and they can inhibit firm agility, holding back operational and strategic initiatives

transaction costs, dynamic, supply, demand

What does the phenomena of the sharing economy have in common? - technology reduces ____ ____, allows for potentially ____ pricing, creates value for sellers and purchasers, and fosters market-based transactions - a platform facilitates matching of ____ and ____ and more efficient use of resources - by leveraging the internet, efficiency is enhanced through streamlined coordination and broader reach

tumblr, jive, instagram, Twitter, snapchat

What is one specific example or tech provider for each of the six major social media tools? (E.g., Twitter as a specific example of Microblogging). 1) blogs - ex. ____, blogger 2) Wikis - ex. ____, Google Sites 3) Electronic and Social Network - ex. ____, LinkedIn 4) Micro-blogging - ex. ____ 5) Messaging Services - ex. WhatsApp, ____ 6) Question-and-Answer Sites - ex. Yahoo! Answers, reddit

social proof, virality, discounts, trust

What role does social media play in the sharing/collaborative economy? - idea of s____ ____ - word-of-mouth sharing and ____ offered by social media accelerate the growth of sharing economy marketplaces - customers can become brand ambassadors - programs where customers receive ____ for sharing the company attracts new customers and builds ____ in the company - downside: crowdsourced ratings can sometimes reflect biases and reinforce discrimmination

value chain

Why do platforms for collaborative consumption work particularly well for fragmented markets? - in uniting highly fragmented markets, collaborative consumption firms extend the ____ ____ by connecting suppliers and customers who would otherwise have to coordinate separately - Most of the Internet-enabled market makers can trace their roots back to once-pioneering, now massively influential firms like eBay and CraigsList, which empowered all sorts of individual sellers and service providers

advertising

Why does Google offer many of its popular services for free? - ____ drives profits and lets the firm offer most of its services for free

(What does it mean to be characterized as part of the) sharing economy (or participating in) collaborative consumption(?)

____ ____: an economic system in which assets or services are shared between private individuals, either for free of for a fee, typically by means of the internet - can involve the re-circulation of goods, increased utilization of durable assets, exchange of services, and/or the sharing of productive assets ____ ____: when participants share access to products and services rather than having ownership; shared resources can be owned by a central service provider or provided by a community that pools available resources - it's considered part of the sharing economy because it means that individuals are renting out their underused assets

data, information, knowledge

____: raw facts and figures ____: data presented in a context so that it can answer a question or support decision making ____: insight derived from experience and expertise

Recognize internal and external sources for firms to collect data

internal sources: 1) transaction processing systems (TPS: systems that record a transaction, some form of business-related exchange, such as a cash register sale, ATM withdrawal, or product return) and loyalty cards (systems that provide rewards and usage incentives, typically in exchange for a method that provides a more detailed tracking and recording of customer activity, also are a big switching cost) 2) enterprise software - CRM (Customer Relationship Management) - ERP (Enterprise Resource Management) - SCM (Supply Chain Management) 3) surveys external sources: - weather, industry, demographic, economic, political, marketing data are available online - publicly available data can provide unique advantages if combined with proprietary firm data or an innovative modeling paradigm