Midterm 1 - Book, ICA, PP

What is a system of information - What five components make up the system? Examples.

1. HARDWARE- 2. SOFTWARE- 3. DATA- 4. NETWORKS- 5. PEOPLE- Examples-

Long tail and long enough tail

1. Selection attracts customers 2. The Internet allows large-selection inventories efficiencies that offline firms can't match. With this being said, the example in the book states that Blockbuster had a stock selection of about 3,000 DVD titles on shelves while Netflix offered over 125,000 unique DVD titles to customers!

How do winners use technology (operational effectiveness, fast follower problem, strategic positioning)?

1. Winners focus on operational effectiveness: performing the same tasks better than rivals perform them. 2. Winners anticipate the 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. 3. Winners invest in techniques to improve quality, lower cost, and design efficient customer experiences 4. Winners focus on strategic positioning: performing different activities from those of rivals, or the same activities in a different way. In other words, technology can play a critical role in creating and strengthening strategic differences

The evolution of MIS throughout the 1970s, 1980s, 1990s, 2000s, and today. Key points of this history

1970's: Huge computers, assisted in workplaces and offices in calculation tasks such as accounting and payroll. 1980's: The rise of PC's and networking, office and home integration as people slowly began having home computers with networking options. 1990's: User friendly software, introduction of the World Wide Web, computers were everywhere! Today: The rise of the mobile phone/smartphone era, cloud storage, social media, security concerns.

Collaborative filtering, Cinematch

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

Is Moore's Law Dead? Why or why not? What can blast through the Moore's Law wall?

As chips get smaller and smaller, we are beginning to realize how Moore's Law cannot hold true forever. Eventually we will hit the limit of exactly how small a chip can be, as we could see quantum tunneling could kick in and cause the electrons to get off their track, but for now scientist continue to amaze us with the new manufacturing techniques that allow us to keep up with the advancements and hold Moore's Law to be true. We are also biting our time with new inventions for processing chips, such as the multicore microprocessor, which runs multiple smaller core processors to prevent overheating and enable steady processing speeds. By splitting up tasks, the newer multicore microprocessor enable quick and effortless processing. Most PC's and gaming consoles today run off dual core processors today.

Netflix and the big customer base

Because Netflix was not straddling in any other markets, they were able to have an operation that would cost $300 million to replicate, but since Netflix solely focused on DVD-by-mail, they were able to have greater economies of scale. The example in the book talks about how both Netflix and Blockbuster both have a $300 million dollar operation, but compares the bigger customer base of Netflix at 23 million subscribers to Blockbusters 1.3 million subscribers, therefore giving Netflix the better pricing options with their greater economies to scale.

The Netflix case study - overall why study Netflix

Because it shows us just how much technology can make or break a company and keeping up with other similar rivals is hard to do if you don't get with the current times. Also we will get to learn about and have real world examples of the struggle and triumphs of the firm. We get to look closer at issues facing companies such as digital goods, licensing, content creation, international growth, supplier power, crowdsourcing, platform competition, legal and regulatory issues and technological infrastructure.

Scale:

BlueNile online ring store -When you do something so often, and do it so well that you figure out ways to do it better and cheaper than anyone else. -Technology often lowers economies of scale and is said to be scalable.

Brand and Netflix

Brand isn't equal to advertisement, brands were built through customer experience and that's where Netflix got its brand, via multiple outlets that had it ranked in the top for ACSI as well as Nielsen rankings. ForeSee ranked it number one in e-commerce site above Apple and Amazon! Early market entry and effective execution were what distinguished it from its other also well known competitors such as Walmart and Blockbuster.

The resources for competitive advantage (brand, scale, switching costs, differentiation, network effects, distribution channels) - examples of a real-world company

Brand: The symbolic embodiment of all the information connected with a product or service. Scale: Advantage: Advantages related to a firm's size/growing in size. Economies of: When costs can be spread across increasing units of productions or in serving a growing customer base. Switching Costs: The cost consumer incurs when moving from one product to another. It can involve actual money spend as well as investments in time, any data loss and so forth. Differentiation: Many firms leverage technology to differentiate their goods and services that are pretty much the same. 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. Distribution Channels: The path through which products or services get to consumers.

Brand:

Coke, Google, Patagonia, etc. -Having a strong brand lowers costs associated with finding products -Provides quality and inspires trust -Technology can play a major role in strengthening/de-strengthening a brand Example: Viral marketing: leveraging consumers can often be enlisted to promote a product or service

Competitive advantage

Competitive advantage is the leverage that a business has over its competitors. This can be gained by offering clients better and greater value. Advertising products or services with lower prices or higher quality interests consumers. Target markets recognize these unique products or services. This is the reason behind brand loyalty, or why customers prefer one particular product or service over another.

E-waste and why it is important

E-waste is waste contributed to the environment by all the tech gadgets we've come to acquire, use and discard. It is important because of the devastating effects it is having on the countries that help us with our recycling of our used electronics. These electronics, when broken down to get the important/recyclable parts can release chemicals into the environment that then harms the countries that pay to gather these goods for re-purpose. It is important we find a way to counteract and reduce the amount of toxic chemicals introduced into the environment, as e-waste is the fastest growing waste stream on the planet. Many managers must find reputable recycling centers for these gadgets as there is increasing pressure put on the company by consumers and environmentalists alike.

Moore's Law - main idea, examples

Every 18 months there is an upgrade in technology. Where technology either becomes faster or stronger which then causes current technology to decrease in price. Better, faster, stronger, cheaper. Example: You buy a new Android phone, but soon you find out there is a newer faster edition to be released soon. You buy a car, but then the next model car has hi-tech Bluetooth technology included.

Sustainable competitive advantage:

Financial performance that consistently outperforms industry advantages.

What does data analysis do for Netflix

Helps them be successful. It leverages the data and enables a vast selection tailored to specific accounts. It gave them their competitive advantage which helped deliver the firms triple scale advantage of the largest selection, the largest network of distribution centers, and the largest customer base.

Switching Costs:

It is critical for challengers to realize that in order to win customers away from a rival, a new entrant must not only demonstrate to consumers that an offering provides more value than the incumbent, they have to ensure that their value added exceeds the incumbent's value PLUS any perceived customer switching costs. -Learning costs: Switching technologies may require an investment in learning new interface and commands. -Information and data: Users may have to reenter data, convert files or databases, or even lose earlier contributions on incompatible systems. -Financial commitment: Can include investments in new equipment, the cost to acquire any new software, consulting, or expertise, and the devaluation of any investment in prior technologies no longer used. -Contractual commitments: Breaking contracts can lead to compensatory damages and harm an organization's reputation as a reliable partner. -Search costs: Finding and evaluating a new alternative costs time and money. -Loyalty programs: Switching can cause customers to lose out on program benefits. Think frequent purchaser program that offer "miles" or "points" (all enabled and driven by software).

What is MIS?

Management Information Systems

Netflix and Scale

Netflix gained great scale thanks to its distribution center. Even though Walmart and Blockbuster were well known and had an established brand, the distribution centers for Netflix is what made it stand out above the crowd, making fast and reliable transactions everyday via mail to 97% of the US population by its highly automated nationwide network of 58 distribution centers.

Network Effects

Network Effects: a product or service becomes more valuable as more people use it. Facebook with no one? Instagram with no one? Tweeting to no one? That's no fun

Distribution Channels

PowerPoint example: 120Technology opens up new opportunities for business owners to reach customers Example: Book Sellers on Amazon; eBay

Differentiation

PowerPoint examples: Amazon - uses DATA to differentiate itself - browsing records, purchase patterns, and product ratings to present a custom home page featuring products that the firm hopes the visitor will like. Netflix: Uses previous movies and your ratings to suggest movies for you; HBO Go does not.

Main idea of RBV, four components of RBV, examples of components.

RVB-Research-based views, and in terms of competitive advantages an item must have control over four exploitable resources. The resource-based view (RBV) of competitive advantage: if a firm is to maintain sustainable competitive advantage, it must control a set of exploitable resources that have ALL four critical characteristic: 1. Valuable (without value no one cares what you've got) 2. Rare (without rareness you don't have anything unique) 3. Imperfectly imitable (if others can replicate what you've got it can be easily replaced with a substituted) 4. Non-substitutable ( goes with the above, if they can replicate, then they will substitute)

What is supercomputing and how can companies use supercomputers?

Supercomputers: Computers that are among the fastest of any in the world at the time of their introduction. Companies can use supercomputers to perform tasks such as simulations, calculations, analyzing and much more. Governments and high-end research labs used to be the only ones to use these machines, but now everyday businesses are benefiting as well. Many businesses being saved millions of dollars by these super computers calculations. Another way companies are using a similar supercomputer without the high cost of purchasing one for themselves is by grid computing which harnesses the power of PC's that are idle and gets them to work on tasks during that time.

The FreshDirect case (see questions in the PPT) 1. What is FreshDirect? 2. What NYC-based problems did FreshDirect focus on? What was FreshDirect's solution to those problems? 3. List and discuss briefly several reasons for FreshDirect's competitive advantage. 4. Does FreshDirect have a sustainable competitive advantage? 5. Discuss how technology plays a role in FreshDirect's business model. 6. Why can't traditional grocers fully copy the FreshDirect model? 7. Do you think a similar business would work in Bellingham? Seattle? Why or why not?

The FreshDirect case (see questions in the PPT) 1. FreshDirect is an online grocery store based in New York City that is redefining what it means to go grocery shopping. It is taking on two of New York's more pressing issues in this market which is high cost and limited selection of goods. It has made a break through in farm to table dynamic, as it has made an ultra efficient model that users use to pick and purchase their foods and goods. Ultimately saving consumers time and cutting costs in their labor force at the warehouses with next day delivery! 2. Their main focus was on limited selection of traditional grocers as well as the high prices. The solutions to these problems was to try to cut down inventory waste and increase productivity among the warehouse by ensuring the freshest foods available really making an emphasis on farm to table. By purchasing for suppliers themselves they avoid the middleman and cut costs. By prepping only what is ordered they cut on working costs. By efficiently working with the workers they cut down on labor costs as well! 3. Between this cutting edge model they've introduced to the market, and their innovative methods of running their store, these reasons alone help differentiate FreshDirect from your neighborhood grocery store. -Saving consumers time, not having to go to the store with the delivery services. -Convenient with their algorithm that allows for you to know what you've recently purchased also allows for time saving. -Cuts costs, with highly efficient ways they go about their production and distribution, traditional grocers are having a hard time trying to keep up with the inventory turnovers. -It hits all the RBV components easily! 4. Yes, I would say at this moment in time that they do hold a sustainable competitive advantage against their competition. 5. Without technology there would be no FreshDirect. For this company technology plays a huge role in the success of this company and how it thrives in places such a New York City. Quicker automation/sorting/organizing, sweet algorithms is how FreshDirect sees success in their everyday operations. 6. Traditional grocers can't fully copy FreshDirect's model as they would eventually encounter straddling as an issue and that would cause them to struggle into the realm of online shopping, as their traditional methods of daily operations would interfere with their regular operations of the store itself. 7. I could see where this could work in a densely populated and growing city such as Seattle, were parking is becoming more and more scarce and prices are also increasing at a staggering rate. I could also see how this may work in Bellingham as well, as the farm-to-fork and organic movement is prevalent in the PNW.

The data advantage; The data asset with examples

The ability to not only help them but also help others such as the studios of movies, by cutting a deal with them they were able to help rejuvenate profits for a movie via their revenue sharing systems. Netflix churn rates fell when Walmart and Blockbuster released copycat services, which is why data collection via Cinematch has been so vital to Netflix.

Atoms to bits and other examples besides Netflix

This blurp talked about how other venues are attempting to embrace the atoms to bits phase. You no longer have to physically go to the store to buy a book or read the newspaper, you can access all that information and more on any tablet or mobile phone. It discussed how impacted for example GameStop was, as it had to close down almost 700 stores in 4 years to cope with the struggling game purchases.

The importance of data and Netflix

Without data, Netflix probably wouldn't have been so successful, since some of the key feature of Netflix was its ability to personalize recommendations for each user. Considering the fact that over 60% of the content that Netflix users placed on their DVD request queues were composed of recommended titles paints a picture of just how important this software is for Netflix.

Are Droids taking our jobs? Why/why not? (TED Talk)

Yes and no- Online shopping becomes more prevalent, self-driving cars, automated vacuums, etc. At the same time though, we need people to service the machines, to process online orders, etc.