MIS Quiz (ch. 8 & 9)

24. Amazon spent _______ billion on shipping costs in 2020.

$61.1 billion

Which of the following is an example of agency pricing? - The government of a country sets the minimum price for certain agricultural products to cover the costs incurred by the farmers - The local government sets the maximum price for a certain product that retailers cannot exceed - A department store gets a cut on the selling price of a product, which is set by the product's manufacturer - A manufacturer and a retailer work in a collaborative manner to decide the price of the final product - a retail store purchases merchandise from a manufacturer and sells the merchandise at whatever prices it wishes to charge

- A department store gets a cut on the selling price of a product, which is set by the product's manufacturer

Risks of using AWS:

- AWS can have power outages - Mistypes commands can cause problems - Data can be vulnerable

2. Which of the following is true of Amazon? - Amazon has limited its product categories to only books. - Amazon took over seven years to turn a profit. - Amazon has centered its focus on quarterly results. - Amazon initially adopted the domain of a non-profit organization. - Amazon's profitability has remained constant over the years and analysts continue to predict profits in the firm's future.

- Amazon took over seven years to turn a profit.

Which strategy was followed by Amazon's founder? - He built e-commerce operations only for Amazon's customers in the United States - He focused more on Amazon's yearly results - He reduced warehousing capacity - He consciously ignored cloud computing platforms - He postpones profit harvesting

- He postpones profit harvesting

What are strategies for competing in markets with network effects?

- Move early - Subsidize product adoption (Ex: freemiums) - Leverage viral promotion - Expand by redefining the market to bring in new categories of users (Ex: blue ocean strategy with Wii) - Form alliances and partnerships (maybe to take out a leader). - Establish distribution channels (Ex: Microsoft bundling Media Player with Windows). - Seed the market with complements (Selling PS3 with Blu-ray). - Encourage the development of complementary goods—this can include offering resources, subsidies, reduced fees, market research, development kits, and training (Oculus and Amazon Echo investing in research and development). - Maintain backward compatibility (Apple's Mac OS X Rosetta translation software for PowerPC to Intel). - For rivals, be compatible with larger networks - For incumbents, constantly innovate to create a moving target and block rival efforts to access your network (Apple's efforts to block access to its own systems). - For large firms with well-known followers, make preannouncements (Microsoft, Apple to control the consumers from buying other products).

Identify each statement ass true or false concerning reasons that a retailer would consider selling through Amazon using Amazon fulfillment services. - Net customers acquired through Amazon wouldn't have to create additional account information if they already had an Amazon account - Products can be searched for and discovered on the Amazon website - Amazon will warehouse products - Products will be available for free Prime shipping

- True - True - True - True

Identify each statement as true or false concerning why Amazon allows third-party firms to offer products through its site: - Amazon earns revenue from the sale and fulfillment of third-party products - It allows Amazon to maintain the customer relationship and acquire data, even if it sells products from others - It increases the firm's accounts receivable period - It reinforces the appeal of Amazon as a first-choice shopping destination

- True - True - False - True

31. The Amazon Go retail features stores: - scanning app store entry. - without cashiers. - artificial intelligence to assist with completing purchases. - all of the above. - without registers.

- all of the above.

21. Amazon does not _____. - offer web-based services - allow third-party sellers to use its website - own the inventory of items sold through the "Fulfilled by Amazon" program - keep project teams small enough to be fed by "two pizzas" - focus on long-term goals

- own the inventory of items sold through the "Fulfilled by Amazon" program

13. Amazon reports a negative cash conversion cycle, which means it: - defers profits in order to invest in long-term opportunities. - sells goods before it has to pay its suppliers. - focuses on advancing profit harvesting. - does not allow third-party sellers to use its website. - sells goods after it pays the suppliers.

- sells goods before it has to pay its suppliers.

What are the 3 things that add value to platforms?

1. Exchange 2. Staying Power 3. Complementary Benefits

Amazon's controls _____ of the world's cloud computing market

1/3

AWS accounts for ________ percent of Amazon's operating income.

30 percent

28. The Purdue - Amazon bookstore partnership has lowered text book cost by _______ percent.

40 percent

Cookie

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

Oligopoly

A market dominated by a small number of powerful sellers.

One-sided market

A market that derives most of its value from a single class of users (e.g., instant messaging).

Monopoly

A market where there are many buyers but only one dominant seller.

Two-sided markets

A network market that has 2 distinct categories of participant... both of which are needed to deliver value for the network to operate. One will INC when the other INC Ex: Video game console owners and developers of video games

Adaptor

A product that allows a firm to tap into the complementary products, data, or user base of another product or service. a device that allows you to use another product Ex: HDMI cable (hardware), API (software adapter)

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.

Data warehouse

A set of databases designed to support decision-making in an organization.

Instance

A software-based copy using a pre-defined model of the object being created. For example, an instance of a Windows computer creates a virtual software representation that works and acts exactly like the computer hardware and software it is modeled after.

Virtual Machine

A software-based representation of a physical computer.

Deep learning

A type of machine learning that uses multiple laters of interconnections among data to identify patterns and improve predicted results... often uses neural networds and applied to tasks like speech recognition, imagine recognition, and computer vision

Collaborative filtering

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

Technology Stack

All of the technology products and services used to build and run one single information technology solution.

What is the world's most valuable retailer?

Amazon

What is the ASIN database entry?

Amazon's inventory system

Goodwill

An accounting term for an intangible asset above and beyond the operations value of the firm. Ex: 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.

Blue ocean strategy

An approach where firms seek to create and compete in uncontested "blue ocean" market spaces, rather than competing in spaces and ways that have attracted many similar rivals.

1. Who will take over as Amazon's new CEO?

Andy Jassy

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).

hybrid clouds

Cloud computing architectures that combine on-premises infrastructure with public cloud services... allows firms to shift capacity to the cloud when extra resourced are needed

Serverless

Cloud computing that allows a software developer to create and run their code without worrying about servers, databases, or anything their cloud vendor does in the background

Technological leapfrogging

Competing by offering a new technology that is so superior to existing offerings that the value overcomes the total value of exchange, switching cost, and complementary benefits of the existing firm.

What does Amazon having "bigger lungs" mean in a price war?

Competition often involves firms trying to sell at the lowest prices, and Amazon having "bigger lungs" means they can endure the challenge of an unprofitable price war longer than smaller firms.

Latency

Delay in networking and data transfer speeds. Low-latency systems are faster systems.

Thin device

Devices w/ little computing power... instead, they perform the bulk of computing and storage over the network (the cloud) -Ex: smart speakers and TV streaming sticks

DMCA

Digital Millennium Copyright Act — U.S. law protecting copyrighted works from unauthorized digital distribution

Channel Conflict

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

10. The use of Kiva robots has allowed Amazon to radically reduce headcount, saving the firm additional money by cutting its workforce. True or False

False

16. While Amazon is the largest online retailer, the firm has struggled with customer satisfaction, largely because processes are automated and the firm offers little phone support or human assistance. The firm allows this tradeoff because it helps cut costs. True or False

False

3. Bezos is regarded as such a successful CEO in part based on his relentless focus on his firm's quarterly performance. True or False?

False

4. Amazon's attempt at creating a smartphone competitor to iOS and Android, the Fire Phone, was a great success. True or False?

False

6. During the first ten months of 2020, Amazon had to let go of over 427,000 employees. True or False?

False

8. Computers help make sure shelvers stack similar items next to each other. The goal? Make sure that if an order picker seeks something like Legos, they'll find all of the firm's offerings in one spot. True or False?

False

29. Amazon has gotten physical without a full-fledged investment in storefronts. The firm has 300 Amazon popup stores, temporary kiosk-style spots in malls or other heavy-traffic retail spaces. True or False?

False, only 30 popup stores

25. Longtime Amazon shipping partner _______ dropped the firm in 2019 for both air and ground deliveries.

FedEx

IRL

In Real Life—online acronym for interactions outside of pre-produced videos, podcasts, etc.

Operating income

Income you generate through your operations. Sales through daily business operations minus related expenses.

What are Amazon's 3 Pillars of business?

Large Selection, Customer Experience or Convenience, and Low Prices

Affiliate marketing program

Marketing practice where a firm rewards partners (affiliates) who bring in new business and giving them a cut of resulting sales

2. _____ has allowed Amazon to radically drop the price of Kindle offerings, while increasing device functionality.

Moore's Law

Flash Sales

Offering discounts of a limited quantity of inventory for a fixed period or until inventory is completely depleted.

Dynamic Pricing

Pricing that shifts over time, usually based on changing demand Ex: charging more for scarce items

platforms

Products and services that allow for the integration of software products and other complementary goods, effectively creating an ecosystem of value-added offerings. Ex: Windows, iOS, the Kindle, and the standards that allow users to create Facebook apps are all platforms. Ex: iMessage is a platform that allows developers to build apps to share cash via a text

Complementary benefits

Products or services that add additional value to the primary product or service that makes up a network.

Two-sided network effect

Products or services that get more valuable as two distinct categories of participants expand (e.g., buyers and sellers).

APIs

Programming hooks that allow firms to use the services of other firms Ex: Amazon provides APIs to let developers write their own apps and websites that can send their firm orders Ex: Uber adding its services to TripAdvisor websites

Bursting

Shifting capacity to a cloud provider during periods of high demand.

SQL

Structured Query Language -- the industry-standard language used to create and manipulate databases.

Backward compatibility

The ability to take advantage of complementary products developed for a prior generation of technology.

Customer acquisition costs

The amount of money a firm spends to convince a customer to buy a product or service.

Daily Active Users (DAU)

The average number of unique visitors who use a product or service.

Switching cost

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.

Fulfillment Costs

The costs for shipping, receiving, and packaging the product.

Digital Divide

The difference in access to technologies among wealthy and poor communities. Poor communities with less access often face less opportunity for everything from home schooling to easy access to online public resources.

Staying power

The long-term viability of a product or service.

Inventory turns

The number of times inventory is sold or used during a specific period (such as a year or quarter). A higher figure means a firm is selling products quickly.

social proof

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

14. Selling more goods often gives Amazon bargaining power with suppliers. True or False?

True

22. Website operators can recommend Amazon products on their site, and Amazon gives the affiliate a percentage of sales generated from these promotions. True or False?

True

33. Customers who purchase Kindle products buy significantly more products from Amazon than those who do not own a Kindle. True or False?

True

Liquidity Problems

When a company has problems converting assets (inventory) to cash

White Label

When a company produces a product/service, and thenanother company sells it under their name

The Osborne Effect

When a firm preannounces a product or service and experiences a detrimental drop in sales of current offerings as users will wait for the new item.

Cross-sided exchange benefits

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).

Fork

When developers start with a copy of a project's program source code, but modify it, creating a distinct and separate product from the original base. Ex: Fire OS is a fork of the Android operating system

Congestion Effects

When increasing numbers of users lower the value of a product or service.

Envelopment

When one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering. Ex: Apple conquering camera market by integrating cameras into its phones

Network effects

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

Convergence

When two or more markets, once considered distinctly separate, begin to offer features and capabilities. Ex: The markets for mobile phones and media players have converged (and smartphones won).

Freemium

a product with a free version (sometimes w/ limited features or working time)

9. Which of the following is a benefit derived from Amazon's use of Kiva robots in its fulfillment centers? - All of the above are correct. - reduces unload time for inbound inventory - cuts average order fulfillment time - allows warehouses to store more product - dropped fulfillment costs

all of the above are correct

Retargeting

displays ads to a web user based on sites they have previously visited

30. About 70 percent of the cost of Whole Foods was categorized in Amazon financials as _________.

goodwill

12. In order to achieve a negative cash conversion cycle a firm would want to:

increase its account payable period and its inventory turns.

27. The final stage of getting a product to the consumer, typically by small delivery van or other vehicle, is known as _____________.

last-mile delivery

What is a synonym for switching costs?

lock-in

What are SLAM machines?

machines that blow address shipping labels onto packages with air puffs

Account Payable

money owed for products and services purchased on credit

Which product of service is not subject to network effects? - cell phone services - social media - stock exchanges - snack chip manufacturing - video game consoles

snack chip manufacturing

Total cost of ownership

the full, economic cost of owning a product (hardware, software, training, maintenance, etc.)

Cash Conversion Cycle

the period between inventory sitting in the warehouse and getting sold for cash Amazon has negative CCC b/c it sells goods and collects money from customers weeks before it has to pay its suppliers

The Long Tile

the products that aren't popular enough for stores to carry, but demand still exists

Agency Pricing

when publisher sets the price and the reseller gets a cut

What does exchange mean?

when the firm offers services to the consumers, and the consumers offer their ability to attract other people. This exchange creates value

Wholesale Pricing

when you pay publishers for products and then selling products at whatever price you want... buying in bulk, selling in bulk