BMGT301 Exam 2

What are the other names for this concept?

"Metcalfe's Law" or "network externalities."

What is the Netflix prize?

$1 million to the first team that could improve Cinematch scores by 10 percent. The winning team consisted of engineers that entered the competition on separate teams. An example of crowdsourcing: firm states a problem it would like solved, the reward it will provide, and then makes this available to a broader community in the form of an open call.

What are the three types of Data Analytics

1.Descriptive Analytics: such as Dashboard, scorecards and alerts; they tell you summarize events of the past and tell what happened but not why it happened and what might change 2.Predictive Analytics: more useful; they use past data to model future outcomes; example predicting how customers will respond to a promotion event or advertising campaign 3.Prescriptive Analytics: chooses techniques such as optimization to help employees and managers do a better job; they might tell a portfolio manager the optimal allocation among competing investments (stocks) for the purpose of maximizing ROI or minimize risk

What do you believe are the most significant long-term threats to Netflix

1.firms that have thriving businesses in other areas: will come to market with cash that allows them to suffer short term losses as they try to become the leader. 2. Bandwidth caps: a ceiling on a customer's total monthly consumption imposed by cable or telephone company (may have to pay penalty for being a Netflix customer) 3. International expansion: increased licensing costs and disparate legal requirements. 4. network traffic due to streaming 5. Exclusivity: some networks refuse to put their content on Netflix and offer it exclusively on their website

Hierarchy of Data

A computer system organizes data in a hierarchy that starts with the bit, which represents either a 0 or a 1. Bits can be grouped to form a byte to represent one character, number or symbol. Bytes can be grouped to form a field and related fields can be grouped to form a record. Related records can be collected to form a file, and related files can be organized into a database. 1. Bit - grouped to form a byte 2. Bytes - grouped to form a field 3. Field - field to form a record 4. Records - record to form a file 5. File -file into a database 6. Database

PIVOTCHART

A pivot chart is the visual representation of a pivot table in Excel.

PIVOTTABLE

A pivot table allows you to extract the significance from a large, detailed data set.

What's a wiki? Why is Wikipedia of increasing importance to firms?

A website anyone can edit directly within a Web browser All the pages in a wiki are searchable and can be used for any collaborative effort for a firm

Are you concerned about data security?

By knowing gender, birth date, and postal zip code, 87 percent of people in the United States could be pinpointed by name Publicly available data on state and date of birth could be used to predict U.S. Social Security numbers—a potential gateway to identity theft

How might firms leverage this data to better serve you and improve their performance?

CRM: customer relationship management systems empower employees to track and record data at nearly every point of customer contact Surveys: feedback to drive initiatives from reducing packaging size to including star ratings on produce

NPV

Calculates the Net Present Value of an investment, based on a supplied discount rate, and a series of future payments and income =NPV( rate, value1, [value2], [value3], ... ) EX.=NPV(A1,A2:A7) rate:The discount rate over one period. value1, [value2], ..: Numeric values, representing a series of regular payments and income, where: Negative values are treated as payments; Positive values are treated as income.

PMT

Calculates the periodic payment for a loan with a fixed interest rate and fixed term =PMT(rate,nper,pv,[fv],[type]) EX.=PMT( 5%/12, 60, 50000 ) Monthly payments on a loan of $50,000 that is to be paid off in full over 5 years (12monthsx5=60), with an interest rate of 5% per year (payment made at end of each month) rate: the periodic interest rate, such as a monthly interest rate nper:the total number of payment periods pv: the present value of the loan

SLN

Calculates the straight line depreciation of an asset for one period. =SLN(cost, salvage, life) EX.=SLN( 500, 100, 8 ) Initial cost = $500; salvage = $100; lifetime = 8 yrs Cost: Required. The initial cost of the asset. Salvage: Required. The value at the end of the depreciation (sometimes called the salvage value of the asset). Life: Required. The number of periods over which the asset is depreciated (sometimes called the useful life of the asset).

SUM

Calculates total of values contained in two or more cells and displays the result in the cell containing the function. =SUM(number 1, [number 2], . . .) EX.=SUM(A2,A3) is A2+A3 EX.=SUM(A2:A4,15) is A2+A3+A4+15

What is Netflix churn rate & what are the reasons behind this rate?

Churn rate: rate at which customers leave a product. Fell even after Blockbuster and Walmart launched their similar service. Reason: switching costs (abandon all the films they've previously rated)

What 'class' of software does Netflix use to make video recommendations?

Cinematch: Data is collected when customers rate movies they've seen and this data on customer likes and dislikes is fed into a proprietary Netflix recommendation system called Cinematch. Collaborative filtering: monitor trends among customers and use this data to personalize an individual customer's experience.

Is data a source of competitive advantage?

Combining Big Data and Effective Analytics gives the company a key competitive advantage. Analytics: the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions Follow the DELTA Model: • D = Data that is unique • E = Enterprise-wide focus where data analytics available to everyone • L = Leaders at all levels to promote • T = Targets identifying business areas • A = Analysts to execute

What is meant by "data governance"?

Data governance:What rules and processes are needed to manage data from its creation through its retirement? Are there operational issues (backup, disaster recovery)? Legal issues? Privacy issues? How should the firm handle security and access?

What is the difference between a data mart and a data warehouse?

Data mart: 1.Subset of data warehouse 2. Summarized or highly focused portion of firm's data for use by specific population of users 3.Typically focuses on single subject or line of business Data warehouse: 1.Stores current and historical data from many core operational transaction systems 2.Consolidates and standardizes information for use across enterprise, but data cannot be altered 3.Data warehouse system will provide query, analysis, and reporting tools

What is meant by "data relevance"?

Data relevance:What data is needed to compete on analytics and to meet our current and future goals?

Define A DBMS

Database management systems: software for creating, maintaining, and manipulating data. Help create, read, update, delete (CRUD)

LOGICAL FUNCTION:IF

Evaluates a condition and returns one value if the condition is true and a different value if the condition is false. =IF(logical_test,value_if_true,value_if_false) EX. =IF(A1>10,"Correct","Incorrect") logical_test is an expression that evaluates to TRUE or FALSE value_if_true is the resulting value if the condition is true value_if_false is the resulting value if the condition is false

Are advantages based on analytics and modeling potentially sustainable? Why or why not?

If more data brings more accurate modeling, then moving early to capture this rare asset can make a firm the dominating firm However, advantages based on capabilities and data that others can also acquire will be short-lived Differentiation is key in distinguishing operationally effective data use from those efforts that can yield true strategic positioning

What are the sources of the network effects?

Exchange: a network becomes more valuable because its users can potentially communicate with more people Staying Power: Users don't want to buy a product or sign up for a service that's likely to go away. Networks with greater numbers of users suggest a stronger staying power (relate to switching costs) Complementary Benefits: products or services that add additional value to the network. These products might include "how-to" books, software, and feature add-ons

What is Hadoop? Why would a firm use Hadoop instead of conventional data warehousing and data mart technologies?

Hadoop: created to analyze massive amounts of raw information better than traditional, highly structured databases. Advantages: Flexibility:Hadoop can absorb any type of data, structured or not, from any type of source Scalability: Hadoop systems can start on a single PC, but thousands of machines can eventually be combined to work together for storage and analysis. Cost effectiveness: Since the system is open source and can be started with low-end hardware, the technology is cheap by data-warehousing standards. Many vendors also offer Hadoop as a cloud service, allowing firms to avoid hardware costs altogether. Fault tolerance: Hadoop is designed in such a way so that there will be no single point of failure. The system will continue to work, relying on the remaining hardware.

How are organizations effectively leveraging social networks?

Hundreds of firms have established pages on major social networks, and these are now legitimate customer- and client-engagement platforms. Social networks are a hothouse for "earned" media, where enthusiast-consumers can help spread the word about products and services. Much of the activity that takes place on social networks, spread via feed. Firms have also created their own online communities to foster brainstorming and customer engagement

What is Web 2.0?

Internet services that foster collaboration and information sharing; characteristics that distinctly set Web 2.0 efforts apart from the static, transaction oriented websites of Web 1.0. Foster social media and other sorts of peer production.

What are Netflix sources of competitive advantage? What are the benefits of these advantages?

MAIN: Distribution centers, selection, customers Timing and Technology: Netflix was able to create critical and mutually reinforcing resources—brand, scale, and a data asset—that rivals simply could not match. Offer better pricing because more customers. Competitors Blockbuster and Walmart not known as a DVD-by-mail service (had to create their own awareness). Offer customers 125,000 unique DVD titles (competitors offer 3000 on their shelves).

Why are data marts and data warehouses necessary?

Marts and warehouses may contain huge volumes of data. For example, a firm may not need to keep large amounts of historical point-of-sale or transaction data in its operational systems, but it might want past data in its data mart so that managers can hunt for patterns and trends that occur over time.

Which firm do you suspect has stronger end-user network effects: Google's online search tool or Microsoft's Windows operating system? Why?

Microsoft's Windows operating system. Google doesn't offer complementary products, low switching costs, low exchange.

Network effects are often associated with technology, but tech isn't a prerequisite for the existence of network effects. Name a product or service that is not related to information technology but still dominates due to network effects

Money- currency is useless if no one else uses it

How does the Netflix business model work?

Netflix operates via a DVD subscription and video-streaming model. Users make video choices in their request queue, rate videos, get recommendations, read movie details. Hastings (CEO) made the transition from mailed DVD's to streamed video where mailed DVD's is an add on. Streaming available on multiple devices

Does Netflix have a strong brand? How is a strong brand created?

Only name synonymous with DVD by mail service. Ranked the best in customer experience (operated 58 distribution centers to get DVDs to customers overnight)

What are peer production and social media? Give examples of each.

Peer production: When users collaboratively work to create content, products, and services. Includes social media, open source software and peer produced services ex. Skype, BitTorrent (leverage users' computers instead of a central IT resource to forward phone calls and video) Social Media: technologies that support the creation of user-generated content, as well as content editing, commenting, curation, and sharing ex. blogs, wikis, social networks, messaging services, Twitter, and photo and video sharing sites.

IRR

Returns the Internal Rate of Return for a supplied series of periodic cash flows (ie. a set of values, which includes an initial investment value and a series of net income values). =IRR( values, [guess] ) EX.=IRR(B1:B6) values: A reference to a range of cells containing the series of cash flows (investment and net income values) (must contain at least one negative and at least one positive value) [guess]: An initial guess at what you think the IRR might be. This is an optional argument, which, if omitted, takes on the default value of 0.1 (=10%) (Note: This is only a value for Excel to start off working with - Excel then uses an iterative procedure to converge to the IRR)

CONDITIONAL FUNCTION: AVERAGEIFS

Returns the average (arithmetic mean) of all cells that meet multiple criteria. =AVERAGEIFS(average_range, criteria_range1, criteria1, [criteria_range2, criteria2], ...) EX.=AVERAGEIFS(B2:B7, C2:C7, "Bellevue", D2:D7, ">2",E2:E7, "Yes") Average price of a home in Bellevue that has at least 3 bedrooms(>2) and a garage(YES)

CONDITIONAL FUNCTION: AVERAGEIF

Returns the average (arithmetic mean) of all the cells in a range that meet a given criteria. =AVERAGEIF(range, criteria,[average_range]) EX.=AVERAGEIF(B2:B5,"<23000") Average of all commissions less than 23000

What is a blog? How are organizations leveraging blogs?

Short for "Web log"—an online publication that keeps a running chronology of entries. Readers can comment on posts. Can connect to other blogs through blog rolls or trackbacks Corporations that blog can enjoy immediate and unfiltered distribution of their ideas, with no limits on page size, word count, or publication deadline. And they can gather immediate feedback from readers via comments. Corporate blogs can be published directly to the public, skipping what bloggers call the mainstream media (MSM) and presenting their words without a journalist filtering their comments or an editor cutting out key points they'd hoped to make.

Why would a firm use a loyalty card? What is the incentive for the firm? What is the incentive for consumers to opt in and use loyalty cards? What kinds of strategic assets can these systems create?

TPS (transaction processing system) cant always match data to a specific customer (what if they use cash?) Loyalty card: systems that provide rewards and usage incentives to consumers in exchange for a more detailed tracking and recording of their activity Consumers may get instant discounts or building of points Firm increases their switching cost

What kind of products or services are subject to network effects?

Technology firms (you probably don't care if someone wears the same socks as you) Microsoft, Apple, NASDAQ, eBay, Facebook, and Visa.

LOGICAL FUNCTION: AND

The AND Function returns TRUE if all conditions are true and returns FALSE if any of the conditions are false. EX. =IF(AND(A1>10,B1>5),"correct","incorrect")

INDEX MATCH

The MATCH function determines the relative position of the lookup value in the specified range of cells. From there, the INDEX function takes that number, or numbers, and returns a value in the corresponding cell. =INDEX (column to return a value from, (MATCH (lookup value, column to lookup against, 0) EX.=INDEX($D$2:$D$10,MATCH("Japan",$B$2:$B$10,0)) The MATCH function searches for the lookup value "Japan" in column B, more precisely cells B2:B10, and returns the number 3, because "Japan" is the third in the list. The INDEX functions takes "3" in the second parameter (row_num), which indicates which row you want to return a value from, and turns into a simple =INDEX($D$2:$D$10,3). Translated into plain English, the formula reads: search in cells D2 through D10 and return a value of the cell in the 3rd row, i.e. cell D4, because we start counting from the second row.

LOGICAL FUNCTION: OR

The OR function returns TRUE if any of the conditions are TRUE and returns FALSE if all conditions are false. EX.=IF(OR(A1>10,B1>5),"CORRECT","INCORRECT")

What is crowdsourcing? Give examples of crowdsourcing

The act of taking a job traditionally performed by a designated agent and outsourcing it to an undefined generally large group of people in the form of an open call. ex. McDonald's challenged consumers to build a burger recipe, culminating in the launch of the Pretzelnator ex. Netflix famously offered anonymous data to any takers, along with a one-million-dollar prize to the first team that could improve the accuracy of movie recommendations by 10 percent. ex.Israeli firm Waze has used crowdsourcing to build a better map

INDEX

The basic INDEX function returns a VALUE based on a defined array / column and a row number. =INDEX ( array , row number,column number) EX. =INDEX(A1:C10,2,3) The formula searches in cells A1 through C10 and returns a value of the cell in the 2nd row and the 3rd column, i.e. cell C2. *DONT ALWAYS KNOW WHICH ROW AND COLUMN YOU WANT (NEED MATCH)

MATCH

The basic MATCH function returns a NUMBER based on the relative position of a lookup value within a defined array / column. =MATCH ( lookup value , lookup array , match type ) EX.=MATCH("London",B1:B3,0) If the range B1:B3 contains the values "New-York", "Paris", "London", then the formula returns the number 3, because "London" is the third entry in the range. *0 means find first value that is exactly equal to the lookup value

What are relational databases?

The most common standard for expressing databases, whereas tables are related based on common keys (most popular database format). Represents data as two- dimensional tables called relations or files. table or file: list of data column or field: data that a table can hold row or record: single instance or whatever the table keeps track of key: field or fields used to relate tables in a database primary key: defines an entity uniquely. Only appears once on a table foreign key: Uses primary key as a look up field, appears multiple times

VLOOKUP

Use VLOOKUP when you need to find things in a table or a range by row. =VLOOKUP (lookup_value, table_array, col_index_num, [range_lookup]) EX.=VLOOKUP(102,A2:C7,2,FALSE) Searches for an exact match of the last name for lookup_value102 in column A. Fontana is returned. *2 is the column number (starting with 1 for the left-most column of table-array) that contains the return value. *FALSE says you want an exact match *TRUE will search for the closest value

How are firms negatively impacted by the use of Twitter and other social media?

Users are increasingly using the service as a way to form flash protest crowds.

What are the capabilities of DBMS?

Vary widely in scale and capabilities. Databases can be focused on any combination of functional areas (sales, product returns, inventory, payroll), geographical regions, or business units Data dictionary: automated or manual file storing definitions of elements and their characteristics DML: data manipulation language: used to add, change, delete, retrieve data from database...Structured query languge(SQL)...Microsoft access uses tools for generation SQL DDL:Data definition language: specifies structure of database content, used to create tables and define characteristics of fields

When might data not yield sustainable advantage?

When the data or information is easily copied or found. Not Valuable, not Rare, easy to imitate, and many substitutes.

What are network effects?

When the value of the product or service increases as its number of users expands

How are organizations leveraging wikis and what are the benefits of this technology?

Wikis can make workers more productive and informed, and kill corporate time-wasters. At Disney's Pixar, wikis are used to improve meeting efficiency, with agendas and key materials distributed in advance. Posting corrections, comments, goals, deadlines, and completion keeps everyone involved and aware of expectations and progress. Sony uses wikis for cross-functional collaboration on projects (finance, engineering, marketing), with secure access making sure that information is released on a need-to-know basis.

SOLVER

With Solver, you can find an optimal (maximum or minimum) value for a formula in one cell — called the objective cell — subject to constraints, or limits, on the values of other formula cells on a worksheet. =SUMPRODUCT(B5:E5,B4:E4) same as =B5*B4+C5*C4+D5*D4+E5*E4

Should a firm have a social media policy?

Yes.Policy should be short, simple, and clear. Representation: Employees need clear and explicit guidelines on expectations for social media engagement Responsibility: Employees need to take responsibility for their online actions. Firms must set explicit expectations for disclosure, confidentiality and security Respect: includes the firm, its customers, and its competitors.

Define a database

a list, or several related lists, of data

What is Twitter? How are firms effectively using Twitter?

a microblogging service that allows users to post 140-character messages (tweets) via the Web, SMS, or a variety of third-party desktop and smartphone applications. Organizations have found Twitter useful for real-time promotions, for time-sensitive information, for scheduling and yield management, for customer engagement and support, for promotion, for intelligence gathering, for idea sourcing, and as a sales channel.

CONDITIONAL FUNCTION: SUMIFS

adds all of its arguments that meet multiple criteria =SUMIFS(sum_range, criteria_range1, criteria1, [criteria_range2, criteria2], ...) EX.=SUMIFS(A2:A9, B2:B9, "=A*", C2:C9, "Tom") Adds the number of products that begin with A and were sold by Tom. It uses the wildcard character * in Criteria1, "=A*" to look for matching product names in Criterial_range1 B2:B9, and looks for the name "Tom" in Criterial_range2 C2:C9. It then adds the numbers in Sum_range A2:A9 that meet both conditions. The result is 20.

What are social networks?

allow you to set up a profile, share content, comment on what others have shared, and follow the updates of particular users, groups, firms, and brands that may also be part of those networks.

CONDITIONAL FUNCTION: COUNTIFS

applies criteria to cells across multiple ranges and counts the number of times all criteria are met. =COUNTIFS(criteria_range1, criteria1, [criteria_range2, criteria2]...) EX.=COUNTIFS(B2:B5,"=Yes",C2:C5,"=Yes") Counts how many salespeople exceeded both their Q1 and Q2 quotas ("yes" in cell if they exceeded it)

How can a firm monitor its reputation online?

by creating a social media awareness and response team (SMART), establishing firmwide policies, monitoring activity inside and outside the firm, establishing the social media presence, and managing social media engagement and response.

What is Technological Leapfrogging?

competing by offering a superior generation of technology

CONDITIONAL FUNCTION: COUNTIF

count the number of cells that meet a criterion =COUNTIF(range, criteria) EX.=COUNTIF(A2:A5,"apples") Counts the number of cells with apples in cells A2 through A5.

What role do technology and timing play in realizing advantages from the data asset?

machine learning: sophisticated category of software applications known as artificial intelligence that leverage massive amounts of data so that computers can "learn" and improve the accuracy of actions and predictions on their own without additional programming

What is meant by the Apple Economy?

many prodcuts are now made to work specifically with apple products like in cars and speakers and all that. It also serves as a switching cost of leaving apple

What factors do you believe helped each of these efforts achieve dominance?

more users = more value forming partnerships, establishing distribution channels, maintaining backward compatibility, bringing in new categories of users, moving early, using complements, making preannouncements.

How can a firm leverage social media?

provides critical competitive intelligence, it can surface customer support issues, and it can uncover opportunities for innovation and improvement (embrace social media as an opportunity to learn more)

What is Big Data

term used to describe the massive amounts of data available to todays managers. Often unstructured and are too big and costly to work through the use of conventional databases

What is Data Analytics

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

What is 'the long tail'?

the large number of products unavailable through conventional retail stores (offer nearly limitless selection).

CONDITIONAL FUNCTION: SUMIF

use the SUMIF function to sum the values in a range that meet criteria that you specify =SUMIF(range, criteria, [sum_range]) EX.=SUMIF(B2:B25,">5") will sum only the values that are larger than 5 between b2 and b25

What are the V3 in Big Data

volume velocity: This deals with how fast the data is being produced and how fast the data must be processed to meet demand = Availability for access and delivery variety:This refers to the different sources providing the data including tabular data, documents, emails, videos, images, audios, blogs, chats, tweets