MIS Exam 1 Study Guide
What is cloud computing? What are the essential characteristics of cloud computing?
Cloud computing refers to replacing computing resources—of either an organization or individual's hardware or software—with services provided over the Internet. Essential Characteristics: On-demand self-service: requires little human interaction Broad network access Resource Pooling: multi-tenancy model, location independence Measured service: metrics provide transparency Rapid elasticity (scalability) : cloudbusting
Is Netflix a friend or foe to the studios? Make a list of reasons why they would "like" Netflix, and why studios might be fearful of the firm.
Shows are not limited to the strict 30- minute time limit imposed by traditional TV networks. Studios can be a little more creative. Studios fear that Netflix is gaining too much power, like a monopoly, which would make them too dependent on Netflix Disintermediation is removing an organization from a firm's distribution channel. This takes out the middleman between suppliers and consumers, so studios don't need to share revenue with 3rd parties and studios get to keep valuable data about the customers
What is SaaS? For this service model, what are the resources the cloud vendor will provide/manage? What basic question is it essentially addressing for a cloud user? Know that the cloud user will usually not manage or control the cloud infrastructure, operating systems, and even individual application capabilities, with the possible exception of limited user-specific configuration settings.
Software as a Service - The capability provided to the customer is to use the provider's applications running on a cloud infrastructure (not necessarily maintained by the provider of the application). Gmail, Netsuite (ERP), SalesForce (CRM), Aravo (SCM)
What are the strategies for competing in markets with strong network effect? Be able to list/identify examples on how to implement each of the strategies.
Strategies: move early, subsidize product adoption, form alliances, partnerships Implementation: newcomers need to leapfrog the value of the established firm's tech, exchange benefits provided by the user base/product complements
What is TCP and what are the basic functions of TCP? What is IP and what are the basic functions of IP? Understand how TCP and IP work together to enable data communications between one computer to another.
TCP- transmission control protocol, works at both ends of most Internet communication to ensure a perfect copy of a message is sent Basic function of TCP: slices up Web pages into smaller chunks of data called packets (or datagrams) and puts them back together after the package is forwarded by the IP IP: internet protocol, a routing protocol that is in charge of forwarding packets on the Internet Basic function: route packets to their final destination
What are the challenges for Netflix to move from atoms to bits?
The 0 debacle: they tried offering two different subscription services which confused and outraged customers First Sale Doctrine: Supreme Court ruling that an individual who buys copyrighted work has the right to sell it (applies to DVDs but not streaming licenses, making licenses much more expensive) Licenses are expensive, temporary, and vary greatly in costs (unpredictable)
What are switching costs? What are the sources of switching costs?
The cost a consumer incurs when moving from one product to another Actual money spent, investments in time, losses in data, etc.
What are the impacts of digital cameras on the entire imaging chain?
The digital camera made the razor-blade strategy obsolete, which was a big part of Kodak's value chain
Under what conditions can the Internet strengthen supplier bargaining power? Be able to give an example.
The internet gives suppliers more access to the firms and cuts out the middlemen, thus increasing supplier bargaining power Ex: Uber - traditional taxis have to acquire licenses and can't as easily find buyers. Uber allows drivers to skip those steps, but that also gives the drivers a lot of power as Uber depends on how many drivers are willing to drive
Understand why Indeed.com allows free access by job seekers. Understand how to decide the money side and the subsidy side for a market with a two-sided network.
The job seekers do not pay, because those who want to post their jobs are paying. With a two sided market, one side is always paying.
Why do certain business entry barriers decrease as a result of cloud computing?
lowered the cost to access powerful systems and software, don't have to build the infrastructure themselves
Why is the iPhone so successful?
simple, free iTunes SW and iPod HW, high economies of scale, high economies of scope (cost spread across iPad, Mac and iPod)
How does Uber ensure rider and passenger quality? As a rider or passenger, how would you feel about these efforts? How does this change the service dynamic compared with traditional cab rides?
the uber app knows who the drivers are at all times, who was picked up and where they were taken bad performances are exposed and customers and drivers are able to rate each other and share the ratings
What is viral marketing? How can companies leverage social media to build a brand inexpensively?
Leveraging consumers to promote a product or service Viral marketing leverages customers to market their brand for them, making it very inexpensive
Why did Apple want to switch to new chip architecture for its Mac? What are the pros and cons?
Pros: more powerful, thin, light laptops, run Windows along with Windows apps, high volume chip supply Cons: rewrite/revise its OS/apps to work on Intel
What are network effects? Be able to list/identify examples of products that are subject to 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.
What should managers always ask before launching an innovative (but possibly disruptive) product?
1. What's your customer's job-to-be done? 2. In a perfect world, what information would help you complete that job? 3. If you had this information, what inside your business would need to change?
What is a router? What are the basic functions of router?
A computing device that connects networks and exchanges data between them Routers speak to each other and to other computers using IP (since routers are connected to the Internet, they have IP addresses, too. Some are even named)
What is coopetition? What are the risks and benefits to Netflix in using Amazon's cloud computing platform?
A phenomenon where firms both cooperate and compete with each other Netflix saves money on computing but also relies heavily on Amazon
Who are the rivals to the Netflix streaming effort? Do any of these firms have advantages that Netflix lacks? What are these advantages?
Amazon, Hulu, individual channel streaming services like HBOGo and CBS All Access Licenses to different shows, Amazon has a whole platform so more users
What are the characteristics of disruptive innovation? Be able to list/identify examples of disruptive innovation and explain why.
An innovation that creates a new market, but ultimately ends up disrupting an existing market. For example the smartphone disrupted the camera market. 2 characteristics: they come to the market with poor performance so existing customers don't value it. Over time, performance improves to the point where it invades established markets.
What are the major functions performed by a content delivery network (CDN) provider?
CDN: improve the delivery (and loading) speeds of Web pages
What are the benefits to users from cloud computing? What are the barriers to cloud computing adoption? When you decide if you want to get service from a particular cloud vendor, why should you consider the long-term viability of the cloud vendor?
Cheaper, price flexibility, highly scalable, higher quality, counters problem of software piracy Barriers: need to train staff, largely dependent on vendor, reliant on Internet connection, less customization options
Understand Moore's law is only related to (CPU) processing speed. However, not only processing speed but also communication speed and storage capacity all experience exponential growth over the last 30 years.
Chip performance doubles every 18 months Disk drive doubles every 12 months Equipment to speed transmission over fiber optic lines doubles every 9 months
Understand why the click-through rates at Facebook are substantially lower than the click-through rates at Google.
Concept of hunt vs. hike - When someone searches something on Google, they're on a hunt for something specific, so the ads are more related to the things they searched, making them more likely to click on them. People are typically just casually scrolling through Facebook, so they're not really looking for something particular
What are the challenges of adopting enterprise software? What are the different types of costs involved with enterprise software adoption? Understand why many firms have failed when attempting large-scale enterprise system integration.
Costs in implementation (software, hardware, development, and consulting fees), training Firms failed because they struggle to combine complex and incompatible information systems Firms that don't have common database systems with consistent formats across their enterprise struggle
What is Apple's "Digital Hub" strategy? What motivates this strategy?
Creating a platform using Apple products, iOS, and software (ex: Apple Music, iMessenger, etc.) Adds value to all devices, creates high switching costs, and increases network effects
What is crowdsourcing? What is its benefit to companies?
Crowdsourcing is a technique in which a 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 This is beneficial to companies because they can leverage a much larger population to solve problems and it's cheaper than hiring a traditional team
Be able to list/identify examples on how IT increases customers' switching costs.
Data can be a particularly strong switching cost for firms leveraging technology (even if these firms are cheaper or offer more features - if moving to the new firm means you'll lose information feeds, recommendations, and time savings provided by the firms that know you well) Fueled by scale over time, firms that have more customers and have been in business longer can gather data and thus improve the value chain and allow for more product recommendations
How does the market share for desktop operating systems differ from server operating systems?
Desktop OS: 91% Windows, 7% Mac, 2& Linux Server OS: 46% Windows, 29& Linux, 14% Unix, 12% Other
What is the difference between desktop application and enterprise application software? Be able to list/identify examples of each type of application software.
Desktop application- applications installed on your personal computer (word processor, spreadsheet, presentation software) Enterprise software- applications that address the needs of multiple, simultaneous users in an organization or work group
Understand why Adobe allows the free download of Acrobat Reader. Understand how to decide the money side and the subsidy side for a market with a two-sided network.
NEED HELP
What is distributed computing? Understand what is client and which is server in a distributed computing environment. Understand how client browsers on various machines interact with a company's systems.
Distributed computing: a form of computing where systems in different locations communicate and collaborate to complete a task Client: a software program that makes requests of a server program Server: a program that fulfills the requests of a client Using the WWW, when you type a website's address into your browser (the client, a.k.a. chrome or safari or another browser), you're telling the client to go to the Web server at the address provided and return the website requested
What is DNS? Understand the basic function of DNS and how a computer interacts with DNS to find the IP address of a given URL.
Domain Name System - a database that looks up hosts and domain names and returns the IP address of the URL
What is ERP? What is CRM? What is SCM? Understand what each of these enterprise systems basically does.
ERP- (Enterprise resource planning) packaged software applications sold to businesses that serve to work for many different roles (accounting, sales, human resources, etc) CRM- (customer relationship management) systems used to support customer-related sales and marketing activities SCM- (supply chain management) systems that help a firm manage aspects of its value chain
Why did the sharing economy become so popular?
Economic recession and stagnant wages made low cost alternatives and fast ways to make money very appealing to the public Advancements in technology increased people's trust with ratings, ensured payments, etc.
Understand why established firms sometimes fail to recognize and react to potentially disruptive innovations.
Established firms fail to detect disruptive tech because firms tend to focus on the customers. Customers initially don't want the tech because of poor performance, so firms would rather prioritize their time and efforts on big money-making projects.
What are the three primary sources of value for network effects?
Exchange: having a big network with a lot of people Staying power: long-term viability Complementary benefits: platforms are an example of this. Each add-on increases the value of an iOS product over a rival
How does Facebook benefit from strong network effects? How does Microsoft benefit from strong network effects? How does Apple benefit from strong network effect? What role did network effects play in your choice of an operating system, a social network, a word processor, or a mobile phone?
Facebook: social graph, friending, high switching costs, exchange Microsoft: high switching cost Apple: platform, created a billion-dollar hardware ecosystem
Understand how the Web works. What is HTTP? What is HTML?
HTTP- hypertext transfer protocol: the protocol that allows Web browsers and servers to communicate HTML - hypertext markup language (the language used to make web pages)
What is open source software?
Free software where anyone can modify the code
Fresh Direct business model: customers order groceries online and get them delivered to their house. The groceries are stored in giant warehouses. Factors for success: farm-to-table freshness, massive product choice, and supply chain savings IT and supply chain saving: greater incentives for supplier to cooperate leads to lower price and greater selection leads to sell products faster with higher inventory turns leads to paying suppliers faster AI software supports everything from baking the perfect bread to verifying orders Would not work well in rural areas because one of the main problems it solves is for people who don't have cars or don't want to deal with city traffic
Fresh Direct business model: customers order groceries online and get them delivered to their house. The groceries are stored in giant warehouses. Factors for success: farm-to-table freshness, massive product choice, and supply chain savings Would not work well in rural areas because one of the main problems it solves is for people who don't have cars or don't want to deal with city traffic
What advantages does FreshDirect have that insulate the firm from serious competition from startups copying its model?
Fresh Direct has a lot of technology that it uses as an advantage. It has highly customized and complex software that handles almost all of the tasks. It is also a large company in the region and it has good relations with the suppliers and has "access to customer databases" that it can use to keep refining their business.
Is Uber good for the economy or bad?
GOOD! expands the overall market for metered consumer transportation, makes a lot of jobs
What is the social graph? Why is Facebook's social graph considered to be stronger than the social graph created by the sites of its early competitors?
Global mapping of users and organizations and how they're connected. Facebook was the first site for people to identify themselves using real names, friends tag each other, comments carry names, "friending" and "liking" associate people.
What are the major factors explaining Netflix's success in its DVD-by-mail business?
Good brand built by good customer experience Large network of distribution centers allows for overnight shipping Large customer base (economies of scale) Long tail Large database of user data
What is an IP address? Understand that every device on the Internet needs to be assigned with an IP address.
IP address - a value used to identify a device connected to the Internet
How does "faster and cheaper computing" affect areas such as IT production and inventory decisions and how does it affect IT adoption decisions?
IT production: performance and price ratio changes rapidly Inventory decisions: inventory depreciates fast Adoption decisions: how long will your computing equipment remain useful? budget used for upgrading computing devices, software and training?
Why can't Netflix secure a long tail of streaming content that is the same size as its content catalog in the DVD-by-mail business? What is Netflix doing to make its streaming catalog more appealing than rival offerings?
Licensing costs are high, and the practice of windowing is also hindering Netflix from securing a long tail of streaming content. Netflix is changing its model to a "long-enough tail" rather than a long tail when it comes to streaming content Netflix is creating its own content through Netflix Originals in order to make its catalog more appealing than rival offerings
What is IaaS? For this service model, what are the resources the cloud vendor will provide/manage and what are the resources the cloud user will have a control? What basic question is it essentially addressing for a cloud user? Know that Amazon is the pioneer to officially offer IaaS to the public.
Infrastructure as a Service: provides the hardware and networking, which is aka the infrastructure, but nothing else For example, Netflix uses Amazon Web Services to store data
Be able to list/identify examples of computer input devices, processing devices, output devices, and storage devices.
Input devices: devices used to INPUT information - keyboard, mouse, video camera Output devices: monitor, speakers, projector Storage devices: USB(flash drives), hard disk, solid state drives, optical disks (CD, DVD)
Who are the major players in the CPU market? Understand the key strategies played by each of these firms.
Intel and AMD Intel buys all of the machines used to make chips. For every 10 machines Tokyo Electron would make, Intel would buy 9.
What is ISP? What is peering? How do carriers make money off of peering?
Internet Service Providers - a firm that provides access to the Internet Peering - when separate ISPs link networks to swap traffic Profit: "the money is made" in the ISP business by charging the end-points in a network—the customer organizations and end users that an ISP connects to the Internet.
Once a firm can detect disruptive technologies, what techniques can it use to nurture and develop these technologies?
Invest in these firms, create internal efforts, or acquire these firms
What are the benefits for Netflix to move from atoms to bits?
It eliminates costs related to shipping and handling. Customers get instant access to products.
What are commodities?
Items that consumers view as the same, so they usually base their purchase decision based on price. PCs have become commodities, usually only differentiated by OS and CPU
Understand the key reasons explaining Kodak's downfall.
Kodak ended due to the release of the iPhone with a camera on it.
What is "long tail"? How does Netflix benefit from the long tail? Why can't the traditional brick-and-mortar retailers capture the long tail effect?
Long tail: an extremely large selection of content or products. The long tail is a phenomenon whereby firms can make money by offering a near-limitless selection Netflix benefits from the long tail by offering such a large selection, making it more attractive than its rivals Traditional brick-and-mortar retailers can't capture the long tail effect because it is much more difficult to provide a near-limitless selection of physical DVDs rather than streaming bits since they have limited space
What are the main factors explaining why firms choose open source products over commercial alternatives?
Low cost, reliable, secure, scalable, and cuts down on time because you don't need to develop software from scratch
Be able to apply the five forces framework to an industry, assessing the competitive landscape and the role of technology in influencing the relative power of buyers, suppliers, competitors, entrants, and alternatives.
NEED HELP
Be able to decide the correct service model (among IaaS, PaaS, and SaaS) if given a scenario.
NEED HELP
Be able to list a technology-based company and discuss whether it enjoys sustainable competitive advantage based on the resources it controls. Understand that technology advantage alone will not yield sustainable competitive advantage.
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On how to leverage social media platforms, what is digital strategy and what is social strategy? Be able to list/identify examples that implement each strategy.
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Understand how to apply the five forces framework to assess the competitive landscape in the PC industry.
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Understand that advances in chip technology don't work alone; operating systems and applications must be written to take advantage of the new capabilities.
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Understand that the slowest part of the Internet is typically the last mile, not the backbone.
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Understand that the two major 3G standards (the more popular GSM and the less widely adopted CDMA) are being replaced by a single, dominant, higher-capacity 4G standard (LTE). The transition from 3G to 4G to 5G is increasing bandwidth and capacity, but usage continues to skyrocket as smartphone and tablet users stream increasing amounts of video and audio.
NEED HELP
What "class" of software does Netflix use to make movie recommendations? Think about Chapter 2: Which key competitive resource does this software "create"? What kinds of benefits does this provide to the firm? How does the long tail effect interact with its recommendation software?
Netflix used COLLABORATIVE FILTERING, a software that gathers consumer data from ratings after they watch movies/shows and uses it to personalize each individual's experience This creates high switching costs and provides more incentive for consumers to stay with the firm The high selection offered by Netflix's long tail interacts with its recommendation software to fine-tune recommendations to consumers The recommendation software will also recommend some of the less popular or older items on the long tail, so their costs to acquire those items are more worth it
What is an operating system? What are the basic functions of operating system? What determines the value of an operating system?
OS: controls computing hardware + provides common set of controls for managing computer hardware makes it easier for users to interact with computers and for programmers to write application software. value of an operating system: functionality and availability of the applications running on it.
Understand why a software company (e.g., Microsoft) could potentially generate high profit margin.
Once the software is developed, there are very few costs. You just need to copy the program and doesn't require any shipping and handling.
How does one-sided market differ from two-sided market? Be able to list/identify examples of two sided markets and explain how the two sides interact with each other.
One- market derives most of its value from a single class of users (instant messaging) Two- market comprises two distinct participants that add value (video game console owners and developers of video games)
What different business models can be built around open source software? Understand the motivations for large incumbents (such as IBM, Google, Oracle) to contribute to the development of open source software.
Open source firms can sell support and consulting services Big firms donate money to keep standards unified, and because it's still cheaper than if they were to create their own software
How have the rise of the Internet and the advance in IT impacted the competitive landscape of the music CD/ printed book industry?
Pandora, Spotify, and Apple Music have replaced CDs Most books are no longer sold in stores and many books only exist online
What is strategic positioning?
Performing different tasks than rivals, or the same tasks in a different way
What is PaaS? For this service model, what are the resources the cloud vendor will provide/manage and what are the resources the cloud user will have a control? What basic question is it essentially addressing for a cloud user? Know that Windows Azure and Google app engine are all examples of PaaS vendors.
Platform as a Service: the cloud vendor provides a more complete platform (e.g., hosting hardware, operating system, database, and other software), which clients use to build their own applications. PaaS gives the ability to deploy The Apple App Store is not considered a PaaS, but app engines, such as the Google app engine, are.
What are Porter's "five forces"?
Potential new entrants Rivalry among existing competitors Power of suppliers Threat of substitute Power of buyers
Who are the two of the leading ERP vendors? Be able to list the functions of a business that might be impacted by an ERP.
SAP + Oracle are the leading ERP vendors Accounting, Finance, Inventory Management, Human Resources
What are the key challenges to the sharing economy?
Safety issues, insurance concerns, regulation through legislation, uncertainty of ability to categorize workers as independent contractors
What are three biggest strategic moves by Jobs in the technology business?
The Digital Hub New Chip Architecture: switch from Motorola to Intel New Software
What is the Internet? What is the Web? Understand the difference between the two.
The Internet is a network of networks. The physical infrastructure (cables, WiFi, etc.) The Web is a client/server system in which the client makes a request of a server program, and the server program attempts to fulfill the request. The Web is a collection of protocols that flow through the Internet. The Internet enables the Web
What is blade-razor strategy? Be able to list/identify examples of using blade-razor strategy.
The razor blade strategy is the business model that gives the main product for cheap and then sells the additional products that complete it as more expensive and then continue to make a profit off of the razor blades and not the razors. Examples of the razor and razor blade strategy are the Kodak business model with its color film and Gillete with its razor blade. There is also the printer companies such as HP where you have to continue to pay for the ink and not the printer.
What is the "resource-based" view of competitive advantage? What are the characteristics of resources that may yield sustainable competitive advantage?
The resource based view of competitive advantage suggests that in order to maintain competitive advantage, a firm should control a set of exploitable resources that have four critical characteristics: Valuable Rare Imperfectly imitable Non-substitutable Additionally, it presents the idea that it is more feasible to use existing resources in new ways than to try and create new resources
What is a value chain?
The set of activities through which a product or service is created and delivered to customers
Be able to explain why Facebook acquired Instagram, WhatsApp, and Oculus VR.
There is a new competitive reality on Facebook and they lost the lead in mobile photo sharing because it differs from desktop. The deep pockets allowed it to acquire leading firms and removed rivals to strengthen assets. Facebook acquired Oculus because it wants to be the leader in new tech.
Why do some collaborative consumption firms choose to take possession of inventory rather than allow the "crowd" to provide it peer-to-peer style?
They want to ensure quality control to make sure customers get a positive experience. Ex: Rent the Runway
What are the potential benefits of adopting enterprise software?
They're time consuming and costly to build from scratch, so you save time and money. Helps streamline operations
Apple Case
Timeline: Jobs, who was often referred to as the "soul" of the company, was forced out in 1985. The boardroom coup left John Sculley, the executive whom Jobs had recruited from Pepsi-Cola, alone at the helm Sculley pushed the Mac into new markets, most notably in desktop publishing and education
What is the rationale for Apple to open physical stores?
To provide users with the "Apple experience" Consumers want to be able to see, touch, and engage with the products Apple gets to control their own distribution channel (takes out middlemen)
What are the major factors contributing to Uber's success?
Trust and convenience
What is the difference between TCP and UDP? Why would you use one over the other?
UDP has faster speed but less quality which stems from not confirming packet receival - often used for media streaming
What is URL? Be able to identify/label the protocol name, host name, domain name, path, and file name for a given URL.
Uniform resource locator, used interchangeable with web address Identifies resources on the internet and the app protocol needed to retrieve it (tells the browser where to go)
What is the difference between volatile memory and nonvolatile memory? What is the basic function of the central processing unit (CPU)?
Volatile memory- data that is only retained when a system is being powered Nonvolatile memory- data is retained when system is powered off CPU: selects instructions, processes them, performs arithmetic and logical comparisons and stores operations in memory
What are economies of scale?
When costs can be spread across increasing units of production or in serving multiple customers Businesses that have favorable economies of scale (like most Internet firms) are sometimes referred to as being highly scalable
Can Facebook turn Graph Search into a money maker? How could it do this, or why won't it accomplish this goal?
With Graph Search, Facebook allows users to draw meaning from the site's social graph and to find answers from social connections.
Is Netflix's recommendation software successful? Understand how Netflix built its recommendation software.
Yes, over 60% of the content users put on their list come from the recommendation system Netflix used crowdsourcing to improve Cinematch
Be able to evaluate the effectiveness of different advertising strategies on Facebook and explain why.
You are notified when your friends click on or like a certain ad. There are side bar ads based on what you click on.
Suppose now your company wants to adopt an enterprise software application (e.g., CRM, ERP) and you have two options - buying some packaged enterprise software or using software-as-a-service model (i.e. getting on-demand enterprise software). What are the benefits of buying the packaged one and what are the benefits of getting the on-demand one? Understand how the size of your organization affects your choice
benefits of buying packaged enterprise software (you own it): low purchase cost, self-hosted software, full control on customization, full ownership of intellectural property, quality under your control benefits of buying Saas (you don't own it): outsourced maintenance, few staff needed, low technical knowledge needed, low start-up effort if a company relies on unique processes, procedures, or technologies that create vital, differentiating competitive advantages, they should NOT outsource (no SaaS)
What are the benefits to vendors from offering cloud computing and what are the challenges for vendors to offer cloud computing?
benefits: lower cost, startup costs are low so financial risk mitigation, faster deployment times, variable operating expense, scalable systems, higher quality/service, remote access/availability barriers: dependence on a single vendor, concern about long-term viability of partner firms, forced to mitigate to new versions, reliance on network connection
What are the players in the ecosystem built around iPhone/iPad? How does each player benefit from this ecosystem? Do we see strong network effects in this ecosystem and why?
content providers (lots of competition and variety), iOS, App Store, iPhone and iPad, consumers
How does Uber leverage data in its service? What aspects of the firm's operations are improved through data analytics? Does this provide the firm with sustainable competitive advantage? Why or why not?
determined how many drivers the firm needs identified when/how to alert drivers of projected demand sets dynamic pricing allows Uber to cut prices and attract drivers to power continue growth and expansion