ISDS 705 Midterm
RSS & RSS Reader
(an acronym that stands for both "really simple syndication" and "rich site summary") enables busy users to scan the headlines of newly available content and click on an item's title to view items of interest, thus sparing them from having to continually visit sites to find out what's new. Users begin by subscribing to an RSS feed for a Web site, blog, podcast, or other data source. The title or headline of any new content will then show up in an RSS reader. Subscribe to the New York Times Technology news feed, for example, and you will regularly receive headlines of tech news from the Times. Viewing an article of interest is as easy as clicking the title you like. Subscribing is often as easy as clicking on the RSS icon appearing on the home page of a Web site of interest.
network effects
(sometimes called network externalities or Metcalfe's Law) exist when a product or service becomes more valuable as more people use it.
information asymmetry
A decision situation where one party has more or better information than its counterparty.
Resource-Based View
A firm must control resources with four characteristics; Valuable, rare, inimitable, non-substitutable
Distributed Computing
A form of computing where systems in different locations communicate and collaborate to complete a task.
distributed computing
A form of computing where systems in different locations communicate and collaborate to complete a task.
Zara
A game-changing clothes giant under parent company, Inditex Corporation. Tech enabled strategy, limited ads and sales. High vertical integration, production in house
Optical Fiber Line
A high-speed glass or plastic-lined networking cable used in telecommunications.
optical fiber line
A high-speed glass or plastic-lined networking cable used in telecommunications.
Blog Rolls
A list of a blogger's favorite blogs
Revision History
A log or record of changes made to a wiki, document, or spreadsheet.
One-Sided Market
A market that derives most of its value from a single class of users
A microblogging service that allows users to post via the web, SMSA text messaging, or other methods. Firms leverage Twitter for: >Real-time promotion >Customer response, engagement, and support >Gathering feedback and up-to-date information >Time-sensitive communication Twitter's new software development kit (SDK), Fabric, could be the way the company captures more revenues and broadens their reach.
Network Effects
A network becomes more valuable as more users can communicate with others on it Also referred to as network externalities or Metcalfe's Law. Most products are not subject to network effects. Presence of network effects influences the choice of one product or service over another.
Chapter 7: Peer Production, Social Media, and Web 2.0 - 7.1 key Takeaways
A new generation of Internet applications is enabling consumers to participate in creating content and services online. Examples include Web 2.0 efforts such as social networks, blogs, and wikis, as well as efforts such as Skype and BitTorrent, which leverage the collective hardware of their user communities to provide a service. These efforts have grown rapidly, most with remarkably little investment in promotion. Nearly all of these new efforts leverage network effects to add value and establish their dominance and viral marketing to build awareness and attract users. Experts often argue whether Web 2.0 is something new or merely an extension of existing technologies. The bottom line is the magnitude of the impact of the current generation of services. Peer production and social media fall under the Web 2.0 umbrella. These services often leverage the wisdom of crowds to provide insight or production that can be far more accurate or valuable than that provided by a smaller group of professionals. Network effects play a leading role in enabling Web 2.0 firms. Many of these services also rely on ad-supported revenue models.
Atoms to Bits
A phrase that represents the shift from physical products to digital products
Feed
A powerful feature of social networks, can be sorted in a variety of ways. Provides a timely list of the activities of and public messages from people, groups, and organizations that an individual has an association with.
Service-oriented architecture (SOA)
A robust set of Web services built around an organizations processes and procedures.
EDI (electronic data interchange)
A set of standards for exchanging messages containing formatted data between computer applications.
Sermo
A social network for physicians to help resolve confounding cases, widely used, highly effective
Sermo (Social Networks and Health Care)
A social network for physicians to help resolve confounding cases, widely used, highly effective. -Assist physicians gain peer opinion on confounding cases or other medical questions. Most doctors receive responses within an hour and a half of posting, and most cases are solved within twenty-four hours. -Eighty-five percent of posting physicians say they received information they were looking for. -More than 340,000 doctors in the US and UK are Sermo members, although a much smaller percentage is active on the site. -Member physicians are screened and verified to maintain the integrity of the service. -Sermo posts can also send valuable warning signals on issues such as disease outbreaks or unseen drug side effects. -Doctors have also used the service to rally against insurance company policy changes.
Software Package
A software product offered commercially by a third party.
software package
A software product offered commercially by a third party.
Roll Back
Ability to revert a wiki page to a prior version. Useful for restoring earlier work in the event of a posting error, inaccuracy, or vandalism.
Backward Compatibility
Ability to use complementary products developed for a prior generation of technology
5.2 Key Take Aways
As chips get smaller and more powerful, they get hotter and present power-management challenges. And at some, point Moore's Law will stop because we will no longer be able to shrink the spaces between components on a chip. Multicore chips use two or more low-power calculating "cores" to work together in unison, but to take optimal advantage of multicore chips, software must be rewritten to "divide" a task among multiple cores. 3-D or stackable semiconductors can make chips faster and run cooler by shortening distances between components, but these chips are harder to design and manufacture. New materials may extend the life of Moore's Law, allowing chips to get smaller, still. Entirely new methods for calculating, such as quantum computing, may also dramatically increase computing capabilities far beyond what is available today.
same-side exchange benefits
Benefits derived by interaction among members of a single class of participants. The network effects derived from IM users attracting more IM users as being "same-side exchange benefits"
Leveraging NE examples
Bill Gates leveraged network effects to turn Windows and Office into virtual monopolies and in the process became the wealthiest man in America. Mark Zuckerberg of Facebook, Pierre Omidyar of eBay, Caterina Fake and Stewart Butterfield of Flickr, Kevin Rose of Digg, Evan Williams and Biz Stone of Twitter, Chris DeWolfe and Tom Anderson—the MySpace guys—all of these entrepreneurs have built massive user bases by leveraging the concept. Many category-dominating organizations and technologies, including Microsoft, Apple, NASDAQ, eBay, Facebook, and Visa, owe their success to network effects. Network effects are also behind the establishment of most standards, including Blu-ray, Wi-Fi, and Bluetooth.
Omnichannel Strategy
Blends online and offline sales in ways that benefit the consumer
Social Media Tools
Blogs Wikis Electronic Social Network Microblogging Messaging Services Question & Answer Sites
Technology in China
China went from being unplugged to the most internet users in the world. WeChat received more payment activity in one day than paypal did in one year. Baidu, Tencent and Alibaba, the largest IPO, are powerhouses
Moore's Law
Chip performance doubles per every dollar every 18 months
Collaborative Filtering
Classification software that monitors trends among customers and uses this data to personalize individual customer experience
Success for Incumbents
Close off rival access and constantly innovate
Wikis Key Features
All changes are attributed, so others can see who made a given edit. A complete revision history is maintained so changes can be compared against prior versions and rolled back as needed. Automatic notification and monitoring of updates. Users subscribe to wiki content and can receive updates via e-mail or RSS feed when pages have been changed or new content has been added. All pages in a wiki are searchable. Specific wiki pages can be classified under an organized tagging scheme.
Total Cost of Ownership
All of the costs associated with the design, development, testing, implementation, documentation, training and maintenance of a software system.
Platforms
Allow for the development and integration of software products and other complementary goods. Products and services that encourage others to offer complementary goods are sometimes called platforms. Allowing other firms to contribute to your platform can be a brilliant strategy, because those firms will spend their time and money to enhance your offerings.
Social Media Awareness and Response Team (SMART)
An awareness of the power of social media can shape customer support engagement and crisis response, and strong corporate policies on social media use. Given the power of social media, it's time for all firms to create a social media awareness and response team. SMART capabilities key issues: -Creating the social media team -Establishing firm wide policies -Monitoring activity inside and outside the firm -Establishing the social media presence -Managing social media engagement and response
Cross-Side Exchange Benefit
An increase in the number of users on one side of the market, which creates a rise on the other side
Product Adoption Subsidization
An offer given, usually some discounted rate, to increase adoption of a product or service
Product Adoption Subsidization / Subsidize product adoption
An offer given, usually some discounted rate, to increase adoption of a product or service
Peer Production
Collaboration between users to create content, products, and services. Leveraged to create open source software that supports Web 2.0.
Owned Media
Communication channels that an organization controls. These can include firm-run blogs and websites, any firm-distributed corporate mobile website or app, and organization accounts on social media such as Twitter, Facebook, Pinterest, YouTube, and Instagram.
First Movers
Companies that respond before any of their competitors or rivals to market opportunities
First Movers (Move Early)
Companies that respond before any of their competitors or rivals to market opportunities
Contract Manufacturing
Company outsources with firm to produce with that firms resources and employees. Lower costs, can be bad for employees, can damage firm rep if partner misbehaves
Applications
Computer programs with a user interface
content adjacency
Concern that an advertisement will run near offensive material, embarrassing an advertiser and/or degrading their products or brands.
4.1 Key Take Aways
Analysts and managers have struggled to realize that dot-com start-up Netflix could actually create sustainable competitive advantage, beating back challenges from Wal-Mart and Blockbuster, among others. Data disclosure required by public companies may have attracted these larger rivals to the firm's market. Netflix operates via a DVD subscription and video streaming model. Although sometimes referred to as "rental," the model is really a substitute good for conventional use-based media rental.
technological leapfrogging
And the incumbent must not be able to easily copy any of the newcomer's valuable new innovations; otherwise the dominant firm will quickly match any valuable improvements made by rivals. As such, technological leapfrogging, or competing by offering a superior generation of technology, can be really tough
Desktop Software
Applications installed on a personal computer, typically supporting tasks performed by a single user.
Staying Power (NE Source) Examples
Consider that when someone buys a personal computer and makes a choice of Windows, Mac OS, or Linux, their investment over time usually greatly exceeds the initial price paid for the operating system. One invests in learning how to use a system, buying and installing software, entering preferences or other data, creating files—all of which mean that if a product isn't supported anymore, much of this investment is lost.
Web 1.0
Domain name speculation Publishing Content management systems Directories (taxonomy) Britannica Online, Encarta Personal websites Ofoto Instant messaging, SMS Monster.com RealNetworks Yellowpages.com Travelocity Vonage Catalogs Expedia, Orbitz
Oligopoly
Dominated by a small number of powerful sellers
Embedded System
Special-purpose software designed and included inside physical products
Twitter emerging as a legitimate business tool commercial examples:
Starbucks uses Twitter in a variety of ways. It has run Twitter-based contests and used the service to spread free samples of new products, such as its VIA instant coffee line. Twitter has also been a way for the company to engage customers in its cause-based marketing efforts, such as (Starbucks) RED, which supports (Product) RED. Starbucks has even recruited staff via Twitter and was one of the first firms to participate in Twitter's advertising model featuring "promoted tweets." Dell used Twitter to uncover an early warning sign indicating poor design of the keyboard on its Mini 9 Netbook PC. After a series of tweets from early adopters indicated that the apostrophe and return keys were positioned too closely together, the firm dispatched design change orders quickly enough to correct the problem when the Mini 10 was launched just three months later. By December 2009, Dell also claimed to have netted $6.5 million in outlet store sales referred via the Twitter account @DellOutlet (more than 1.5 million followers) and another $1 million from customers who have bounced from the outlet to the new products site. Brooklyn Museum patrons can pay an additional $20 a year for access to the private, members-only "1stFans" Twitter feed that shares information on special events and exclusive access to artist content. Twitter is credited with having raised millions via Text-to-Donate and other fundraising efforts following the Haiti earthquake. Twitter can be a boon for sharing time-sensitive information. The True Massage and Wellness Spa in San Francisco tweets last-minute cancellations to tell customers of an unexpected schedule opening. With Twitter, appointments remain booked solid. Gourmet food trucks, popular in many American cities, are also using Twitter to share location and create hipster buzz. Los Angeles's Kogi Korean Taco Truck now has over sixty thousand followers and uses Twitter to reveal where it's parked, ensuring long lines of BBQ-craving foodies. Of the firm's success, owner Roy Choi says, "I have to give all the credit to Twitter". Electronics retailer Best Buy has recruited over 2,300 Blue Shirt and Geek Squad staffers to crowdsource Twitter-driven inquiries via @Twelpforce, the firm's customer service Twitter account. Best Buy staffers register their personal Twitter accounts on a separate Best Buy-run site. Then any registered employees tweeting using the #twelpforce, will automatically have those posts echoed through @Twelpforce, with the employee's account credited at the end of the tweet. As of November 2009, Twelpforce had provided answers to over 19,500 customer inquiries.
four vales for the incumbent product
Staying power (switching cost), Complementary products, Exchange with a product's user base, Technological functionality
Immediate and Unfiltered Publication (Blog KF)
The ability to reach the public without limits on publication size and without having posts filtered, edited, or cut by the mainstream media
The Hike (Facebook)
Users have a rough idea of what they'll encounter, but they're there to explore and look around, enjoy the sights (or site).
Convergence (Expand)
When two or more markets, once separate, begin to offer similar features and capabilities
The long tail works because
because the cost of production and distribution drop to a point where it becomes economically viable to offer a huge selection. The long tail gives the firm a selection advantage (or one based on scale) that traditional stores simply cannot match.
microprocessor
brain of a computing device, it's the part of the computer that executes the instructions of a computer program, allowing it to run a Web browser, word processor, video game, or virus.
Brand versus advertising
brands are built through customer experience
How Important Are Switching Costs to Microsoft?
It is this switching cost that has given our customers the patience to stick with Windows through all our mistakes, our buggy drivers, our high TCO [total cost of ownership], our lack of a sexy vision at times, and many other difficulties [...] Customers constantly evaluate other desktop platforms, [but] it would be so much work to move over that they hope we just improve Windows rather than force them to move. [...] In short, without this exclusive franchise [meaning Windows] we would have been dead a long time ago.
Youth in Technology
Many of the world's most successful firms created by youth. Bill Gates, Michael Dell, Mark Zuckerburg, Steve Jobs were all very young when they began their tech empires
PatientsLikeMe (PLM)
Offers a social network empowering chronically ill patients across a wide variety of disease states
PatientsLikeMe (PLM) (Social Networks and Health Care)
Offers a social network empowering chronically ill patients across a wide variety of disease states. -The firm's "openness policy" is in contrast to privacy rules posted on many sites and encourages patients to publicly track and post conditions, treatments, and symptom variation over time, using the site's sophisticated graphing and charting tools. -The goal is to help others improve the quality of their own care by harnessing the wisdom of crowds.
Complementary Benefits
Product or services that create additional value for the primary product or service that makes up a network
Complementary Benefits (NE Source)
Product or services that create additional value for the primary product or service that makes up a network >Value-adding sources work together to reinforce one another to make the network effect even stronger. >Each add-on of an iOS product enhances the value of choosing it over a rival.
Adaptor
Product that allows a firm to use complementary products, data, or a user base of another product or services
Technology in Marketing
Shift from traditional media to web, increases customer tracking and analysis of campaigns, Firms are using apps to generate sales, improve rep, better serve
Microblogging
Short-message blogging made through a mobile device. Twitter is a microblogging service that allows users to post via the Web, SMSA text messaging, or a variety of third-party desktop and smartphone applications. Key Uses: Distribute time-sensitive information, share opinions, virally spread ideas, run contests and promotions, solicit feedback, provide customer support, track commentary on firms/products/issues, organize protests Providers: OPEN/PUBLIC: Facebook, Twitter, Google+ ENTERPRISE PLATFORMS: Slack, HipChat, SocialText Signals, Yammer, Salesforce.com (Chatter)
Internet of Things
Small parts put in various products that connect them to the internet and their users remotely. Rapid growth, 5 billion devices today, estimated 25 billion in the future
Web Services
Small pieces of code that are accessed via the application server which permit interoperable machine-to-machine interaction over a network.
Web services
Small pieces of code that are accessed via the application server which permit interoperable machine-to-machine interaction over a network.
Exchange (NE source)
Products and services subject to network effects foster exchange, which creates value. A network becomes more valuable because its users can potentially communicate with more people, thus, the importance of exchange in creating value. Every product or service subject to network effects fosters some kind of exchange. For firms leveraging technology, this might include anything you can represent in the ones and zeros of digital storage, such as messaging, movies, music, money, video games, and computer programs.
6.2 Where's All That Value Come From? - Key Takeaways
Products and services subject to network effects get their value from exchange, perceived staying power, and complementary products and services. Tech firms and services that gain the lead in these categories often dominate all rivals. Many firms attempt to enhance their network effects by creating a platform for the development of third-party products and services that enhance the primary offering.
The iPod Economy
Products built to work with the iPod range from automobiles to the iCarta toilet paper holder. Apple offers certification programs, where developers of accessories for the iPod and iPhone that meet certain guidelines can use the depicted logo. Each of these third-party products potentially enhances the value of owning an Apple product, while each logo serves as an additional advertisement for Apple. Apple even receives a royalty from firms that use the "Made for iPod" logo in advertisements and on product packaging.
Complementary Benefits (NE Source) Examples
Products might include "how-to" books, software add-ons, even labor. You'll find more books on auctioning over eBay, more virtual storefronts in Second Life, and more accountants that know Excel, than on any of their rivals. Why? Book authors, Second Life partners, and accountants invest their time where they're likely to reach the biggest market and get the greatest benefit. In auctions, virtual worlds, and spreadsheet software, eBay, Second Life, and Excel each dwarf their respective competition.
Application Programming Interfaces (APIs)
Programming hooks or guidelines published by firms to tell other programs how to get a service to perform a task such as send or receive data
C - Visual - Basic - Java - SQL
Programming languages designed to provide true platform independence for application developers
Scripting Languages
Programming tool that executes within an application. Scripting languages are interpreted within their applications, rather than compiled to run directly by a microprocessor.
Earned Media
Promotions that are not paid for or owned but rather grown organically from customer efforts or other favorable publicity (word of mouth, viral, facebook, tweets) Social media can be a key driver (think positive tweets, referring Facebook posts, and pins on Pinterest). Other forms of earned media include unsolicited positive press and positive customer word of mouth.
Paid Media
Refers to efforts where an organization pays to leverage a channel or promote a message. Includes things such as advertisement and sponsorships.
Inbound Marketing
Refers to leveraging online channels to draw consumers to the firm with compelling content rather than conventional forms of promotion such as advertising, e-mail marketing, traditional mailings, and sales calls. Marketing items that leverage online channels to draw consumers to a firm with compelling content other than conventional forms of promotion
Market Seeding
Refers to when a dominant firm begins to develop other complementary offerings to increase market dominance
fabs
chip plants (semiconductor fabrication facilities)
Random-access memory (RAM)
chip-based memory, think of RAM as temporary storage that provides fast access for executing computer programs and files. When you "load" or "launch" a program, it usually moves from your hard drive to those RAM chips, where it can be more quickly executed by the processor.
Mash-ups
combinations of two or more technologies or data feeds into a single, integrated tool. Some of the best known mash-ups leverage Google's mapping tools. HousingMaps.com combines Craigslist.org listings with Google Maps for a map-based display for apartment hunters. IBM linked together job feeds and Google Maps to create a job-seeker service for victims of Hurricane Katrina. SimplyHired links job listings with Google Maps, LinkedIn listings, and salary data from PayScale.com. And Salesforce.com has tools that allow data from its customer relationship management (CRM) system to be combined with data feeds and maps from third parties.
massively parallel processing
computers designed with many microprocessors that work together, simultaneously, to solve problems
Supercomputers
computers that are among the fastest of any in the world at the time of their introduction
viral marketing
consumers enlisted to promote a product or service
windowing
content is available to a given distribution channel (in theaters, through hospitality channels like hotels and airlines, on DVD, via pay-per-view, via pay cable, then broadcast commercial TV) for a specified time window, usually under a different revenue model (ticket sales, disc sales, license fees for broadcast)
economies of scale
cost of an investment can be spread across increasing units of production or in serving a growing customer base
Long tail debate
debate: (1) selection attracts customers, and (2) the Internet allows large-selection inventory efficiencies that offline firms can't match
software as a service (SaaS)
delivers applications over the cloud using a pay-per-use revenue model
Netflix strengths
firm's staggering selection, run around these limits of geography and shelf space, more money to be made selling the obscure stuff than the hits
grid computing
firms place special software on its existing PCs or servers that enables these computers to work together on a common problem
coopetition
frenemies, both a partner and a sort of competitor
Personal Digital Assistants (PDA)
handheld computing devices meant largely for mobile use outside an office setting
personal digital assistants (PDAs)
handheld computing devices meant largely for mobile use outside an office setting
crowdsourcing
inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new product innovation process
strategic positioning
performing different activities from those of rivals, or the same activities in a different way.
Operational effectiveness
performing the same tasks better than rivals perform them.
long tail
phenomenon whereby firms can make money by selling a near-limitless selection of less-popular products
Platform
products and services that allow for the development and integration of software products and other complementary goods
Commodities
products or services that are nearly identically offered from multiple vendors
Application Programming Interface (API)
programming hooks, or guidelines, published by firms that tell other programs how to get a service to perform a task such as send or receive data
Building a great brand
starts with offering exceptional value to the customer; brands are built through customer experience
Semiconductors
substances that can conduct electric current under some conditions but not under other conditions
SCM, CRM, and ERP
supply chain management (SCM; linking inbound and outbound logistics with operations), customer relationship management (CRM; supporting sales, marketing, and in some cases R&D), and enterprise resource planning software (ERP; software implemented in modules to automate the entire value chain)
brand
symbolic embodiment of all the information connected with a product or service, and a strong brand can also be an exceptionally powerful resource for competitive advantage
initial public stock offering (IPO)
- Also known as "going public." The first time a firm sells stock to the public
Microprocessor
Part of the program that executes the instructions of a program
Social Networks Key Features
-Detailed personal profiles -Affiliations with groups (e.g., alumni, employers, hobbies, fans, health conditions, causes); with individuals (e.g., specific "friends"); and with products, firms, and other organizations -Private messaging and public discussions -Media sharing (text, photos, video) -Discovery-fueling feeds of recent activity among members (e.g., status changes, new postings, photos, applications installed)
Blog Key Features (KF)
-Immediate and unfiltered publication -Ease of use -Comment threads -Reverse chronology -Persistence -Searchability -Tags -Trackbacks
Strategies for Competing in Markets with Network Effects (Examples in Parentheses)
-Move early (Yahoo! Auctions in Japan) -Subsidize product adoption (PayPal) -Leverage viral promotion (Skype; Facebook feeds) -Seed the market with complements (Blu-ray; Nintendo) -Form alliances and partnerships (NYCE vs. Citibank) -Establish distribution channels (Java with Netscape; Microsoft bundling Media Player with Windows) -Maintain backward compatibility (Apple's Mac OS X Rosetta translation software for PowerPC to Intel) -Expand by redefining the market to bring in new categories of users (Nintendo Wii) or through convergence (iPhone). -Encourage the development of complementary goods—this can include offering resources, subsidies, reduced fees, market research, development kits, venture capital (Facebook fbFund). -For rivals, be compatible with larger networks (Apple's move to Intel; Live Search Maps) -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)
Competing when network effects matter
-Move early (Yahoo! Auctions in Japan). -Subsidize product adoption (PayPal). -Leverage viral promotion (Skype, Facebook feeds, Uber). -Expand by redefining the market to bring in new categories of users or through convergence (iPhone). -Form alliances and partnerships (NYCE vs. Citibank) -Establish distribution channels (Java with Netscape, Microsoft bundling Media Player with Windows) -Seed the market with complements (Blu-ray, Nintendo) -Encourage the development of complementary goods (Facebook fbFund) -Maintain backward compatibility (Apple's Mac OS X Rosetta translation software for PowerPC to Intel) -Rivals: maintain compatibility with larger networks (Apple's move to Intel) -Incumbents: close off rival access and constantly innovate (Apple's efforts to block access to its own systems) -Large, established firms: make preannouncements (Apple Watch)
Corporate use of Social Networks
-Social networks have become organizational productivity tools. -Firms implement their own, internal social network platforms that they hope are more secure and tailored to firm needs. -These networks have replaced the traditional employee directory. -They're important since a large percentage of employees regularly work from home or client locations. -Firms are setting up social networks for customer engagement and mining these sites for customer ideas, innovation, and feedback. -Doctors are using social networking to more quickly and more accurately diagnose patients -Patients are using social networks to connect with and help others suffering with similar ailments.
Porter's five forces
1) the intensity of rivalry among existing competitors, (2) the threat of new entrants, (3) the threat of substitute goods or services, (4) the bargaining power of buyers, and (5) the bargaining power of suppliers
Most Popular Social Apps (per Statista)
1. Facebook 2. Instagram 3. Facebook Messenger 4. Twitter 5. Pinterest 6. Snapchat 7. Reddit 8. Tumblr 9. WhatsApp 10. Google Hangouts
four supporting components of the value chain
1. Firm infrastructure 2.Human resource management 3.Technology / research and development 4. Procurement
five primary components of the value chain
1. Inbound logistics 2. Operations 3. Outbound logistics 4. Marketing and sales 5. Support
first wave
1960s, computing was limited to large, room-sized mainframe computers that only governments and big corporations could afford.
Extensible Markup Language (XML)
A tagging language that can be used to identify data fields made available for use by other applications. Most APIs and Web services send messages where the data exchanged is wrapped in identifying XML tags.
Revision History (Wikis KF)
A timeline of all changes made to the wiki
Technology in Law
Activity is increasing in IP, patents, piracy and privacy. Need legal teams to deal with legality, proprietary methods and content, help enforce claims domestically and internationally
scale advantages
Advantages related to a firm's size
A Little Too Public?
As with any type of social media, content flows in social networks are difficult to control. Embarrassing disclosures can emerge from public systems or insecure internal networks. Employees embracing a culture of digital sharing may err and release confidential or proprietary information. Networks could serve as a focal point for the disgruntled (imagine the activity on a corporate social network after a painful layoff). Publicly declared affiliations, political or religious views, excessive contact, declined participation, and other factors might lead to awkward or strained employee relationships. Users may not want to add a coworker as a friend on a public network if it means they'll expose their activities, lives, persona, photos, sense of humor, and friends as they exist outside of work. And many firms fear wasted time as employees surf the musings and photos of their peers. All are advised to be cautious in their social media sharing. Employers are trawling the Internet, mining Facebook, and scouring YouTube for any tip-off that a would-be hire should be passed over. A word to the wise: those Facebook party pics, YouTube videos of open mic performances, or blog postings from a particularly militant period might not age well and may haunt you forever in a Google search. Think twice before clicking the upload button! As Socialnomics author Erik Qualman puts it, "What happens in Vegas stays on YouTube (and Flickr, Twitter, Facebook...)."
Examples of Wiki Use
At Pixar, all product meetings have an associated wiki to improve productivity. The online agenda ensures that all attendees can arrive knowing the topics and issues to be covered. Anyone attending the meeting (and even those who can't make it) can update the agenda, post supporting materials, and make comments to streamline and focus in-person efforts. At European investment bank Dresdner Kleinwort Wasserstein, employees use wikis for everything from setting meeting agendas to building multimedia training for new hires. Six months after launch, wiki use had surpassed activity on the firm's established intranet. Wikis are also credited with helping to reduce Dresdner e-mail traffic by 75 percent. Sony's PlayStation team uses wikis to regularly maintain one-page overviews on the status of various projects. In this way, legal, marketing, and finance staff can get quick, up-to-date status reports on relevant projects, including the latest projected deadlines, action items, and benchmark progress. Strong security measures are enforced that limit access to only those who must be in the know, since the overviews often discuss products that have not been released. Employees at investment-advisory firm Manning and Napier use a wiki to collaboratively track news in areas of critical interest. Providing central repositories for employees to share articles and update evolving summaries on topics such as health care legislation, enables the firm to collect and focus what would otherwise be fragmented findings and insight. Now all employees can refer to central pages that each serve as a lightning rod attracting the latest and most relevant findings. Intellipedia is a secure wiki built on Intelink, a U.S. government system connecting sixteen spy agencies, military organizations, and the Department of State. The wiki is a "magnum opus of espionage," handling some one hundred thousand user accounts and five thousand page edits a day. Access is classified in tiers as "unclassified," "secret," and "top secret" (the latter hosting 439,387 pages and 57,248 user accounts). A page on the Mumbai terror attacks was up within minutes of the event, while a set of field instructions relating to the use of chlorine-based terror bombs in Iraq was posted and refined within two days of material identification—with the document edited by twenty-three users at eighteen locations.
Straddling
Attempts to occupy more that one position, while failing to match the benefits of a more efficient, singularly focused rival
7.2 Blogs - Key Takeaways
Blogs provide a rapid way to distribute ideas and information from one writer to many readers. Ranking engines, trackbacks, and comments allow a blogger's community of readers to spread the word on interesting posts and participate in the conversation, and help distinguish and reinforce the reputations of widely read blogs. Well-known blogs can be powerfully influential, acting as flashpoints on public opinion. Firms ignore influential bloggers at their peril, but organizations should also be cautious about how they use and engage blogs, and avoid flagrantly promotional or biased efforts. Top blogs have gained popularity, valuations, and profits that far exceed those of many leading traditional newspapers, and leading blogs have begun to attract well-known journalists away from print media. Senior executives from several industries use blogs for business purposes, including marketing, sharing ideas, gathering feedback, press response, image shaping, and reaching consumers directly without press filtering.
Building Brands
Built via customer experience. Netflix provided this when Blockbuster could not
Technology in Business
Business models and strategies rapidly change because of technology. It can create new giants, but many companies can fall because of competition
Platforms examples
Consider the billion-dollar hardware ecosystem that Apple has cultivated around the iPod. There are over ninety brands selling some 280 models of iPod speaker systems. Thirty-four auto manufacturers now trumpet their cars as being iPod-ready, many with in-car docking stations and steering wheel iPod navigation systems. Each add-on enhances the value of choosing an iPod over a rival like the Microsoft Zune. And now with the App Store for the iPhone, iPod touch, and iPad, Apple is doing the same thing with software add-ons. Software-based ecosystems can grow very quickly. In less than a year after its introduction, the iTunes App Store boasted over fifty thousand applications, collectively downloaded over one billion times.
Windowing
Content available for a limited period of time through a particular distribution channel
Logistics
Coordinating and enabling the flow of goods, people, information, and other resources among locations.
7.8 Crowdsourcing - Key Takeaways
Crowdsourcing tackles challenges through an open call to a broader community of potential problem solvers. Examples include Goldcorp's discovering of optimal mining locations in land it already held, Facebook's leverage of its users to create translations of the site for various international markets, and Netflix's solicitation of improvements to its movie recommendation software. Several firms run third-party crowdsourcing forums, among them InnoCentive for scientific R&D, TopCoder for programming tasks, and Amazon's Mechanical Turk for general work.
Ease of Use
Creating a new post usually involves clicking a single button
Ease of Use (Blog KF)
Creating a new post usually involves clicking a single button
Is This Good for Innovation?
Critics of firms that leverage proprietary standards for market dominance often complain that network effects are bad for innovation. But this statement isn't entirely true. While network effects limit competition against the dominant standard, innovation within a standard may actually blossom. Consider Windows. Microsoft has a huge advantage in the desktop operating system market, so few rivals try to compete with it. Apple's Mac OS and the open source Linux operating system are the firm's only credible rivals, and both have tiny market shares. But the dominance of Windows is a magnet for developers to innovate within the standard. Programmers with novel ideas are willing to make the investment in learning to write software for Windows because they're sure that a Windows version can be used by the overwhelming majority of computer users. By contrast, look at the mess we initially had in the mobile phone market. With so many different handsets offering different screen sizes, running different software, having different key layouts, and working on different carrier networks, writing a game that's accessible by the majority of users is nearly impossible. Glu Mobile, a maker of online games, launched fifty-six reengineered builds of Monopoly to satisfy the diverse requirements of just one telecom carrier. As a result, entrepreneurs with great software ideas for the mobile market were deterred because writing, marketing, and maintaining multiple product versions is both costly and risky. It wasn't until Apple's iPhone arrived, offering developers both a huge market and a consistent set of development standards, that third-party software development for mobile phones really took off.
Searchability (Blog KF)
Current and archived posts are easily searchable
7.9 Get SMART: The Social Media Awareness and Response Team - Key Takeaways
Customer conversations are happening and employees are using social media. Even firms that aren't planning on creating a social media presence need to professionalize the social media function in their firm (consider this a social media awareness and response team, or SMART). Social media is an interdisciplinary practice, and the team should include professionals experienced in technology, marketing, PR, customer service, legal, and human resources. While the social media team provides guidance, training, and oversight, and structures crisis response, it's important to ensure that authentic experts engage on behalf of the firm. Social media is a conversation, and this isn't a job for the standard PR-style corporate spokesperson. Social media policies revolve around "three Rs": representation, responsibility, and respect. Many firms have posted their policies online so it can be easy for a firm to assemble examples of best practice. Firms must train employees and update their knowledge as technologies, effective use, and threats emerge. Security training is a vital component of establishing social media policy. Penalties for violation should be clear and backed by enforcement. While tempting, creating sock puppets to astroturf social media with praise posts violates FTC rules and can result in prosecution. Many users who thought their efforts were anonymous have been embarrassingly exposed and penalized. Customers are also using social media to expose firm dishonesty. Many tools exist for monitoring social media mentions of an organization, brands, competitors, and executives. Google Alerts, Twitter search, TweetDeck, Twitrratr, bit.ly, Facebook, and Foursquare all provide free tools that firms can leverage. For-fee tools and services are available as part of the online reputation management industry (and consultants in this space can also provide advice on improving a firm's online image and engagement). Social media are easy to adopt and potentially easy to abuse. The social media team can provide monitoring and support for firm-focused efforts inside the company and running on third-party networks, both to improve efforts and prevent unwanted disclosure, compliance, and privacy violations. The embassy approach to social media has firms establish their online presence through consistently named areas within popular services (e.g., facebook.com/starbucks, twitter.com/starbucks, youtube.com/starbucks). Firms can also create their own branded social media sites using tools such as Salesforce.com's "Ideas" platform. Social media provides "four Ms" of engagement: the megaphone to send out messages from the firm, the magnet to attract inbound communication, and monitoring and mediation—paying attention to what's happening online and selectively engage conversations when appropriate. Engagement can be public or private. Engagement is often more art than science, and managers can learn a lot by paying attention to the experiences of others. Firms should have clear rules for engagement and escalation when positive or negative issues are worthy of attention.
Share or Stay Proprietary?
Defensive moves like the ones above are often meant to diffuse the threat of a proprietary rival. Sometimes firms decide from the start to band together to create a new, more open standard, realizing that collective support is more likely to jumpstart a network than if one firm tried to act with a closed, proprietary offering. Examples of this include the coalitions of firms that have worked together to advance standards like Bluetooth and Wi-Fi. While no single member firm gains a direct profit from the sale of devices using these standards, the standard's backers benefit when the market for devices expands as products become more useful because they are more interoperable.
Zara Design
Demand dictates products, new designers out of school, regularly rotating teams
4.2 Key Take Aways
Durable brands are built through customer experience, and technology lies at the center of the Netflix top satisfaction ratings and hence the firm's best-in-class brand strength. Physical retailers are limited by shelf space and geography. This limitation means that expansion requires building, stocking, and staffing operations in a new location. Internet retailers serve a larger geographic area with comparably smaller infrastructure and staff. This fact suggests that Internet businesses are more scalable. Firms providing digital products and services are potentially far more scalable, since physical inventory costs go away. The ability to serve large geographic areas through lower-cost inventory means Internet firms can provide access to the long tail of products, potentially earning profits from less popular titles that are unprofitable for physical retailers to offer. Netflix technology revitalizes latent studio assets. Revenue sharing allows Netflix to provide studios with a costless opportunity to earn money from back catalog titles: content that would otherwise not justify further marketing expense or retailer shelf space. The strategically aligned use of technology by this early mover has allowed Netflix to gain competitive advantage through the powerful resources of brand, data and switching costs, and scale. Collaborative filtering technology has been continually refined, but even if this technology is copied, the true exploitable resource created and leveraged through this technology is the data asset. Technology leveraged across the firm's extensive distribution network offers an operational advantage that allows the firm to reach nearly all of its customers with one-day turnaround.
5.4 Key Take Aways
E-waste may be particularly toxic since many components contain harmful materials such as lead, cadmium, and mercury. Managers must consider and plan for the waste created by their products, services, and technology used by the organization. Consumers and governments are increasingly demanding that firms offer responsible methods for the disposal of their manufactured goods and the technology used in their operations. Managers must audit disposal and recycling partners with the same vigor as their suppliers and other corporate partners. If not, an organization's equipment may end up in environmentally harmful disposal operations.
Blogs Key Features
Ease of use. Creating a new post usually involves clicking a single button. Reverse chronology. Posts are listed in reverse order of creation, making it easy to see the most recent content. Comment threads. Readers can offer comments on posts. Persistence. Posts are maintained indefinitely at locations accessible by permanent links. Searchability. Current and archived posts are easily searchable. Tags. Posts are often classified under an organized tagging scheme. Trackbacks. Allows an author to acknowledge the source of an item in their post, which allows bloggers to follow the popularity of their posts among other bloggers.
Neutral Point of View (NPOV)
Editorial style that is free of bias and opinion But firms that overreach and try to influence an entry outside of Wikipedia's mandated neutral point of view (NPOV), risk a backlash and public exposure. Version tracking means the wiki sees all. Users on computers at right-leaning Fox News were embarrassingly caught editing the wiki page of the lefty pundit and politician Al Franken (a nemesis of Fox's Bill O'Reilly); Sony staffers were flagged as editing the entry for the Xbox game Halo 3; and none other than Wikipedia founder Jimmy Wales was criticized for editing his own Wikipedia biography—acts that some consider bad online form at best, and dishonest at worst.
7.4 Electronic Social Networks - Key Takeaways
Electronic social networks help individuals maintain contacts, discover and engage people with common interests, share updates, and organize as groups. Modern social networks are major messaging services, supporting private one-to-one notes, public postings, and broadcast updates or "feeds." Social networks also raise some of the strongest privacy concerns, as status updates, past messages, photos, and other content linger, even as a user's online behavior and network of contacts changes. Network effects and cultural differences result in one social network being favored over others in a particular culture or region. Information spreads virally via news feeds. Feeds can rapidly mobilize populations, and dramatically spread the adoption of applications. The flow of content in social networks is also difficult to control and sometimes results in embarrassing public disclosures. Feeds have a downside and there have been instances where feed mismanagement has caused user discontent, public relations problems, and the possibility of legal action. The use of public social networks within private organizations is growing, and many organizations are implementing their own, private, social networks. Firms are also setting up social networks for customer engagement and mining these sites for customer ideas, innovation, and feedback.
One-Sided Market Example
Instant messaging, where everyone can send and receive messages to one another. Some networks derive most of their value from a single class of users. An example of this kind of network is instant messaging (IM). While there might be some add-ons for the most popular IM tools, they don't influence most users' choice of an IM system. You pretty much choose one IM tool over another based on how many of your contacts you can reach.
Astroturfing
Engineering the posting of positive comments and reviews of a firm's product and services. Ratings sites will penalize firms that offer incentives for positive feedback posts. Creating sock puppets to astroturf violates FTC rules and can result in prosecution.
in order to win customers away from a rival one must...
Ensure their value added exceeds the incumbent's value plus any perceived customer switching costs
Embassy
Established online presence where a firm can be reached by customers
Establishing a Presence: Embassy
Established online presence where a firm can be reached by customers Embassy approach to social media has firms establish their online presence at various services with a consistent name. Firm's social media embassies can be highlighted in physical space such as: -In print -On bags and packaging -On store signage Firms hoping to get in on the online conversation should make it easy for their customers to find them. Many firms take an embassy approach to social media, establishing presence at various services with a consistent name. Think facebook.com/starbucks, twitter.com/starbucks, youtube.com/starbucks, flickr.com/starbucks, and so on. Corporate e-mail and Web sites can include icons linking to these services in a header or footer. The firm's social media embassies can also be highlighted in physical space such as in print, on bags and packaging, and on store signage. Firms should try to ensure that all embassies carry consistent design elements, so users see familiar visual cues that underscore they are now at a destination associated with the organization.
Fair Factories Clearinghouse
Established with major effort from Reebok, provides systems where companies may share audit info on contract manufacturers. Keep record of misdeeds and notifies all members
Another key lesson from the loss of eBay Japan?
Exchange depends on the ability to communicate! EBay's huge network effects in the United States and elsewhere didn't translate to Japan because most Japanese aren't comfortable with English, and most English speakers don't know Japanese. The language barrier made Japan a "greenfield" market with no dominant player, and Yahoo!'s early move provided the catalyst for victory.
Three value-adding sources
Exchange, staying power, and complementary benefits They often work together to reinforce one another in a way that makes the network effect even stronger. When users exchanging information attract more users, they can also attract firms offering complementary products. When developers of complementary products invest time writing software—and users install, learn, and customize these products—switching costs are created that enhance the staying power of a given network. From a strategist's perspective this can be great news for dominant firms in markets where network effects exist. The larger your network, the more difficult it becomes for rivals to challenge your leadership position.
Fast Follower Problem
Exists when competitors watch and learn from a competitor, then enter the market with a comparative or superior product at a lower price. Technology is very susceptible to this.
Exchange (NE source) Examples
Facebook for one person isn't much fun, and the first guy in the world with a fax machine didn't have much more than a paperweight. But as each new Facebook friend or fax user comes online, a network becomes more valuable because its users can potentially communicate with more people.
Organic Reach & Advertising
Facebook's algorithms have continually decreased the reach of fan page posts, meaning that firms are reaching fewer and fewer of their fans (although Facebook will gladly sell firms ad products to improve reach). Twitter posts appear chronologically in the feed of any follower. This means that as long as followers have Twitter open, any organically shared content will scroll by—no gate keepers. ==Twitter offers mechanisms to promote tweets. Users don't have to be following a firm to see its "promoted" ad, which can be served whenever a user visits Twitter, and the service offers extensive targeting. ==Advertisers can promote tweets to any user based on: geography, language, keywords, interests, and device type, even matching e-mail addresses to those in their CRM (customer relationship management systems). ==Twitter's fast-growing MoPub service connects advertisers that use ad networks like Google's AdMob, Apple's iAd, and Facebook's Audience Network with firms that want to auction off ad space in their apps and services (and it can use Twitter data for better ad targeting). This leverages data to make money without running more ads on its own service.
Sock Puppet
Fake online persona created to promote a particular point of view, product or individual Creating sock puppets to astroturf violates FTC rules and can result in prosecution.
The Osborne Effect
Firm experiencing a sharp and detrimental drop in the sales of current offerings due to its preannouncement of forthcoming products When a firm experiences a sharp decline in sales of current offerings because of pre-announcements
Leverage Distribution Channels
Firms can also think about novel ways to distribute a product or service to consumers. Sun faced a challenge when launching the Java programming language—no computers could run it. In order for Java to work, computers need a little interpreter program called the Java Virtual Machine (JVM). Most users weren't willing to download the JVM if there were no applications written in Java, and no developers were willing to write in Java if no one could run their code. Sun broke the logjam when it bundled the JVM with Netscape's browser. When millions of users downloaded Netscape, Sun's software snuck in, almost instantly creating a platform of millions for would-be Java developers. Today, even though Netscape has failed, Sun's Java remains one of the world's most popular programming languages. Indeed, Java was cited as one of the main reasons for Oracle's 2009 acquisition of Sun, with Oracle's CEO saying the language represented "the single most important software asset we have ever acquired". Microsoft is in a particularly strong position to leverage this approach. The firm often bundles its new products into its operating systems, Office suite, Internet Explorer browser, and other offerings. The firm used this tactic to transform once market-leader Real Networks into an also-ran in streaming audio. Within a few years of bundling Windows Media Player (WMP) with its other products, WMP grabbed the majority of the market, while Real's share had fallen to below 10 percent. Caution is advised, however. Regional antitrust authorities may consider product bundling by dominant firms to be anticompetitive. European regulators have forced Microsoft to unbundle Windows Media Player from its operating system and to provide a choice of browsers alongside Internet Explorer.
scalable
Firms that benefit from scale economies as they grow
Web 2.0
Internet services that foster collaboration and information sharing Search engine optimization and fans Participation Wikis Tagging ("folksonomy") Wikipedia Blogging, Status updates, Link Sharing Instagram, Flickr, Facebook, Twitter, Facebook, SnapChat, WhatsApp LinkedIn YouTube Yelp TripAdvisor SkypePinterest Airbnb, Uber, RelayRides
mainstream media (MSM)
For example, it's not uncommon for blogs focused on the law or politics to provide a detailed dissection of a Supreme Court opinion within hours of its release—offering analysis well ahead of, and with greater depth, than via what bloggers call the mainstream media (MSM). As such, it's not surprising that most mainstream news outlets have begun supplementing their content with blogs that can offer greater depth, more detail, and deadline-free timeliness.
Antitrust: Real Versus Microsoft
From October 2001 to March 2003, Microsoft's bundling of Windows Media Player in versions of its operating system ensured that the software came preinstalled on nearly all of the estimated 207 million new PCs shipped during that period. By contrast, Real Networks' digital media player was preinstalled on less than 2 percent of PCs. But here's the kicker that got to regulators (and Real): Microsoft's standard contract with PC manufacturers "prevented them not only from removing the Windows Media Player, but even [from] providing a desktop icon for Real Networks". While network effects create monopolies, governments may balk at allowing a firm to leverage its advantages in ways that are designed to deliberately keep rivals from the market.
New technologies have...
Fueled globalization Redefined concepts of software and computing Crushed costs Fueled data-driven decision making Raised privacy and security concerns
New Technology
Fuels globalization, redefined concepts of software and computing, lowered costs, fueled data driven decision making, raised privacy and security concerns
Two-Sided Market Example
Gaming Consoles - owners are attracted to platforms with the most games, while innovative developers are attracted to platforms that have the most users. Some markets are comprised of two distinct categories of network participant. Consider video games. People buy a video game console largely based on the number of really great games available for the system. Software developers write games based on their ability to reach the greatest number of paying customers, so they're most likely to write for the most popular consoles first. Economists would call this kind of network a two-sided market (network markets comprised of two distinct categories of participant, both of which that are needed to deliver value for the network to work).
Wisdom of Crowds
Idea that group of individuals will collectively have more insight than a single or small group of trained professionals. Consists of untrained amateurs. Many social software efforts leverage what has come to be known as the wisdom of crowds. In this concept, a group of individuals (the crowd often consists mostly of untrained amateurs), collectively has more insight than a single or small group of trained professionals. Made popular by author James Surowiecki (whose best-selling book was named after the phenomenon), the idea of crowd wisdom is at the heart of wikis, folksonomy tagging systems, and many other online efforts. An article in the journal Nature positively comparing Wikipedia to Encyclopedia Britannica lent credence to social software's use in harnessing and distilling crowd wisdom.
Expand by Redefining the Market
If a big market attracts more users (and in two-sided markets, more complements), why not redefine the space to bring in more users? Nintendo did this when launching the Wii. While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to develop a machine to appeal to families, women, and age groups that normally shunned alien shoot-'em ups. By going after a bigger, redefined market, Nintendo was able to rack up sales that exceeded the Xbox 360, even though it followed the system by twelve months.
Technology in Accounting
Improves audit reliability, increased regulation has strengthened relationship between accounting and technology. Many firms have spawned technology focused consulting practices
Griefer
Internet vandal and mischief maker, AKA, a troll
6.3 One-Sided or Two-Sided Markets? - Key Takeaways
In one-sided markets, users gain benefits from interacting with a similar category of users (think instant messaging, where everyone can send and receive messages to one another). In two-sided markets, users gain benefits from interacting with a separate, complementary class of users (e.g., in the video game industry console owners are attracted to platforms with the most games, while innovative developers are attracted to platforms that have the most users).
wave four
In the 1990s wave four came in the form of Internet computing—cheap servers and networks made it possible to scatter data around the world, and with more power, personal computers displayed graphical interfaces that replaced complex commands with easy-to-understand menus accessible by a mouse click. At the close of the last century, the majority of the population in many developed countries had home PCs, as did most libraries and schools.
Technology in India
India has emerged as a techno power house, 2 decades have amassed 120 billion dollar industry. TCS (Tata Consulting Service) is second only to IBM as a technology solutions firm
Wikimasters
Individuals employed by organizations to review community content. Useful for jump-starting a wiki. Employed to delete excessive posts, move commentary to the best location, and edit as necessary. Jump-starting a wiki can be a challenge, and an underused wiki can be a ghost town of orphan, out-of-date, and inaccurate content. Fortunately, once users see the value of wikis, use and effectiveness often snowballs. The unstructured nature of wikis are also both a strength and weakness. Some organizations employ wikimasters to "garden" community content; "prune" excessive posts, "transplant" commentary to the best location, and "weed" as necessary. Wikipatterns.com offers a guide to the stages of wiki adoption and a collection of community-building and content-building strategies.
Viral
Information or applications that spread rapidly between users Feeds are inherently viral. By seeing what others are doing on a social network, feeds can rapidly mobilize populations and dramatically spread the adoption of applications. Leveraging feeds, it took just ten days for the Facebook group Support the Monks' Protest in Burma to amass over one hundred and sixty thousand Facebook members. Feeds also helped music app iLike garner three million Facebook users just two weeks after its launch. Its previous Web-based effort took eight months to reach those numbers.
flash memory
It's not as fast as the RAM used in most traditional PCs, but holds data even when the power is off (so flash memory is also nonvolatile memory)
Electronic social network
Key Uses: Discover and reinforce affiliations, identify experts, message individuals or groups, visually share media Providers: OPEN/PUBLIC: Facebook, LinkedIn, Google+ ENTERPRISE/PRIVATE PLATFORMS: Ning, Lithium, SelectMinds, LiveWorld, IBM Lotus Connections, Salesforce.com, Socialtext
Messaging Services
Key uses: Communicate with individuals or groups of users using short-format text, graphics, and video. Most messaging is done using mobile devices. Providers: TYPES OF SERVICE: •Photo •SMS Replacement •Enterprise •Anonymous
Question & Answer Sites
Key uses: Knowledge sharing, discovery, learning, reputation building. Providers: Quora, Stack Exchange/Stack Overflow
Technology in Human Resources
Knowledge Management is moving to social media. Employee training, screening and evaluation. Recruiting, professional social networking, job seekers
Trackbacks
Links in a blog post that refer readers back to cited sources
Trackbacks (Blog KF)
Links in a blog post that refer readers back to cited sources Allows an author to acknowledge the source of an item in their posts, which allows bloggers to follow the popularity of their posts among other bloggers.
Collaborative Consumption
Participants share access to products and services rather than having ownership
Monopoly Examples
Look at all of the examples listed so far—in nearly every case the dominant player has a market share well ahead of all competitors. When, during the U.S. Microsoft antitrust trial, Judge Thomas Penfield Jackson declared Microsoft to be a monopoly (a market where there are many buyers but only one dominant seller), the collective response should have been "of course." Why? The natural state of a market where network effects are present (and this includes operating systems and Office software) is for there to be one major player. Since bigger networks offer more value, they can charge customers more. Firms with a commanding network effects advantage may also enjoy substantial bargaining power over partners. For example, Apple, which controls over 75 percent of digital music sales, for years was able to dictate song pricing, despite the tremendous protests of the record labels. In fact, Apple's stranglehold was so strong that it leveraged bargaining power even though the "Big Four" record labels (Universal, Sony, EMI, and Warner) were themselves an oligopoly (a market dominated by a small number of powerful sellers) that together provide over 85 percent of music sold in the United States. It's important to note that the best product or service doesn't always win. PlayStation 2 dominated the video console market over the original Xbox, despite the fact that nearly every review claimed the Xbox was hands-down a more technically superior machine. Why were users willing to choose an inferior product (PS2) over a superior one (Xbox)? The power of network effects! PS2 had more users, which attracted more developers offering more games.
Success for Rivals
Maintain compatibility with larger networks
Success for Established Firms
Make pre-announcements carefully
7.7 Prediction Markets and the Wisdom of Crowds - Key Takeaways
Many Web 2.0 efforts allow firms to tap the wisdom of crowds, identifying collective intelligence. Prediction markets tap crowd opinion with results that are often more accurate than the most accurate expert forecasts and estimates. Prediction markets are most accurate when tapping the wisdom of a diverse and variously skilled and experienced group, and are least accurate when participants are highly similar.
User Interface
Mechanism through which users interact with a computing device
Hash Tags
Method for organizing tweets where keywords are preceded by the # character
What If Microsoft Threw a Party and No One Showed Up?
Microsoft launched the Zune media player with features that should be subject to network effects—the ability to share photos and music by wirelessly "squirting" content to other Zune users. The firm even promoted Zune with the tagline "Welcome to the Social." Problem was the Zune Social was a party no one wanted to attend. The late-arriving Zune garnered a market share of just 3 percent, and users remained hard pressed to find buddies to leverage these neat social features. A cool idea does not make a network effect happen.
5.1 Key Take Aways
Moore's Law applies to the semiconductor industry. The widely accepted managerial interpretation of Moore's Law states that for the same money, roughly eighteen months from now you should be able to purchase computer chips that are twice as fast or store twice as much information. Or over that same time period, chips with the speed or storage of today's chips should cost half as much as they do now. Nonchip-based technology also advances rapidly. Disk drive storage doubles roughly every twelve months, while equipment to speed transmissions over fiber-optic lines has doubled every nine months. While these numbers are rough approximations, the price/performance curve of these technologies continues to advance exponentially. These trends influence inventory value, depreciation accounting, employee training, and other managerial functions. They also help improve productivity and keep interest rates low. From a strategic perspective, these trends suggest that what is impossible from a cost or performance perspective today may be possible in the future. This fact provides an opportunity to those who recognize and can capitalize on the capabilities of new technology. As technology advances, new industries, business models, and products are created, while established firms and ways of doing business can be destroyed. Managers must regularly study trends and trajectory in technology to recognize opportunity and avoid disruption.
second wave
Moore's Law kicked in during the 1970s for the second wave, and minicomputers were a hit. These were refrigerator-sized computers that were as speedy as or speedier than the prior generation of mainframes, yet were affordable by work groups, factories, and smaller organizations.
5.3 Key Take Aways
Most modern supercomputers use massive sets of microprocessors working in parallel. The microprocessors used in most modern supercomputers are often the same commodity chips that can be found in conventional PCs and servers. Moore's Law means that businesses as diverse as financial services firms, industrial manufacturers, consumer goods firms, and film studios can now afford access to supercomputers. Grid computing software uses existing computer hardware to work together and mimic a massively parallel supercomputer. Using existing hardware for a grid can save a firm the millions of dollars it might otherwise cost to buy a conventional supercomputer, further bringing massive computing capabilities to organizations that would otherwise never benefit from this kind of power. Massively parallel computing also enables the vast server farms that power online businesses like Google and Facebook, and which create new computing models, like software as a service (SaaS) and cloud computing. The characteristics of problems best suited for solving via multicore systems, parallel supercomputers, or grid computers are those that can be divided up so that multiple calculating components can simultaneously work on a portion of the problem. Problems that are linear—where one part must be solved before moving to the next and the next—may have difficulty benefiting from these kinds of "divide and conquer" computing. Fortunately many problems such as financial risk modeling, animation, manufacturing simulation, and gene analysis are all suited for parallel systems.
6.5 Competing When Network Effects Matter - Key Takeaways
Moving early matters in network markets—firms that move early can often use that time to establish a lead in users, switching costs, and complementary products that can be difficult for rivals to match. Additional factors that can help a firm establish a network effects lead include subsidizing adoption; leveraging viral marketing, creating alliances to promote a product or to increase a service's user base; redefining the market to appeal to more users; leveraging unique distribution channels to reach new customers; seeding the market with complements; encouraging the development of complements; and maintaining backward compatibility. Established firms may try to make it difficult for rivals to gain compatibility with their users, standards, or product complements. Large firms may also create uncertainty among those considering adoption of a rival by preannouncing competing products.
Chapter 6: Understanding Network Effects; 6.1 Key Takeaways
Network effects are among the most powerful strategic resources that can be created by technology-based innovation. Many category-dominating organizations and technologies, including Microsoft, Apple, NASDAQ, eBay, Facebook, and Visa, owe their success to network effects. Network effects are also behind the establishment of most standards, including Blu-ray, Wi-Fi, and Bluetooth.
Two-Sided Market
Network markets comprised of two distinct categories of participant. -Both need to deliver value for the network to function
How different are these markets?
Network markets experience early, fierce competition caused by positive-feedback loop inherent in network effects. Firms are aggressive in the early stages because once a leader becomes clear, new adopters begin to favor the leading product over rivals and Tips the market in favor of one dominant firm or standard. Markets exhibit monopolistic tendencies. One firm dominates all rivals.
Frenemies
One who pretends to be a friend but is actually an enemy blend of friend and enemy
Social Network
Online community that allows users to establish a personal profile and communicate with others Key features: -Detailed personal profiles -Affiliations with groups, such as alumni, employers, hobbies, fans, health conditions) -Affiliations with individuals (e.g., specific "friends") -Private messaging and public discussions -Media sharing (text, photos, video) -Discovery-fueling feeds of recent activity among members (e.g., status changes, new postings, photos, applications installed) -The ability to install and use third-party applications tailored to the service (games, media viewers, survey tools, etc.), many of which are also social and allow others to interact
Blogs
Online journal entries usually presented in reverse chronological order. Corporations use blogs to distribute ideas and gather feedback from the public. Key uses: Share ideas, obtain feedback, mobilize a community Providers: Blogger (Google),WordPress, Tumblr
The New Marketing Lexicon
Owned Media Paid Media Earned Media Inbound Marketing
Strategic Positioning
Performing different activities than rivals, or the same activities in a different way
Long Tail
Phenomenon whereby firms can make money by offering a near limitless selection of content and products
Computing Hardware
Physical components of information technology, which includes the computer and its peripherals - Storage devices - Input devices - Output devices
Prediction Markets
Polling a diverse crowd and aggregating opinions in order to forecast of an eventual outcome The crowd isn't always right, but in many cases where topics are complex, problems are large, and outcomes are uncertain, a large, diverse group may bring collective insight to problem solving that one smart guy or a professional committee lacks. One technique for leveraging the wisdom of crowds is a prediction market, where a diverse crowd is polled and opinions aggregated to form a forecast of an eventual outcome. The concept is not new. The stock market is arguably a prediction market, with a stock price representing collective assessment of the discounted value of a firm's future earnings. But Internet technologies are allowing companies to set up prediction markets for exploring all sorts of problems.
Persistence
Posts are maintained indefinitely at locations available at permanent links
Persistence (Blog KF)
Posts are maintained indefinitely at locations available at permanent links
Tags
Posts are often classified under an organized tagging scheme
Tags (Blog KF)
Posts are often classified under an organized tagging scheme
7.6 Other Key Web 2.0 Terms and Concepts - Key Takeaways
RSS fosters the rapid sharing and scanning of information, including updates from Web 2.0 services such as blogs, wikis, and social networks. RSS feeds can be received via Web browsers, e-mail, cell phones, and special RSS readers. Folksonomies allow users to collaboratively tag and curate online media, making it easy for others to find useful content. Since folksonomies are created by users themselves, they are often more easily understood and embraced than classification schemes imposed by site owners. Mash-ups promote the useful combination of different Web services, such as maps and other information feeds. Mash-up authors leverage technologies such as APIs and XML to combine seemingly unrelated data sources and services in new and novel ways. Location-based services are increasingly combining geolocated data with social media. Users can now quickly see related social media surrounding an area, even overlaying this data on top of maps and images through a phone's camera lens. Sites like Foursquare are morphing into loyalty and customer-rewards programs. While users are largely in control of sharing location data, some fear privacy and security issues from oversharing. Virtual worlds allow users to interact with and within a computer-generated alternate reality. Internet media is increasingly becoming "richer," leveraging audio, video, and animation. Organizations and users are creating and distributing rich media online, with interesting content spreading virally.
Leverage Viral Promotion
Rapid spread of information about a product or service, for benefit it should be a positive message and it usually has no cost associated
Viral Promotion
Rapid spread of information about a product or service, for benefit it should be a positive message and it usually has no cost associated
Comment Threads
Readers can comment posts and this is a list of those comments
Comment Threads (Blog KF)
Readers can comment posts and this is a list of those comments
Automatic Notification of Updates
Real time notifications of changes made to the wiki
Automatic Notification of Updates (Wikis KF)
Real time notifications of changes made to the wiki
Seeking the Blue Ocean Strategy
Reggie Fils-Aimé, the President of Nintendo of America, describes the Wii Strategy as a Blue Ocean effort. The concept of blue ocean strategy was popularized by European Institute of Business Administration (INSEAD) professors W. Chan Kim and Renée Mauborgne (authors of a book with the same title). The idea—instead of competing in blood-red waters where the sharks of highly competitive firms vie for every available market scrap, firms should seek the blue waters of uncontested, new market spaces. For Nintendo, the granny gamers, moms, and partygoers who flocked to the Wii represented an undiscovered feast in the Blue Ocean. Talk about new markets! Consider that the best-selling video game at the start of 2009 was Wii Fit—a genre-busting title that comes with a scale so you can weigh yourself each time you play! That's a far cry from Grand Theft Auto IV, the title ranking fifth in 2008 sales, and trailing four Wii-only exclusives. Blue ocean strategy often works best when combined with strategic positioning. If an early mover into a blue ocean can use this lead to create defensible assets for sustainable advantage, late moving rivals may find markets unresponsive to their presence.
Social Media
Relatively new, sites like youtube, facebook twitter are preferred communication tools serves as a catalyst for change Improves
Drones
Remote controlled products that are being used for tasks like photograph and deliveries. Impacted by the expansion of cheap processors and softwares
Disintermediation
Removal of a company from a firm's distribution channel, it collapses the path between supplier and customer
The "three Rs": representation, responsibility, and respect
Representation. Employees need clear and explicit guidelines on expectations for social media engagement. Are they empowered to speak on behalf of the firm? If they do, it is critical that employees transparently disclose this to avoid legal action. U.S. Federal Trade Commission rules require disclosure of relationships that may influence online testimonial or endorsement. On top of this, many industries have additional compliance requirements (e.g., governing privacy in the health and insurance fields, retention of correspondence and disclosure for financial services firms). Firms may also want to provide guidelines on initiating and conducting dialogue, when to respond online, and how to escalate issues within the organization. Responsibility. Employees need to take responsibility for their online actions. Firms must set explicit expectations for disclosure, confidentiality and security, and provide examples of engagement done right, as well as what is unacceptable. An effective social voice is based on trust, so accuracy, transparency, and accountability must be emphasized. Consequences for violations should be clear. Respect. Best Buy's policy for its Twelpforce explicitly states participants must "honor our differences" and "act ethically and responsibly." Many employees can use the reminder. Sure customer service is a tough task and every rep has a story about an unreasonable client. But there's a difference between letting off steam around the water cooler and venting online. Virgin Atlantic fired thirteen of the airline's staffers after they posted passenger insults and inappropriate inside jokes on Facebook. Policies also need to have teeth. Remember, a fourth "R" is at stake—reputation (both the firm's and the employee's). Violators should know the consequences of breaking firm rules and policies should be backed by action. Best Buy's policy simply states, "Just in case you are forgetful or ignore the guidelines above, here's what could happen. You could get fired (and it's embarrassing to lose your job for something that's so easily avoided)."
First Sale Doctrine
Ruling that states a firm can distribute physical copies of legally acquired copyright protected products
Solid Slate Electronics
Semiconductor based devices
Creating the team (SMART)
Social media is an interdisciplinary practice, and the team should include professionals experienced in: -Technology -Marketing -Public relations -Customer service -Law -Human resources
Responsibilities and Policy Setting (SMART)
Social media policies revolve around three Rs: Representation, Responsibility, Respect. Security training is a vital component of establishing social media policy. Creating sock puppets to astroturf violates FTC rules and can result in prosecution.
Engage & Respond: The "four Ms"
Social media provides four Ms of engagement: 1) Megaphone to send out messages from the firm 2) Magnet to attract inbound communication 3) Monitoring and 4) Mediation - Paying attention to what is happening online and selectively engage conversations when appropriate Engagement can be public or private. megaphone -> outbound communication; magnet -> drawing communities inward for conversation monitoring and mediation of existing conversations. This dialogue can happen privately (private messaging is supported on most services) or can occur very publicly (with the intention to reach a wide audience). Understanding when, where, and how to engage and respond online requires a deft and experienced hand.
Data Management System
Software for creating, maintaining and manipulating data
Application Server
Software that houses and serves business logic for use (and reuse) by multiple applications.
Application Server
Software that houses and serves business logic for use (and reuse) by multiple applications.
Firmware
Software that is permanently stored in a chip. The BIOS on a motherboard is an example of firmware.
Volatile Memory
Storage (such as RAM chips) that is wiped clean when power is cut off from a device.
Nonvolatile Memory
Storage that retains data even when powered down (such as flash memory, hard disk, or DVD storage).
Alliances and Partnerships
Strategic relationships businesses may utilize to increase their sales, mutually beneficial
Form Alliances and Partnerships
Strategic relationships businesses may utilize to increase their sales, mutually beneficial
Netflix
Streaming service, widely known for revolutionizing streaming. Major entertainment force.
Technology in Africa
Sub-saharan Africa is implementing fast and cheap tech as an economic boost. 70% of the region have mobile connection, many of the nations of the region are the fastest growing economies in the world. Many major tech firms like Google, IBM and Microsoft run operations in this region
When Even Free Isn't Good Enough
Subsidizing adoption after a rival has achieved dominance can be an uphill battle, and sometimes even offering a service for free isn't enough to combat the dominant firm. When Yahoo! introduced a U.S. auction service to compete with eBay, it initially didn't charge sellers at all (sellers typically pay eBay a small percentage of each completed auction). The hope was that with the elimination of seller fees, enough sellers would jump from eBay to Yahoo! helping the late-mover catch up in the network effect game. But eBay sellers were reluctant to leave for two reasons. First, there weren't enough buyers on Yahoo! to match the high bids they earned on much-larger eBay. Some savvy sellers played an arbitrage game where they'd buy items on Yahoo!'s auction service at lower prices and resell them on eBay, where more users bid prices higher. Second, any established seller leaving eBay would give up their valuable "seller ratings," and would need to build their Yahoo! reputation from scratch. Seller ratings represent a critical switching cost, as many users view a high rating as a method for reducing the risk of getting scammed or receiving lower-quality goods. Auctions work best for differentiated goods. While Amazon has had some success in peeling away eBay sellers who provide commodity products (a real danger as eBay increasingly relies on fixed-price sales), eBay's dominant share of the online auction market still towers over all rivals. While there's no magic in the servers used to create eBay, the early use of technology allowed the firm to create both network effects and switching costs—a dual strategic advantage that has given it a hammerlock on auctions even as others have attempted to mimic its service and undercut its pricing model.
Immediate and Unfiltered Publication
The ability to reach the public without limits on publication size and without having posts filtered, edited, or cut by the mainstream media
Supply Chain Management
Systems that can help a firm manage aspects of its value chain, from the flow of raw materials into the firm, through delivery of finished products and services at the point-of-consumption.
Supply Chain Management (SCM)
Systems that can help a firm manage aspects of its value chain, from the flow of raw materials into the firm, through delivery of finished products and services at the point-of-consumption.
Business Intelligence (BI)
Systems that use data created by other systems to provide reporting and analysis for organizational decision making.
Customer Relationship Management (CRM)
Systems used to support customer-related sales and marketing activities.
Crowdsourcing
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 Leveraged by several public markets: -For innovation -As an alternative to standard means of production -Nine of the world's top ten brands have engaged in some form of crowdsourcing. Not all crowdsourcing is financially motivated. Some benefit by helping to create a better service. The power of Web 2.0 also offers several examples of the democratization of production and innovation. Need a problem solved? Offer it up to the crowd and see if any of their wisdom offers a decent result. This phenomenon, known as crowdsourcing, has been defined by Jeff Howe, founder of the blog crowdsourcing.com and an associate editor at Wired, as "the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call".
one value for New, incompatible entrant
Technological functionality
Danger of Technology Reliance
Technology has high rate of new products and competitors. This makes it unreliable as a source of competitive advantage.
Technology in Finance
Technology is well suited for IPO markets and Mergers and Acquisitions. Can make certain capital obsolete. Important to lending and evaluating role of tech in investment portfolios
The Positive Feedback Loop of Network Effects
The biggest networks become even bigger IM is considered a one-sided market, where the value-creating, positive-feedback loop of network effects comes mostly from same-side benefits from a single group (IM members who attract other IM members who want to communicate with them). Video game consoles, however, are considered a two-sided network, where significant benefits come from two distinct classes of users that add value from cross-side benefits by attracting their opposite group. In the game console market, more users of a console attract more developers who write more software for that console, and that attracts more users. Game availability is the main reason the Sony PlayStation 2 dominated over the original Xbox. And app availability is one of the most significant advantages the iPhone offers over competitive hardware. It is possible that a network may have both same-side and cross-side benefits. Xbox 360 benefits from cross-side benefits in that more users of that console attract more developers writing more software titles and vice versa. However, the Xbox Live network that allows users to play against each other has same-side benefits. If your buddies use Xbox Live and you want to play against them, you're more likely to buy an Xbox.
Switching Cost
The cost incurred when moving from one product to another -Directly related to staying power. -Strengthen the value of network effects as a strategic asset. -Increases with the higher friction available to prevent users from migrating to a rival. The higher the value of the user's overall investment, the more they're likely to consider the staying power of any offering before choosing to adopt it. Similarly, the more a user has invested in a product, the less likely he or she is to leave. Other names for switching costs: -(particularly Web sites) as being "sticky" or creating "friction" -"lock-in" -"barnacles" (that are tightly anchored to the firm) and not "butterflies" (that flutter away to rivals)
Qwikster
The dark mark on Netflix that resulted in a very temporary split of the streaming and DVD by mail services, it resulted in a loss of thousands of customers
Total Cost of Ownership (TCO)
The economic measure of the full cost of owning a product
Operations
The organizational activities that are required to produce goods or services. Operations activities can involve the development, execution, control, maintenance, and improvement of an organization's service and manufacturing procedures.
Random Access Memory (RAM)
The fast, chip-based volatile storage in a computing device.
atoms to bits
The idea that many media products are sold in containers (physical products, or atoms) for bits (the ones and zeros that make up a video file, song, or layout of a book). As the Internet offers fast wireless delivery to TVs, music players, book readers, and other devices, the "atoms" of the container aren't necessary. Physical inventory is eliminated, offering great cost savings.
Staying Power
The long term viability of a product or service
Staying Power (NE Source)
The long term viability of a product or service. Users don't want to buy a product or sign up for a service that's likely to go away, and a number of factors can halt the availability of an effort: a firm could bankrupt or fail to attract a critical mass of user support, or a rival may successfully invade its market and draw away current customers. Networks with greater numbers of users suggest a stronger staying power. The higher the value of the user's overall investment, the more they're likely to consider the staying power of any offering before choosing to adopt it. Similarly, the more a user has invested in a product, the less likely he or she is to leave.
same-side exchange benefits Example
The network effects derived from IM users attracting more IM users as being same-side exchange benefits (benefits derived by interaction among members of a single class of participant) While Economists would call IM a one-sided market (a market that derives most of its value from a single class of users)
4.3 Key Take Aways
The shift from atoms to bits is impacting all media industries, particularly those relying on print, video, and music content. Content creators, middlemen, retailers, consumers, and consumer electronics firms are all impacted. Netflix's shift to a streaming model (from atoms to bits) is limited by access to content and in methods to get this content to televisions. Windowing and other licensing issues limit available content, and inconsistencies in licensing rates make profitable content acquisitions a challenge.
blogosphere
The voice of the blogosphere can wield significant influence. Examples include leading the charge for Dan Rather's resignation and prompting the design of a new insulin pump. In an example of what can happen when a firm ignores social media, consider the flare-up Ingersoll Rand faced when the online community exposed a design flaw in its Kryptonite bike lock.
Attribution
The wiki identifies who made the changes to the information on the page
Attribution (Wikis KF)
The wiki identifies who made the changes to the information on the page
Monopoly
There are many buyers but only one dominant seller. winner-takes-all or winner-takes-most
Monitoring: Online Reputation Management
Tracking and responding to online mentions of a product, organization or an individual Many tools exist for monitoring social media mentions of an organization, brands, competitors, and executives. Social media are easy to adopt and potentially easy to abuse. Concern over managing a firm's online image has led to the rise of an industry known as online reputation management. Firms specializing in this field will track a client firm's name, brand, executives' names, or other keywords, reporting online activity and whether sentiment trends toward the positive or negative. But social media monitoring is about more than about managing one's reputation; it also provides critical competitive intelligence, it can surface customer support issues, and it can uncover opportunities for innovation and improvement. Firms that are quick to lament the very public conversations about their brands happening online need to embrace social media as an opportunity to learn more.
Online Reputation Management
Tracking and responding to online mentions of a product, organization, or individual
Point of Sale System (POS)
Transaction processing system that captures customer purchase information
Flash Memory
Type of nonvolatile memory that can be erased electronically and rewritten.
6.4 How Are These Markets Different? - Key Takeaways
Unseating a firm that dominates with network effects can be extremely difficult, especially if the newcomer is not compatible with the established leader. Newcomers will find their technology will need to be so good that it must leapfrog not only the value of the established firm's tech, but also the perceived stability of the dominant firm, the exchange benefits provided by the existing user base, and the benefits from any product complements. For evidence, just look at how difficult it's been for rivals to unseat the dominance of Windows. Because of this, network effects might limit the number of rivals that challenge a dominant firm. But the establishment of a dominant standard may actually encourage innovation within the standard, since firms producing complements for the leader have faith the leader will have staying power in the market.
Reverse Chronology
When posts are listed in reverse order of creation, meaning new content appears at the top
Reverse Chronology (Blog KF)
When posts are listed in reverse order of creation, meaning new content appears at the top
what you see is what you get (WYSIWYG) editing
Want to add to or edit a wiki entry? On most sites you just click the "Edit" link. Wikis support what you see is what you get (WYSIWYG) editing that, while not as robust as traditional word processors, is still easy enough for most users to grasp without training or knowledge of arcane code or markup language. Users can make changes to existing content and can easily create new pages or articles and link them to other pages in the wiki. Wikis also provide a version history. Click the "History" link on Wikipedia, for example, and you can see when edits were made and by whom. This feature allows the community to roll back a wiki to a prior page, in the event that someone accidentally deletes key info, or intentionally defaces a page.
Web 1.0 vs Web 2.0 / Web 1.0 versus Web 2.0
Web 1.0 → Web 2.0 DoubleClick →Google AdSense Ofoto →Flickr Akamai →BitTorrent mp3.com →Napster Britannica Online →Wikipedia personal Web sites →blogging evite →upcoming.org and Eventful domain name speculation →search engine optimization page views →cost per click screen scraping →Web services publishing →participation content management systems →wikis directories (taxonomy) →tagging ("folksonomy") stickiness →syndication instant messaging →Twitter Monster.com →LinkedIn
Convergence
When two or more markets, once separate, begin to offer similar features and capabilities
social media or user-generated content sites
Web-based efforts that foster peer production are often referred to as social media or user-generated content sites.
Wikis
Websites that can be modified by anyone directly within a web browser that serves as a shared knowledge repository
Wikis (Social Media Tool)
Websites that can be modified by anyone directly within a web browser that serves as a shared knowledge repository. Acts as a collective corporate memory that is vital for sharing skills, learning, and preserving expertise. Users can make changes to existing content and easily create new content. Key uses: -Create a common knowledge base -Firms monitor their online reputations in blog posts, Twitter tweets, and wikis. -Allow organizations to leverage input from their customers and partners. Providers: Socialtext, PBWorks, Jive, Google Sites, MS SharePoint, Atlassian, Apple OS X Server
Seed the Market
When Sony launched the PS3, it subsidized each console by selling at a price estimated at three hundred dollars below unit cost (Null, 2008). Subsidizing consoles is a common practice in the video game industry—game player manufacturers usually make most of their money through royalties paid by game developers. But Sony's subsidy had an additional benefit for the firm—it helped sneak a Blu-ray player into every home buying a PS3 (Sony was backing the Blu-ray standard over the rival HD DVD effort). Since Sony is also a movie studio and manufacturer of DVD players and other consumer electronics, it had a particularly strong set of assets to leverage to encourage the adoption of Blu-ray over rival HD DVD. Giving away products for half of a two-sided market is an extreme example of this kind of behavior, but it's often used. In two-sided markets, you charge the one who will pay. Adobe gives away the Acrobat reader to build a market for the sale of software that creates Acrobat files. Firms with Yellow Page directories give away countless copies of their products, delivered straight to your home, in order to create a market for selling advertising. And Google does much the same by providing free, ad-supported search.
critical competitive asset
When a firm has an imitation-resistant value chain—one that's tough for rivals to copy while gaining similar benefits
Cross-Side Exchange Benefit Example
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)
Congestion Effect
When an increasing number 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
Envelopment (Expand)
When one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering
Free Rider Problem
When others take advantage of a user or service without providing any sort of reciprocal benefit. AKA users benefit from a service while offering no value in exchange Another issue—many Twitter users rarely visit the site. Most active users post and read tweets using one of many—often free—applications provided by third parties, such as Seesmic, TweetDeck, and Twhirl. This happens because Twitter made its data available for free to other developers via API (application programming interface). Exposing data can be a good move as it spawned an ecosystem of over one hundred thousand complementary third-party products and services that enhance Twitter's reach and usefulness (generating network effects from complementary offerings similar to other "platforms" like Windows, iPhone, and Facebook). There are potential downsides to such openness. If users don't visit Twitter.com, that lessens the impact of any ads running on the site. This creates what is known as the "free rider problem," where users benefit from a service while offering no value in exchange. Encouraging software and service partners to accept ads for a percentage of the cut could lessen the free rider problem.
7.5 Twitter and the Rise of Microblogging - Key Takeaways
While many public and private microblogging services exist, Twitter remains by far the dominant service. Unlike status updates found on services like Facebook and LinkedIn, Twitter's default supports asymmetric communication, where someone can follow updates without first getting their approval. This function makes Twitter a good choice for anyone cultivating a following—authors, celebrities, organizations, and brand promoters. You don't need to tweet to get value. Many Twitter users follow friends, firms, celebrities, and thought leaders, quickly gaining access to trending topics. Twitter hash tags (keywords preceded by the # character) are used to organize "tweets" on a given topic. Users can search on hash tags, and many third-party applications allow for Tweets to be organized and displayed by tag. Firms are leveraging Twitter in a variety of ways, including: promotion, customer response, gathering feedback, and time-sensitive communication. Like other forms of social media, Twitter can serve as a hothouse that attracts opinion and forces organizational transparency and accountability. Activists have leveraged the service worldwide, and it has also served as an early warning mechanism in disasters, terror, and other events. Despite its rapid growth and impact, significant questions remain regarding the firm's durability, revenue prospects, and enduring appeal to initial users. Twitter makes its data available to third parties via an API (application programming interface). The API has helped a rich ecosystem of over seventy thousand Twitter-supporting products and services emerge. But by making the Twitter stream available to third parties, Twitter may suffer from the free rider problem where others firms benefit from Twitter's service without providing much benefit back to Twitter itself. New ad models may provide a way to distribute revenue-generating content through these services. Twitter has also begun acquiring firms that compete with other players in its ecosystem.
7.3 Wikis - Key Take Aways
Wikis can be powerful tools for many-to-many content collaboration, and can be ideal for creating resources that benefit from the input of many such as encyclopedia entries, meeting agendas, and project status documents. The greater the number of wiki users, the more likely the information contained in the wiki will be accurate and grow in value. Wikis can be public or private. The availability of free or low-cost wiki tools can create a knowledge clearinghouse on topics, firms, products, and even individuals. Organizations can seek to harness the collective intelligence (wisdom of crowds) of online communities. The openness of wikis also acts as a mechanism for promoting organizational transparency and accountability.
pure play
a business that operates on the internet only without a physical store
Coopetition
a blend of cooperation and competition that tries to reap the best of both worlds
information system (IS)
a group of components that interact to produce information; includes data used or created by the system, as well as the procedures and the people who interact with the system, hardware and software
Price Elasticity
a measure of the sensitivity of demand to changes in price
price elasticity
a measure of the sensitivity of demand to changes in price, tech products are highly price elastic, meaning consumers buy more products as they become cheaper
Enterprise Resource Planning
a software package that integrates the many functions of a business
Enterprise Resource Planning (ERP)
a software package that integrates the many functions of a business
semiconductors
a substance such as silicon dioxide used inside most computer chips that is capable of enabling as well as inhibiting the flow of electricity
The Hunt (Google)
a task-oriented expedition to collect information that will drive a specific action.
Folksonomies (sometimes referred to as social tagging)
are keyword-based classification systems created by user communities as they generate and review content. (The label is meant to refer to a people-powered taxonomy.) Bookmarking site Del.icio.us, photo-sharing site Flickr (both owned by Yahoo!), and Twitter's hash tags all make heavy use of folksonomies.
growing firm advantages
bargaining power with its suppliers or buyers, The scale of technology investment required to run a business, grow in size
The "Smart" Crowd
diverse, decentralized, offer a collective verdict, independent The "Smart" Crowd Criteria: In an article in the McKinsey Quarterly, Surowiecki outlined several criteria necessary for a crowd to be "smart". The crowd must 1) be diverse, so that participants are bringing different pieces of information to the table, 2) be decentralized, so that no one at the top is dictating the crowd's answer, 3) offer a collective verdict that summarizes participant opinions, 4) be independent, so that each focuses on information rather than the opinions of others.
processors
electronics stuff that's made out of silicon
three value-adding sources examples
exchange, staying power, and complementary benefits—often work together to reinforce one another in a way that makes the network effect even stronger. When users exchanging information attract more users, they can also attract firms offering complementary products. When developers of complementary products invest time writing software—and users install, learn, and customize these products—switching costs are created that enhance the staying power of a given network. From a strategist's perspective this can be great news for dominant firms in markets where network effects exist. The larger your network, the more difficult it becomes for rivals to challenge your leadership position.
Sources of Network Effects / three value-adding sources
exchange, staying power, complementary benefits
sustainable competitive advantage
financial performance that consistently outperforms their industry peers.
Higher inventory turns mean....
firm is selling product faster, so it collects money quicker than its rivals do.
Sources of Switching Costs
learning costs, information and data, financial commitment, contractual commitments, search costs, loyalty programs
resource-based view of competitive advantage
it must control a set of exploitable resources that have four critical characteristics. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable (tough to imitate), and (4) nonsubstitutable. Having all four characteristics is key
multicore microprocessors
made by putting two or more lower power processor cores (think of a core as the calculating part of a microprocessor) on a single chip.
server farms
massive network of computer servers running software to coordinate their collective use
solid state electronics
meaning no moving parts, so they're less likely to fail, and they draw less power.
volatile memory
meaning that when the power goes out, all is lost that wasn't saved to nonvolatile memory
memristors
memory resistors, to improve on conventional transistors and speed the transition to 3-D chips, yielding significant improvement over 2-D offerings
nonvolatile memory
more permanent storage media like a hard disk or flash memory
virtuous adoption cycle
occurs when network effects exist that make a product or service more attractive (increases benefits, reduces costs) as the adopter base grows.
disintermediation
removing an organization from a firm's distribution channel
value chain
set of interrelated activities that bring products or services to market. There are five primary components of the value chain and four supporting components.
EDI (Electronic Data Interchange)
set of standards for exchanging information between computer applications
3 forces threatening to slow down the Moore's Law
size, heat, and power
stacked or three-dimensional semiconductors
slice a flat chip into pieces, then reconnect the pieces vertically, making a sort of "silicon sandwich." The chips are both faster and cooler since electrons travel shorter distances.
wave three
the 1980s brought wave three in the form of PCs, and by the end of the decade nearly every white-collar worker in America had a fast and cheap computer on their desk.
Searchability
the ability to find content
return on investment (ROI)
the amount earned from an expenditure
social graph
the connections between individuals and organizations.
price transparency
the degree to which complete information is available
distribution channels
the path through which products or services get to customers
Cloud Computing
the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.
Software
the programs and other operating information used by a computer.
Churn Rate
the rate at which customers leave a product or service
churn rate
the rate at which customers leave a product or service. low churn is usually key to profitability because it costs more to acquire a customer than to keep one
Operating System (OS)
the software that supports a computer's basic functions, such as scheduling tasks, executing applications, and controlling peripherals.
operating system
the software that supports a computer's basic functions, such as scheduling tasks, executing applications, and controlling peripherals.
wave five
there computers are so fast and so inexpensive that they have become ubiquitous—woven into products in ways few imagined years before. Silicon is everywhere!
point-of-sale (POS) system
transaction process that captures customer purchase information
Radio Frequency Identification (RFID)
uses electronic tags and labels to identify objects wirelessly over short distances
imitation-resistant value chain
way of doing business that others will struggle to replicate
Vertical Integration
when a single firm owns several layers in its value chain
vertical integration
when a single firm owns several layers in its value chain
Switching costs
when consumers incur an expense to move from one product or service to another
fast follower problem
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.
scale economies
when they are able to leverage the cost of an investment across increasing units of production
