MIS Exam 1 review questions

What is viral marketing? How can companies leverage social media to build a brand inexpensively?

leveraging consumers to promote a product or service. increase public awareness early on through social sharing

What are switching costs? What are the sources of switching costs?

costs incurred by consumers when switching from one product to another. sources: learning costs, information and data, financial commitment, contractual commitments, search costs, loyalty programs

Is Netflix's recommendation software successful? Understand how Netflix built its recommendation software.

data is collected when customers rate movies they've seen and this data on likes and dislikes is fed into a proprietary recommendation system called Cinematch

What should managers always ask before launching an innovative (but possibly disruptive) product?

how big is this market how much of an investment is required will existing products suffer will existing business model change

Understand how the Web works. What is HTTP? What is HTML?

HTTP = Hyper Text Transfer Protocol, Sent to request info and is sent back with it HTML = Hyper Text Markup Language, Provides content for the web page

What is Apple's "Digital Hub" strategy? What motivates this strategy?

The digital hub strategy was to make the Mac an essential piece of hardware to integrate Apple peripherals such as the iPod. It was motivated by the smashing success of the iPod.

How does Uber leverage data in its service? What aspects of the firm's operations are improved through data analytics? Does this provide the firm with sustainable competitive advantage? Why or why not?

Uber leverages data by expanding globally to power the firm's operational model, alert drivers, improve service, set pricing, and even identify possible cities to enter. Yes this provides Uber with sustainable competitive advantage because Uber has a larger user database and they are able to outcompete their competitors by targeting specific user types.

How does Uber ensure rider and passenger quality? As a rider or passenger, how would you feel about these efforts? How does this change the service dynamic compared with traditional cab rides?

allows ratings of passengers and drivers to ensure a feeling of safety

Who are the rivals to the Netflix streaming effort? Do any of these firms have advantages that Netflix lacks? What are these advantages?

amazon, apple, hbo, etc these have better and clear established paths for the living room TV compared to netflix

What is Porter's "five forces"?

power of suppliers, potential new entrants, power of buyers, threat of substitute good or service, rivalry among existing competitors

What are the characteristics of disruptive innovation? Be able to list/identify examples of disruptive innovation and explain why.

technologies that create market shocks and catalyze growth, they come to market with a set of performance attributes that existing customers don't value and over time the performance attributes improve to the point where they invade established markets

What is crowdsourcing? What is its benefit to companies?

the act of taking a job traditionally performed by a designated agent and outsourcing it to an undefined group of people in the form of an open call

What are the key challenges to the sharing economy?

trust, safety, independent contractor concern

What are the challenges for Netflix to move from atoms to bits?

content availability, content acquisition costs, legal and regulatory environment, potential opportunities for revenue and expansion, potential partners, competitors and their motivation

What are the strategies for competing in markets with strong network effect? Be able to list/identify examples on how to implement each of the strategies.

-Encourage complements - Android developer challenge -Viral promotion - Facebook-Leverage bundling - Skype and windows - Redefine market to include customers - Apple smartphones - Subsidize adoption - Uber & Lyft

What is distributed computing? Understand what a client is and what a server is in a distributed computing environment. Understand how client browsers on various machines interact with a company's systems.

A form of communication where systems in different locations communicate and collaborate to complete a task.

What is router? What are the basic functions of router?

A router is a network hardware that allows communication between your local home network. The basic functions are security and issuing unique IP addresses.

What is an IP address? Understand that every device on the Internet needs to be assigned with an IP address.

A value used to identify a device connected to the internet.

Why do certain business entry barriers decrease because of cloud computing?

Barriers to entry decrease with cloud computing because it lowers costs.

Why is iPhone so successful?

Because of protected innovations, buyer loyalty/lock-in, creation of a hardware ecosystem and economies of scale

What are the major functions performed by a content delivery network (CDN) provider?

CDN is a network of servers linked together with the goal of delivering content as quickly, cheaply, reliably, and securely as possible.

What are the potential benefits of adopting enterprise software?

Cheaper in long run, faster than humans, efficient, and less mistakes

Be able to explain why Facebook acquired Instagram, WhatsApp, and Oculus VR.

Creation of more user data, prevention of rivals, point of entry into new markets

On how to leverage social media platform, what is digital strategy and what is social strategy? Be able to list/identify examples that implement each strategy.

Digital Strategy - Using platform to target customers. Ex: Geico ads Social Strategy - Using platform to improve or increase social relationships while acquiring new customers Ex. Ebay group gifts

What is the difference between desktop application and enterprise application software? Be able to list/identify examples of each type of application software.

Desktop - installed used on a personal computer computing device, typically supporting tasks performed by a single user (safari) Enterprise - address the needs of multiple users throughout an organization or work group (oracle)

What is the social graph? Why is Facebook's social graph considered to be stronger than the social graph created by the sites of its early competitors?

Diagram that illustrates interconnections among people in social networks/ ability to collect, express, and leverage the connections between the site's users. Facebook was much stronger because it did not allow phony accounts, thus all relationships were verified.

Be able to evaluate the effectiveness of different advertisement strategies on Facebook and explain why.

Digital Strategy - Using platform to target customers (Ineffective) Social Strategy - Using platform to improve or increase social relationships while acquiring new customers

What is ERP? What is CRM? What is SCM? Understand what each of these enterprise systems basically does.

ERP - Enterprise Resource Planning/ integrates multiple functions in an organization CRM - Customer Relationship Management/ integrates sales and marketing SCM - Supply Chain Management Software - integrates supplier relations

Understand why Adobe allows the free download of Acrobat Reader and why Indeed.com allows free access by job seekers. Understand how to decide the money side and the subsidy side for a market with two-sided network.

Each side must be analyzed in willingness to pay/price sensitivity & quality/quantity sensitivity.

Is Netflix a friend or foe to the studios? Make a list of reasons why they would "like" Netflix, and why studios might be fearful of the firm.

Enemy to the studio because of direct competitors of films for customers and also friends because they can share their viewer data with Netflix and vice versa

What are the benefits to vendors from offering cloud computing and what are the challenges for vendors to offer cloud computing?

Instantly deploy bug fixes and product enhancementsAccessible to anyone with an Internet connection For SaaS, reduced costs associated with: Development across different platforms, Software piracy, Distribution

How does the market share for desktop operating systems differ from server operating systems?

Linux has a bigger share, Windows loses a large portion of its share, and Mac is completely gone

What are the main factors explaining why firms choose open source products over commercial alternatives?

Low Costs, Scalability, Reliability, Faster time to market (when bundled with hardware)

Understand why a software company (e.g., Microsoft) could potentially generate high profit margin.

Low Marginal costs, potential of bundling, and high switching costs

Be able to list a technology-based company and discuss whether it enjoys sustainable competitive advantage based on the resources it controls. Understand that technology advantage alone will not yield sustainable competitive advantage.

Microsoft Office contains competitive advantage because it can make abundant copies without costs and license their product with a large network

Understand Moore's law is only related to (CPU) processing speed. However, not only processing speed but also communication speed and storage capacity all experience exponential growth over the last 30 years.

Moore's law - chip performance double every year and a half, data storage doubles every year, optical fiber doubles per nine months

What are three biggest strategic moves by Jobs in the technology business

New Chip Architecture - From Motorola to Intel New OS - Mac OSX New Distribution - Classy Brick-and-Mortar stores

Understand why the click-through rates at Facebook are substantially lower than the click-through rates at Google.

People on Facebook are hiking - browsing People on Google are hunting - actively searching for something

What different business models can be built around open source software? Understand the motivations for large incumbents (such as IBM, Google, Oracle) to contribute to the development of open source software.

Providing consultancy/services/ training, promote complementary products, undercut competitors, and dual licensing

Who are the two of the leading ERP vendors? Be able to list the functions of a business that might be impacted by an ERP.

SAP and Oracle Impacted functions -Credit checking, Loan Covenant writing, pricing, etc

What is SaaS? For this service model, what are the resources the cloud vendor will provide/manage? What basic question is it essentially addressing for a cloud user? Know that the cloud user will usually not manage or control the cloud infrastructure, operating systems, and even individual application capabilities, except for limited user-specific configuration settings.

Software as a service refers to software that is made available by a third party online. The vendor provides the software and hardware, essentially managing everything. The basic question it addresses for a cloud user is what service model manages everything for me.

What are the benefits to users from cloud computing? What are the barriers to cloud computing adoption? When you decide if you want to get service from a particular cloud vendor, why should you consider the long-term viability of the cloud vendor?

The benefits from cloud computing are increased efficiency, reduce capital investment, reduce IT maintenance/cost, rapid access to resources/rapid deployment on platforms, and scalability. The barriers are lock-in, security, flexibility/customization, availability/dependability, and total cost ownership. You should consider long-term viability of the cloud vendor because if they go broke or get purchased by a larger company, you want to ensure you will still have your data.

Why did Apple want to switch to new chip architecture for its Mac? What are the pros and cons?

The new chip was more powerful, lighter, could run windows and window apps and thinner. They would have to rework the OS (big expense)

What is the rationale for Apple to open physical stores?

To better focus on customer experience and create a stronger brand identity

What is the Internet? What is the Web? Understand the difference between the two.

Web is HTML pages on the internet The Internet is the massive connection of devices worldwide.

Understand the key reasons explaining Kodak's downfall.

cognitive inertia - not wanting to change their business, CEO failure, strong competitors

What "class" of software does Netflix use to make movie recommendations? Think about Chapter 2: Which key competitive resource does this software "create"? What kinds of benefits does this provide to the firm?How does the long tail effect interact with its recommendation software?

collaborative filtering/Cinematch. timing and technology critical in nurturing assets for competitive advantage. long tail provides vast choice on Netflix

How have the rise of the Internet and the advances in technology impacted the competitive landscape of music CD/ printed book industry?

decreased the market for it

What is "long tail"? How does Netflix benefit from the long tail? Why can't the traditional brick-and-mortar retailers capture the long tail effect?

demand exists even though products aren't popular enough for stores to carry them. company - low cost on shelf space, inventory efficiencies

What advantages does FreshDirect have that insulate the firm from serious competition from start-ups copying its business model?

large collection of data of consumer preferences and also and the control over the specific urban area. Not only this, it spent a lot on its infrastructure throughout that other companies will have a hard time stealing the market

What are the benefits for Netflix to move from atoms to bits?

larger selection, quicker turnaround

What were the impacts of digital camera on the entire camera industry? What was the impact of the iPhone on the digital camera and camera film industries?

reduced demand significanly

What are the major factors contributing to Uber's success?

scheduling, service speed, reliability, increased trust, ease of payment, and car availability.

what is a value chain

set of activities through which a product or service is created and delivered to customers

What is the "resource-based" view of competitive advantage? What are the characteristics of resources that may yield sustainable competitive advantage?

strategic thinking approach suggesting that if a firm is to maintain sustainable competitive advantage, it must control an exploitable resource that has all four: valuable, rare, imperfectly imitable, nonsubstitutable

Understand why established firms sometimes fail to recognize and react to potentially disruptive innovations.

they do not dedicate resources to developing the potential technology since these markets do not look attractive, they do not nurture the needs of a new customer base, creates blindness by an otherwise rational focus on customer demands and financial performance

What is the difference between volatile memory and nonvolatile memory? What is the basic function of central processing unit (CPU)?

volatile memory is storage that is wiped clean when power is cut off from a device, non volatile is storage that retains data when powered down CPU selects instructions, processes them, performs logical functions, and stores operations in memory

What are the three primary sources of value for network effects?

1. Exchange: users can potentially communicate with more people. 2. Staying power: long-term viability. 3. Complementary benefits: products or services that add additional value to the network.

What are the challenges of adopting enterprise software? What are the different types of costs involved with enterprise software adoption? Understand why many firms have failed when attempting large-scale enterprise system integration.

Challenges: Large up-front costs, High Failure rate, and high switching costs Costs: Licensing, Designing, Training Reasons of failure: Unrealistic goals, poor leadership, Poor estimates of resources, and poor communication in designing

What is cloud computing? What are the essential characteristics of cloud computing?

Cloud computing refers to replacing computing resources—of either an organization or individual's hardware or software—with services provided over the Internet.

How does Facebook benefit from strong network effect? How does Microsoft benefit from strong network effect? How does Apple benefit from strong network effect? What role did network effects play in your choice of an operating system, a social network, a word processor, or a mobile phone?

Facebook benefits from strong network effects because of the complementary product developers for apps and viral promotion from their large user base of personal friends. Microsoft can leverage bundling with Skype since Windows is so high presence already. Apple benefits from strong network effects because their OS and features are compatible with only their products and so more people will purchase their products. Network effects plays a role in what I purchase because I am more likely to choose a product that a lot of people I interact with often own so it's more compatible in forms of communication and collaboration.

Why do some collaborative consumption firms choose to take possession of inventory rather than allow the "crowd" to provide it peer-to-peer style?

For some marketplaces, end users simply can't be relied on to consistently manage inventory and logistics. In these cases, successful "collaborative consumption" efforts own inventory to ensure quality and gain more control over the customer experience. Rent the Runway meticulously oversees its dress inventory, packing product for delivery, running a massive in-house garment cleaning effort, and retiring dresses that are noticeably worn. The goal is to ensure that an experience with the firm will bring customers a "Cinderella moment" filled with delight, rather than disappointment

What is open source software?

Free software where anyone can modify the code.

What is an ISP? What is peering? Understand that carriers usually do not charge one another for peering. Instead, "the money is made" in the ISP business by charging the end points in a network—the customer organizations and end users that an ISP connects to the Internet.

ISP - internet service provider Peering is a process by which two internet networks connect and exchange traffic. It is used because it is cheaper and sometimes easier to control traffic flows.

What is IaaS? For this service model, what are the resources the cloud vendor will provide/manage and what are the resources the cloud user will have a control? What basic question is it essentially addressing for a cloud user? Know that Amazon is the pioneer to officially offer IaaS to the public.

Infrastructure as a service offers an organization an alternative to buying its own physical hardware. The cloud vendor usually manages the infrastructure whereas the cloud user can select their own operating system, development environments, underlying applications, and other software packages. The basic question it addresses for a cloud user is which model provides the hardware service for the user to manage everything else.

Who are the major players in the CPU market? Understand the key strategies played by each of these firms.

Intel and ARM, some key strategies of intel are bundling and developing integrated platform solutions which are less expensive and therefore more attractive to consumers

What is an operating system? What are the basic functions of operating system? Understand the value of an operating system is determined both by its own functionality and the availability of the applications running on it.

Operating System is software that controls the computer hardware and establishes standards for developing and executing applications. Basic functions: -Arbitration - Manages tasks and allocates resources -Abstraction - interface hardware and applications

What is PaaS? For this service model, what are the resources the cloud vendor will provide/manage and what are the resources the cloud user will have a control? What basic question is it essentially addressing for a cloud user? Know that Windows Azure and Google app engine are all examples of PaaS vendor.

Platform as a service delivers tools so an organization can develop, test, and deploy software in the cloud. The vendor provides the platform such as hardware, operating system, database, and other software. The user controls the applications they build using the vendor resources. The basic question it addresses for a cloud user is where can I develop/store my applications.

What is TCP and what are the basic functions of TCP? What is IP and what are the basic functions of IP? Understand how TCP and IP work together to enable data communications between one computer to another.

TCP (transmission control protocol): Works at both ends of most Internet communication to ensure a perfect copy of a message is sent. IP (Internet protocol): Routing protocol that is in charge of forwarding packets on the Internet.

Suppose now your company wants to adopt an enterprise software application (e.g., CRM, ERP) and you have two options -buying some packaged enterprise software or using software-as-a-service model (i.e. getting on-demand enterprise software). What are the benefits of buying the packaged one and what are the benefits of getting the on-demand one? Understand how the size of your organization affects your choice.

There are pros and cons to adapting cloud service: 1) Cloud Computing: More flexible, cheaper without buying expensive hardware and servers which is more scalable because you can increase at any time with more flexibility and access 2) Packaged ERP: More customization for the company with no continuous costs and integration of different sectors. A smaller company will tend to rent cloud service because there are less needs with less number of customers that can be bought every month compared to large companies that will invest money to stop paying very high costs every month.

Is Uber good for the economy or bad?

Uber is good for the economy because the high level of profit creates jobs, increases tax revenue for the government, and creates competition in a market sect which was largely controlled by few for many years.

What is URL? Be able to identify/label the protocol name, host name, domain name, path, and file name for a given URL.

Uniform Resource Locator (URL): identify resources on the Internet along with the application protocol need to retrieve it application transfer protocol: http host name: www domain name: website path: /something file name: /filesomething

What are the players in the ecosystem built around iPhone/iPad? How does each player benefit from this ecosystem? Do we see strong network effects in this ecosystem and why?

Users - Free OS and enjoyment of free app storeContent providers - Strong platform to provide apps, plenty of users App store - bundled with Apple products, takes a % of app sales Ipad - able leverage bundles with the App store Yes, as the Users increase, it brings more content providers, thus more people buy Apple products to enjoy content, repeating the cycle

Once a firm can detect disruptive technologies, what techniques can it use to nurture and develop these technologies?

build a portfolio of options on emerging technologies, investing in firms, startups, or internal efforts. options give the firm the right to continue and increase funding as a technology shows promise. if a firm has a stake in a startup it may consider acquiring the firm. encourage new market and technology development

What is blade-razor strategy? Be able to list/identify examples of using blade-razor strategy.

buying a reusable product for cheap but being forced to buy complementary product ex: cell phone with plan and printers with ink and paper

Be able to list/identify examples on how a company can increase customers' switching costs.

differentiation, network effects, distribution channels, patents (sometimes)

What is DNS? Understand the basic function of DNS and how a computer interacts with DNS to find the IP address of a given URL.

domain name service: Internet directory service that allows devices and services to be named and discoverable. IP address: A value used to identify a device that is connected to the Internet. ISP service that looks up IP addresses.Goes to root server name -> .com name server-> yahoo.com name server

Be able to list/identify examples of computer input devices, processing devices, output devices, and storage devices.

input - mouse, keyboard processing devices - CPU, RAM storage - flashdrives, disks, SSD output - speakers and screens

How does "faster and cheaper computing" affect areas such as IT production and inventory decisions and how does it affect IT adoption decision?

inventory depreciates fast technology must sell quick, computing capital must be bought with utility expiration in mind, upgrading IT budget must be allocated wisely

Why can't Netflix secure a long tail of streaming content that is the same size as its content catalog in the DVD-by-mail business? What is Netflix doing to make its streaming catalog more appealing than rival offerings?

it is actually more profitable to do the DVD-by-mail business because the marginal costs are less than putting a show or movie on their streaming site

How does one-sided market differ from two-sided market? Be able to list/identify examples of two-sided market and explain how the two sides interact with each other.

one-sided: market that derives most of its value from a single class of users two-sided: network market that comprises two distinct categories of participant, both needed to deliver value for the network to work (ex. video game users and creators)

what is strategic positioning

performing different tasks than rivals or the same tasks in different ways

What are commodities?

products or services that are nearly identically offered from multiple vendors

Why did the sharing economy become so popular?

sharing economy is allowing firms to pool resources, products, and services in ways that create new markets and market opportunities Marketplaces allow suppliers to leverage underutilized assets, while marketplace operators can reduce overhead associated with conventional transactions by eliminating storefronts, utilities, staff, capital expense, and more.

Be able to apply the five forces framework to an industry, assessing the competitive landscape and the role of technology in influencing the relative power of buyers, suppliers, competitors, entrants, and alternatives.

the internet can increase buyer power by increasing price transparency. the more differentiated and valuable an offering, the more the internet shifts bargaining power to sellers

What are the major factors explaining Netflix's success in its DVD-by-mail business?

the large selection, collaborative filtering, baked directly into consumer electronic products

Review the FreshDirect business model: What factors explain its success? How does technology impact its value chain? Would a similar business work in rural areas? Why or why not?

value chain - lower rent and larger size and selection, lower energy consumption with open-air refrigerators, resistant to imitation

What are economies of scale?

when costs can be spread across increasing units of production or in serving multiple customers

What are network effects? Be able to list/identify examples of products that are subject to network effects.

when the value of a product or service increases as its number of users expands example: social media sites, whatsapp

What is coopetition? What are the risks and benefits to Netflix in using Amazon's cloud computing platform?

where firms may both cooperate and compete with one another