CIS test #1 – Flashcards
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Finance
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1. The tech industry continually sprouts new businesses- Suited to IPO mrkts 2.Tech firms are actively involved in mergers and acquisitions (M&A) 3.Finance careers involve, lending to tech firms, evaluation the role of technology in firms in an investment portfoilio. 4.Technology-based trading platforms
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Accounting
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1. The reliability of any audit is inherently tied to the reliability of the underlying technology 2. increased regulation has strengthened the link between accounting and tech- by helping ensure accuracy of accounting Sarbanes-Oxley ACT 3.major accounting firms have spawned tech-focused consulting practices
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Marketing
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1. Firms are shifting spending from traditional media to web because of its ability to, track customers, analyze campaign results, and modify tactics 2. the use of social media to generate sales, improve reputations, better serve customers, and innovate 3. CRM, SEM, SEO
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Customer relationship marketing (CRM)
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is a model for managing a company's interactions with current and future customers
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Search engine optimization (SEO)
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the act of optimizing a website through key words and website development to boost natural search engine listings.
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Search engine marketing (SEM)
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the process of gaining traffic from search engines. While SEO is a part of this process, Search Engine Marketing encompasses many other tools including: -Paid inclusion and trusted feed programs -Pay-for-placement management (includes pay-per-click) -Link popularity / reputation development
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Facebook and marketing
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Each time a facebook user chooses to "like" a company, they bring it to the attention to an average of more than 100 friends
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twitter and marketing
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PC maker dell claimed that average daily mentions of the company on twitter exceeds the combined circulation of the top 12 U.S. newspapers
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foursquare and marketing
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GAP gave a 25% discount to people who checked in
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operations
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Tech centric operations include: -Quality programs -process redesign -supply chain managment -factory automation -service operations
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Human resources
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1.Directors are using technology for employee training, screening, and evaluation 2. Linked in 3.hiring and retention practices in the prior generation are in a flux 4. recruiting hasn't just moved online, it's now grounded in information systems that scour databases for specific skill sets, allowing recruiters to cast a wider talent than ever before.
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Radically changing Business landscapes
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1. open source software has lowered computing costs 2. sophisticated high powered computing is turning into a utility -cloud computing -software as a service 3. fueled data-driven decision making -Big data -business intelligence
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fundamental question in the internet era
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"How can I possibly compete when everyone can copy my technology and the competition is just a click away?"
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Competitive advantage
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a product or service that an organizations's customers value more highly than similar offerings from a competitor Examples: -HP- technology innovation -dell (first mover)- JIT ups-logistics- optimal routes
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First-mover advantage
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occurs when an organization can significantly impact its market share by being first to market with a competitive advantage EX: iphone first mover late-mover galaxy
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Achieving sustainable competitive advantage is not easy
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1. rapid emergence of new products and new competitors 2. new competitors and copy cat products cutting costs, prices, and increasing features
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operational effectiveness vs. strategic planning
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According to porter, firms suffer aggressive, margin-eroding competition because they define themselves according to operational effectiveness rather than strategic planning
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operational effectiveness
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performing the same tasks better than rivals perform them - danger of creating a lack of innovation
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the danger of operational effectiveness
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the risk is acute in firms that rely on tech for competitiveness because: -they buy the same stuff as rivals -hire the same students -copy the look and feel of competitor websites -reverse engineer their products -technology can be imitated quickly- rarely a source of competitive advantage
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strategic positioning
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performing different activities than those of rivals, or the same activities in a different way -tech itself is very easy to replicate, but it is essential to creating and enabling novel business approaches that are defensibly different and can be quite difficult for others to copy
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Disruptive innovation (technology)
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a new way of doing things that initially does not meet the needs of existing customers -they typically cut into the low end of the market place and eventually evolve to displace high-end competitors and their reigning tech
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sustaining technology
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produces an improved product customers are eager to buy
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companies
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sometimes fail even though they: -all listened to existing customers -invented aggressively in tech -had their competitive antenna up they still lost their market dominance beacues -placed too great of an emphasis on satisfying customers' needs, and forgot to adopt new disruptive tech and meet customers future needs EX: blockbuster vs redbox
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Fresh direct
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NYC based grocery firm focused on the two main problems with NY 1. limited selection 2. high prices
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the solution fresh direct provides
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use technology to craft ultra efficient model that makes an end-run around stores
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how fresh direct crushes costs
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1. worker shifts are highly efficient 2. the firm buys and prepares what it sells, leading to less waste 3. Higher inventory turnovers 4.use of artificial intelligence software 5. use of climate controlled cold rooms to save energy costs 6.use of recycled bio-disel to cut down delivery costs
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fresh direct supplier benefits
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1. offering to carry a greater selection of supplier products by elimination "slotting fees" 2. co-branding 3. paying in days rather than weeks 4. sharing data to improve supplier sales and operations - traditional grocers can't fully copy the firms delivery business because this would leave it straddling two markets
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Resource-based view of competitive advantage
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strategic thinking approach suggesting that if a firm is to maintain sustainable competitive advantage, it must control an exploitable resource, or set of resources, that have four critical characteristics -Valuable -Rare -Imperfectly imitateable -non-substitutable EX. Fresh driect- other grocers would be straddled between business models, unable to reap the full advantages of either
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straddling
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when a firm attempts to match the benefits of a successful posistion while maintaining its existing position
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late-moving power play
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rivals will struggle , as freshdirects lead time allows it to develop brand, scale, data, relationship and other advantages that newcomers lack
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Two concepts defined by michael porter can be useful in achieving sustainable advantage
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1. Porter' five forces model 2. value chains
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five forces model
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1. potential new entrants 2. power of suppliers 3. power of buyer 4. threat of substitute products or services 5. rivalry among existing competitors
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buyer power
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high when buyer have many choices of whom to buy from, and low when their choices are few
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supplier power
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high when buyers have few choices and low when customers have many choices
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Threat of substitute products or services
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high when there are many alternatives to a product or service and low when there are few alternatives
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threat of new entrants
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high when its easy for new competitors to enter the market and low when there are significant entry barriers to entering a market
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high or low barriers
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-energy- high -telcom- high -banking- high -resteraunt- low catering-low -movie rental- low
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Rivalry among existing competitors
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high when competition is fierce in a market and low when competition is more complacent
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powerful resources
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-brand -scale -switching costs and data -differentiation- using tech -network effects -distribution chanels -patents
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Brand
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the symbolic embodiment of all the information with a product or service -a strong brand can be exceptionally powerful resource for competitive advantage 1.consumers use brands to lower search costs 2.strong brand proxies quality and inspires trust -technology can play a critical role in rapidly and cost-effectively strengthening a brand
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Difficulties and benefits of branding
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branding is difficult, but if done well, even complex tech products can establish themselves as killer brands -early customer accolades for a novel service often mean that positive press will follow -showing up late may mean paying much more EX: amazon 0 costs EX: google vs bing 0 vs 100m
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scale
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business benefit from economies of scale- when the cost of an investment can be spread across increasing units of production or in serving the growing customer base bargain power- apple 60% of the world's supply of advanced touch-screen displays
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switching cost and data
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exist when consumer incur an expense to move from one product or service to another-- sources -learning costs -information and data -financial commitment -contractual commitments -search costs -loyalty programs -data can be a particularly strong switching cost for firms leveraging technology
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differentiation
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commodities are products or services that are nearly identical to one another--- to break the commodity trap, many firms leverage technology to differentiate their good and services EX: amazon
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Viral marketing
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leveraging customers to promote a product or service
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network effects
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when the value of a product or service increases as its number of users expands--- facebook or the app stores
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distribution channels
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the path through which products or services gets to customers -ex: tivo vs cableDVR -amazon marketplace
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patents
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intellectual property protection can be granted in the form of a patent for those innovation deemed to be useful, novel, and nonobvious -firms that receive patents have some degree of protection from copycats that try to identically mimic their products and methods -patents are not necessarily sure-fire paths to exploiting innovation
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Barriers to entry, technology, and timing
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the barriers to entry in the tech industry are low -market entry is not the same as building sustainable business and just showing up does not gurantee survival -timing and technology alone will not yield competitive advantage -moving first pays off when the time lead is used to create critical resources that are valuable, rare, tough to imitate, or lack substitutes
