MIS Lecture vocab

Airbnb

largest accommodations provider owns no property

Uber

largest "taxi service" owns no vehicles

Facebook

most visited media destination but doesn't create its own content

Alibaba

chinas largest retail/e-commerce owns no inventory

largest IPO (Initial public stock offering)

Google

world's most profitable ad-driven media company

Apple

most valuable and profitable ad-driven media company

Amazon

largest e-commerce firm in the US

Sarbanes-Oxley Act

law pass that raise board and management responsibility by tying penalties to certain accounting/financial violations

-(strengthen link b/w tech and accounting)

operation function on producing goods and services

quality programs, process redesign, supply chain management, factory automation, service operations

social media is becoming

the new resume (compelling LinkedIn presence)

Value Chain

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

value chain model

inbound logistics \> operations \> outbound logistics \> marketing & sales \>services

fresh direct,

oWorker shifts are HIGHLY EFFICIENT, avoiding the downtime lulls and busy rush hour spikes of storefronts.
oHIGHER INVENTORY TURNSmean the firm is selling product faster, so it collects money quicker than its rivals do.
oArtificial intelligence software, coupled with some seven miles of fiber-optic cables linking systems and sensors, supports everything from baking the perfect baguette to verifying orders with 99.9 PERCENT ACCURACY.
oSince it lacks the money-sucking open-air refrigerators of the competition, the firm even SAVES BIG ON ENERGY (instead, staff bundle up for shifts in climate-controlled cold rooms tailored to the specific needs of dairy, deli, and produce).
oThe firm also uses RECYCLED BIODIESEL FUEL to cut down on delivery costs.
oFreshDirect buys directly from suppliers, ELIMINATING MIDDLEMEN wherever possible.
oOffering to carry a greater selection of supplier products whileELIMINATING THE "SLOTTING FEES" (payments by suppliers for prime shelf space) common in traditional retail
oPAYING PARTNERS IN DAYS rather than weeks
oSHARING DATA to help improve supplier sales and operations

Fresh direct is resistant to imitation from incumbent physical store (mom & pops) bc

-they straddle two markets
-spend 75 mill on infrastructure

Brand

symbolic embodiment of all the info connected with product or service

Purpose of a strong brand

-can act as competitive advantage
-consumers use brand to decide whether is better then leads to brand loyalty

viral marketing

the digital version of word-of-mouth marketing

Porter Five Forces of Industry Competitive Analysis

potential new entrants, power of suppliers, rivalry among existing competitors, power of buyers, threat of substitute products or services

Porter Five Forces of Industry Competitive Analysis example

Competitors operating in the same industry may drive profit margins and revenue down for any given company

network effects

-when the value of a product or services increases when user expand

network effects examples

yelp,uber,wikipedia,insta

What is network effects also referred to

Metcalfe's Law

switching costs

cost that incurred when switching from one product to another

what does high switching cost mean

they can rapidly out shine rivals

Why is Zara a game changing giant

-does not adv and rarely have sales
-highly vertically integrated

Zara approach for product design

-fashion of the moment
-ask shopper opinions
-young designers

Zara approach manufacturing & logistics

-company controlled factories (vertical) \= change design and color quick
-tech-enable operations

Technology-enable

counter intuitive strategy for sustainable advantage

Inditex become

the largest fashion retailer in the word
(open one store per day)

Gap vs Zara items per year

2-4k vs 30k+

Personal Digital Assistant (PDA)

typically hand-held mobile device used to gather customer input and feedback

point of sale system (POS)

transaction processing system that captures customer purchasing info

allows mangers to make decisions quickly and accurately

Zara designs base on data

-300+ young designers and rotate them
-sketch on CAD system
-customer demands dictate design

Rotation

Cross-pollinate experience and Encourage innovations

computer aided design (CAD)

helps companies to plan and test products more efficiently

help create 2D or 3D construction and over all optimizes design process

How long does it take Zara to create clothes

15 days and tweaks 10

How long does it take for normal manufactures to make designs

6 months designs and 3 to make

Gap and H&M take on creating clothes

about 3 months

Zara Supply Chain

-most of fabric is produce in house 40%

-dyes is purchase from own subsidiary

-most of merchandise is produce in house 60%

Omnichannel

a multichannel selling approach where a single retailer provides a seamless customer shopping experience from desktop computer, mobile device, telephone, or brick-and-mortar store

-offer consumers an integrated and complementary set of sales, shop, and returns (online and in store)

Zara limited production

-encourage buy right away and to come more often
-reduce risk of mistakes

Zara's IT expenditure

allows them to excel by targeting IT investments in the points in value chains where they have the most significant impact

logistics

coordinate and enable flow of goods, people, information, and other resources

radio frequency identification (RFID)

small chip base tape that wirelessly emits unique ID code for product

-zara's are custom made and recused

megabyte

1 million bytes

kilobyte refers

a thousand bytes, or a thousand characters

gigabyte

1 billion bytes

terabyte

1 trillion bytes

petabyte

1 quadrillion bytes

exabyte

1 quintillion bytes

Kbps

kilobits, or one thousand bits, per second

Mbps

megabits per second

Gbps

gigabits per second

Tbps

terabits per second

Moore's Law

the observation that computing power(chip performance per dollar) roughly doubles every two years (18 months)

What does Moore's law do

computers get smaller, faster, and cheaper

make pathways inside silicon ships gets smaller with each successive generation

Central Processing Unit (CPU)

selects instructions, process them, preforms arithmetic and logical comparisons & stores operations in memory

Central Processing Unit (CPU) 2

Brain of the computer that performs instructions defined by software

multicore microprocessors

Microprocessors with two or more (typically lower power) calculating processor cores on the same piece of silicon

outperform a single
speedy chip, while running cooler and drawing less power

most PC & laptops have

Random Access Memory (RAM)

The fast, chip-based volatile storage in a computing device.

volatile memory

storage that is wiped clean when power is cut off from device

non-volatile memory

storage that retains data even when powered down

economies of scale

cost can be spread across increasing units go production multiple customers (service)

big customer base gives space advantage \=

economies of scale

Amazon vs Netflix

coopetition/frenemies

Disruptive Technology

A new way of doing things that initially does not meet the needs of existing customers

effects brick and mortar shops

also referred to as disruptive innovation

Characteristics of disruptive technology

-come with a set of attributes that existing consumers dont value

-overtime performance attributes improve to the point they invade the market

bitcoin

An open-source, decentralized payment system (sometimes controversially referred to as a digital, virtual, or cryptocurrency) that operates in a peer-to-peer environment, without bank or central authority.

cryptocurrency

digital asset where a secure form of mathematics is used to handle transaction control creation of additional units and verify transfer of assets

Blockchain

A distributed and decentralized ledger that records and verifies transactions and ownership, making it difficult to tamper with or shut down.

Purpose of blockchain

Blockchains remove the need for central trusted authorities on interactions online, thereby proving true decentralization of networks.

takes off fees

Three pillars of the business

large selection, low price, and customer experience

Amazon postpone profits to

concentrate on expanding warehouse, build e-commerce operations, develop a cloud computing, and pioneering eBooks

Echo and Alexa is powered by

machine learning

machine learning

brand of AI and computer science that focus on us oof data and algorithms to imitate the way humans learn and accuracy

Wheel of Growth

allows them to create two sided network

also give great bargaining power with suppliers

economy of scales

two-sided network effect

Products or services that get more valuable as two distinct categories of participants expand (e.g., buyers and sellers).

Affiliate Marking Program

firm rewards partners who bring in new business with a percentage of sales

Acquisition of other firms and growth of new internal businesses enable

-broaden product offering
-absorb potentially threatening competitors before they get big
-experiment with new product offering
-integrate value-added business and tech

Browsing

allows amazon to create personalized web and recommend better

Run A/B Test

a randomized group of experiments used to collect data and compare performance among two options studied

ex. web page lay out, with and without recommendations

chaotic storage

Organic shelving system without permanent areas or sections. The product's characteristics and attributes are irrelevant. Storing base on size

advantages in chaotic storage

flexibility, accuracy, simplicity, and optimization

database

tracks and monitors every single product that enters and exits the warehouse and keeps track of what is on the self

software

informs the picker the optimal route

checks the weight to see if something is missing

use a unique bar code to identify everything

outstanding customer service experience results in repeat customer and fuels a strong

brand

as number of customer increase more product can be offered creating

scale

robots in amazon warehouse is 50%

more effect at moving inventory and store 50% more products

cash coversion cycle

the period between distributing cash and collecting funds associated with operation

Long and Mid-Haul Trucking

Amazon owns thousands of its own branded truck trailers that get loaded with customer packages at fulfillment centers

prime air

for items that need to travel farther and faster than trucks

the last mile

Technologies that connect end users to the Internet. The last-mile problem refers to the fact that these connections are usually the slowest part of the network.

By Sea and Global Reach

Amazon's China subsidiary has become an ocean freight shipping operator moving goods from Chinese manufacturers to the U.S.

On Deck

delivery by drone goal is to eventually use copter-style drones to deliver small
packages to consumers in thirty minutes or less

traditional products

value depends on the physical attributes and proportional to its rarity

product subject to network effects

value is a function of the number of existing users of the product

one-sided market

a market that derives most of its value from a single class of users

ex

same-side exchange benefits

derived by interaction among members of a single class of participant

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 (e.g., video game console owners and developers of video games).

cross-side exchange benefit

increases in the number of users on one side of the market creating rise on the other side

ex console owners create rise in software developers