OMIS 351 - Midterm Exam Study Guide

Hype Cycle

Curve with market expectations (vertical) plotted against time (horizontal) that stakes out five stages

Hype Cycle 1.

Emerging innovation

Hype Cycle 2.

Inflated expectations

Hype Cycle 3.

Trough of disillusionment

Hype Cycle 4.

Slope of enlightenment

Hype Cycle 5.

Plateau of productivity

Impact of AI (High level)

AI is capable of changing the future

Fast follower problem exists when competitors

watch a pioneer’s effort, learn from their successes and missteps, enter the market quickly with a comparable or superior product at lower cost before first mover can dominate

Resource-based view of competitive advantage is

strategic thinking approach suggesting if firm is to maintain sustainable competitive advantage, must control exploitable resource that have 4 critical characteristics

rare

valuable

imperfectly imitable

non-substitutable

Resource-based view of competitive advantage 4 characteristics

Rare, Valuable, Imperfectly imitable, Non-substitutable

Value Chain

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

Imitation-resistant value chain

a way of doing business that competitors struggle to replicate and involves technology in a key enabling role

Secondary components of value chain

1. Firm’s infrastructure

2. Human resources management

3. Technology/R & D

4. Procurement

Five primary components of value chain

1. Inbound logistics

2. operations

3. outbound logistics

4. marketing and sales

5. support

Porter’s 5 forces of competitive analysis is the idea that

4 of the 5 forces directly and inversely affect the 5th force

Porter’s 5 forces of competitive analysis listed

1. Potential new entrants

2. threat of substitute products or services

3. power of suppliers

4. power of buyers

5. Affects rivalry among existing competitors

McNamara Fallacy

Basing decisions on past data and examples - especially risky when dealing with disruptive innovation

McNamara Fallacy 4 steps

1. Measure what can be easily measured

2. disregard what cannot be measured

3. assume what cannot be easily measured is unimportant

4. assume what cannot be measured does not exist

Atom to bits

digitalization, physical world to digital world

Why do big firms fail?

fail to see disruptive innovations as threats

Characteristic of Giant Killers

1. Come to market with performance attributes that existing customers do not value

2. performance attributes improve to where they invade established markets

How large firms combat challenges?

Build portfolio of options on emerging technology, invest in firms, startups, or internal focus on what could be the next big thing

Network Effect

when value of a product or service increases as its number of users increase

1st source of network effects

exchange, communicate with more people

2nd source of network effects

staying power

Switching Costs

incurred when moving from one product to another

Total Cost of Ownership (TCO)

economic measure for full cost of owning a product

3rd source of network effects

complementary benefits, products that add value to primary product or service creating a network

One-sided Market

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

Same-side Exchange Benefits

benefits derived by interaction among participants of a single class such as messaging

Two-sided Market

network markets comprised of two distinct categories of participants

Cross-side Exchange Benefit

increase of users on one side of market creates rise on other side such as videogames

Recognize when network effects are present

when network effects are present, more users attract more users, but can become overwhelming to the point of unusability

Congestion Effects

when increasing numbers of users lowers value of product or service

Owned Media

communication channels that an organization controls

Paid Media

efforts where organization pays to leverage channel or promote a message, such as advertisements

Earned Media

promotions not paid or owned but grow organically from customers such as social media

Inbound Marketing

leveraging online channels to draw consumers to firms with compelling content as opposed to traditional advertisement

Crowdsourcing

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

Impact of Social Media in Business

User-Generated Content (UGC), influencer marketing, rapid product feedback, rapid market research

Sharing Economy

a section of the economy that depends on users to provide goods or services

Reward and risk to Suppliers in sharing economy

flexibility, income, low barrier to entry

but job security, income not steady, liability/upkeep, local laws

Reward and risk to Companies in sharing economy

scalability, cost efficiency, global reach, flexibility
but regulatory challenges, reputation management, worker retention, data security

Rewards and risk to Customers in sharing economy

convenient, variety, lower costs

but safety, privacy, inconsistent quality

Rewards and risk for Investors in sharing economy

high upside, low capital, disruptive

but market saturation, regulatory issues, dependence on trust

What helps drive sharing economy?

Cloud computing - includes on-demand scaling,

global reach,

data management for millions of users,

on-demand cost by paying as you go

Social Graph

represents the relationships between people and entities in a network.

Interest Graph

focuses on mapping connections based on shared interests or behavior, regardless of personal relationship

1st Key Feature of Social Graph

Nodes - represent individuals in network

2nd Key Feature of Social Graph

Edges - lines between nodes that represent relationships

3rd Key Feature of Social Graph

Degree - number of connections it has to other nodes

4th Key Feature of Social Graph

Centrality - influence of a node in a network

5th Key Feature of Social Graph

Clustering - grouping of closely connected nodes

6th Key Feature of Social Graph

Density - how interconnected graph is comparing number of actual connections to possible connections

Shadow IT

when organization has people taking care of IT without knowledge or without being IT departmentI

IT infrastructure

backbone of business operations

Data Management and Integration

managing and storing data across systems

Cyber Security and Risk Management

protecting systems and data from cyber threat

Software development and maintenance

building and maintaining custom systems

Networking and connectivity

ensuring seamless communication and data transfer

User support and IT helpdesk

providing technical support to employees

IT Governance and compliance

ensuring IT aligns with business goals

Protecting management and IT alignment

managing IT projects while aligning with business complexities

Vendor and 3rd party management

working with external providers

1st Area of Trust

Integrity - acting with honesty and congruence

2nd Area of Trust

Intent - aligning motives and behavior

3rd Area of Trust

Capabilities - having the skills and knowledge

4th Area of Trust

Results - achieving outcomes and keeping promises

1st and bottom Dysfunction of a Team pyramid

lack of trust

2nd Dysfunction of a Team pyramid

fear of conflict

3rd Dysfunction of a Team pyramid

lack of commitment

4th Dysfunction of a Team pyramid

avoidance of accountability

5th and top Dysfunction of a Team pyramid

lack of results

Trust’s Impact on IT and Business

trust is the foundation to effective IT-business relationships

perception of IT needs to change

trust can accelerate everything

technology alone does not create trust

trust can be key differentiator in digital age

1st Primary Component of Value Chain

Inbound logistics

2nd Primary Component of Value Chain

Operations

3rd Primary component of Value Chain

Outbound logistics

4th Primary component of Value Chain

Marketing and sales

5th Primary component of Value Chain

Support

1st Secondary Component of Value Chain

Firm’s infrastructure

2nd Secondary Component of Value Chain

Human resources management

3rd Secondary Component of Value Chain

Technology/R & D

4th Secondary Component of Value Chain

Procurement

Porter’s 1st force of Competitive Analysis

Potential new entrants

Porter’s 2nd force of Competitive Analysis

Threat of substitute products or services

Porter’s 3rd force of Competitive Analysis

Power of suppliers

Porter’s 4th force of Competitive Analysis

Power of buyers

Porter’s 5th force of Competitive Analysis

affect Rivalry among existing competitors