IDSC 3001 EXAM #1

Proprietary Technology

Privately owned process technology by a single company.

Operational effectiveness

Performing the same tasks better than rivals.

Strategic positioning

Performing different activities than rivals or the same activities in a different way.

"Fast Follower Problem"

Competitors watch and learn and enter the market quickly with a comparable or superior product at a lower cost.

Brand

The symbolic embodiment of all information connected with a product or service.

Economy of Scale

Cost of an investment can be spread across increasing units of production or in serving a growing customer base.

Switching Cost

When consumers incur an expense to move from one product or service to another.

Network Effects

A product or service becomes more valuable as more people use it.

MIS

The study of people, technology, organizations, and the relationships among them.

Infrastructural Technology

Offers more value when shared, can be used by anyone.

Differentiation

Using IS/IT to differentiate their products and services (not just interchangeable commodities).

Distribution Channels

The path through which products or services get to customers.

Value Chain

A set of interrelated activities through which products or services are created and delivered to market.

The value chain

The set of interrelated activities that create and bring products or services to customers including inbound logistics, operations, outbound logistics, marketing, sales, and customer support.

Performing the same tasks better than rivals perform them

Operational effectiveness refers to:

Strategic positioning

Which of the following concepts matches the definition of "performing different tasks than rivals or the same tasks in a different way"?

Research and development

Which of the following is NOT a primary component of the value chain?

Loss of economies of scale

Which of the following is NOT a source of switching cost?

Primary components of the value chain

Inbound logistics, operations, outbound logistics, marketing and sales, support/service.

Secondary components of the value chain

Firm infrastructure, human resources management, technology/research and development, procurement.

Porter's Five Forces

threat of entry, threat of substitute, supplier power, buyer power, and competitive rivalry

Power of buyers/consumers example

Google Flights is an online flight booking search service, which facilitates the search and purchase of airline tickets from many airlines and online travel agency partners. Internet users can use it to find cheap flights. In 2023, Google Flights introduced a new moneysaving feature by showing users "the cheapest time to book."

Power of suppliers example

Singers and music video producers have used YouTube as a platform to reach theiraudience without having to rely on big record labels. Anyone - both famous celebritiesand those without much fame - can create a music video and upload it to YouTube. The site has created many YouTube Personalities, a.k.a. YouTubers.

Threat of entry example

In February 2023, Meta released a new AI model LLaMA, which stands for LargeLanguage Model Meta AI. Similar to other large language models such as ChatGPT,LLaMA works by taking a sequence of words as an input and generating text.

Threat of substitute example

n 2007, Amazon released its e-book reader Kindle that enables readers to shop for, browse, download, and read e-books. Its latest hardware device, Kindle PaperWhite was released on September 7, 2012. eBook sales in the U.S. have been gradually increasing.

Rivalry among existing competitors example

One bloody battle in the computer industry is a constant one between Intel and AMD.Both firms are manufacturers of computer processers. Recently, they both have their eyes on making chips that are small enough to fit in mobile devices yet powerful enough to let people do what they usually do on desktops and laptops on their mobile phones.

Switching costs example

University of Minnesota offer Box as a free application for faculty and students to store and share files. Many faculty and students have been using Dropbox for years and have not made the switch to Box. What is the most likely reason?

Differentiation example

Ordering a Tesla Model 3 is to some degree like shopping on the Internet. Customers first visit the online Design Studio to customize the appearance and options of their car.After customers finish configuring the car, their Tesla will be custom built in a factory and delivered to their nearest service center for customer pick up.

Brand example

Although there are many vendors of smartphones in the United States, Apple and Samsung have enjoyed the largest market shares for many years because of their image of making high quality products and their loyal customer base.

Economy of scale example

Uber and Lyft are two ride sharing platforms and transportation service providers without owning the vehicles. As of 2022, Uber had 131 million active monthly users andLyft had 20.3 million active monthly users. As a result, the operating costs of Uber to serve each user is likely to be lower than those of Lyft.

Distribution Channel example

Google AdSense is a program through which website publishers (like New York Times or a personal blogger) can help Google serve its text, image, video, or interactive advertisements to the site's visitors and get paid. When a visitor clicks on the ad, Google will pay the website publisher.

sustainable competitive advantage

Financial performance that consistently outperforms industry averages.

commodity

A basic good that can be interchanged with nearly identical offerings by others.

inventory turns

It is the number of times is sold or used during a given period.

straddling

Attempts to occupy more than one position, while failing to match the benefits of a more efficient, singularly focused rival.

resource-based view of competitive advantage

The 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. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable, and (4) nonsubstitutable.

dense wave division multiplexing (DWDM)

A technology that increases the transmission capacity (and hence speed) of fiber-optic cable. Transmissions using fiber are accomplished by transmitting light inside "glass" cables. In DWDM, the light inside fiber is split into different wavelengths in a way similar to how a prism splits light into different colors.

Sources of switching costs

learning costs, information and data, financial commitment, contractual commitments, search costs, loyalty programs

Commodities

products or services that are nearly identically offered from multiple vendors

metcalfe's law

Value of the Internet increases with increase in the number of users

Affiliates

Third parties that promote a product or service, typically in exchange for a cut of any sales.

Non-Practicing Entities

Commonly known as patent trolls, these firms make money by acquiring and asserting patents, rather than bringing products and services to market.

price transparency

the degree to which complete information is available

information aysmmetry

a decision situation where one party has more or better information that its counter party.

ERP description

a system of integrated software applications that standardize, streamline, and integrate business processes across multiple functional areas

It is easier to implement and manage

benefit of a cloud-based ERP solution

It is more affordable

benefit of a cloud-based ERP solution

It enables real-time reporting and BI

benefit of a cloud-based ERP solution

The four major functions of business

1. Manufacturing and Production

2. Sales and Marketing

3. Finance and Accounting

4. Human Resources

business process

logically related set of activities that define how specific business tasks are performed

Problems with Functional Information Systems

Isolated systems cannot provide integrated enterprise information

Problems with Functional Information Systems

Inefficiency, redundant work, increased cost, and increased human errors

Problems with Functional Information Systems

When systems are isolated, business processes are disjointed

Problems with Functional Information Systems

Lack of information sharing / collaboration

Sign of ERP Readiness 1

Lots of different software for different processes

Signs of ERP Readiness 2

No easy access to information about the business

Signs of ERP Readiness 3

Accounting takes longer and is more difficult

Signs of ERP Readiness 4

Sales and the customer experience are suffering

Signs of ERP Readiness 5

Your IT Is too complex and time-consuming

Functional Systems

-Multiple systems

-Multiple databases

-Fragmented (islands of information)

Enterprise Systems

-A single system

-A single database

-Integrated information

How ERP works

It operates on an integrated software platform and a single database using common data definitions.

Key features of ERP

-Enterprise-wide integration

-Real time (or near real time)operations

-A common database

-Consistent look and feel

Types of ERP Solutions: Tier 1

Large, global enterprise and internationalization issues including currency, language, accounting rules

Types of ERP Solutions: Tier 2

large enterprises in multiple countries

Types of ERP Solutions: Tier 3

mid-tier enterprises

Types of ERP Solutions: Tier 4

small enterprises

Types of ERP Solutions: Tier 1 Government

Large federal gov. agencies

Types of ERP Solutions: Tier 2 Government

State and local governments

Benefits of ERP Systems

-Internal efficiency

-Better decision making

-Increased agility

-Enhance security

Business Value of ERP

-A global, real-time view of data

-Automate business processes

-Improves financial compliances with regulatory standards

-Enhances customer service with one sources of billing and relationship tracking

1st Step of ERP Implementation

Gain approval

2nd Step of ERP Implementation

Plan the program

3rd Step of ERP Implementation

Configure software (largest and most difficult)

4th Step of ERP Implementation

Deploy the system

5th Step of ERP Implementation

Stabilize the system

Hidden Costs and Challenges of ERP

- total costs of ownership (hardware, software, professional services, staff training)

- business process redesign (BPR) (to match the standard blueprint)

- organizational change management (getting people to use the software to improve the ways that they do their jobs is by far the hardest challenge)

- data migration

- custom code or customization

ERP Deployment Strategy's

-Big Bang

-Staged Rollout or Franchising

-Slam Dunk

Big Bang

To cast off all legacy systems at once and install asingle ERP system across the entire company

Staged Rollout or Franchising

To begin with a demonstration or a pilot installation in a particular business unit and then sell to other units

Slam Dunk

To focus on a few key processes contained in specific modules such as SAP financial or HR

Why ERP Projects Fail

-Ineffective executive sponsor

-Inappropriate package selection

-Internal resistance

ERP Best Practices

-Select the best ERP implementation

-Get executive buy-In and build consensus

-Set realistic expectations (prepare for a dip)

-Focus on staff resources & project management

CRM

A business strategy designed to improve revenues and profitability, reduce costs and increase customer loyalty.

What does a CRM software do?

brings together all information from different departments throughout the company to give one, holistic view of each customer in real time.

CRM is also:

The art of managing good customer relationships and prospective customers. It is all about understanding who your customers and potential customers are, and nurturing the relationships you have with them.

How Does CRM Work?

-Supports a customer-centric strategy

-Centralizes all your customer data

-Automates customer-facing business processes such as lead management and customer support

Goals / Benefits of CRM

-Provide a 360 degree view of customers

-Provide services and products that are exactly what your customers want

-Cross-sell products more effectively

-Help sales staff close deals faster

-Retain existing customers and discovering and acquiring new customers

Key insights of CRM

-Who are the customers?

-What are their needs?

-What is their value to the company?

Conventional Wisdom in CRM:

The customer is always right

Anyone willing to part with their money should be treated as a valued customer

A New Perspective on CRM:

-"Not all customers are created equal"

-The challenge is to separate valuable customers from those other customers are profit neutral or negative

-CRM helps prioritize resources when serving different customer groups

On-Premise or On-Site Software

is installed and run on a server on premises (in the building) of the organization under its control

On-Demand or Software as a Service

Runs on the vendor's cloud infrastructure and follows a pay-as-you-go approach

a.k.a. as hosted services provided to customers across the Internet

Electronic Commerce

Online transactions or digitally enabled commercial transactions between and among organizations and individuals, primarily over Internet

Business-to-Consumer (B2C)

Applies to any business or organization that sells its products or services to consumers over the Internet

Examples of Business-to-Consumer (B2C)

Amazon, online banking, travel services, online auctions, online healthcare exchanges4

Business-to-business (B2B)

Shopify, BigCommerce, Adobe Commerce

Consumer-to-consumer (C2C)

eBay, Craigslist, Amazon marketplaces

The long tail rule

a business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items.

Other names for the long tail rule

the power law, pareto principle