Compiled Knowt Notes For Bu111 Midterm Exam

Diamond E Model: (Definition)

Matches internal characteristics with external solutions. It is the plan the business uses to pursue opportunities & avoid threats. Determined using Diamond-E, KSF, or Porter’s Generic Strategies.

Internal Strategy: What CAN we do?

External Strategy: What SHOUD we do?

Diamond E Model (connecting internal qualities of the company to the external environment)

Internal Qualities (Strengths/Weaknesses)

• Management Preferences

• Organization

• Strategy

• Resources

External Environment (Opportunities/Threats)

• Determined using PEST or Five Forces

Diamond E Model Application

1- Is the current strategy aligned with future opportunities and threats?

2- What new strategies are feasible and worthwhile?

3- What are our strengths and how can we use them for competitive advantage in the environment?

4- What do we need to execute a strategy? Can we get it? Where are we inconsistent?

Diamond E Model Steps

1- Look Internally, i.e. What do we want and what can we do?

Management Preferences:

• What does management want? Ambitions? Objectives? Vision? Biases?

• What are its Priorities?

• How comfortable is it with Risks?

• Does it value some strategies over others?

• Does it value some resources over others?

Organization:

• Company Culture - “Who we are”

• Company Capabilities - “ What are we good at” ex: Marketing, supply chain, etc.

• Specialist (efficiency) vs Generalist (integrative)

• Innovation vs Stability

Resources:

• Financial: Cash on hand, equity, debt, ability to take out loans

• Intangibles: Human Capital, reputation, patents, knowledge

2- Deal with Strategy - Environment Linkage

• Assess forces at work and their implications

• Adjust internal or adjust strategy, because there are variables we can change

3- Create a Strategy

• Once you have examined all internal factors, create strategy to tackle the external factors, i.e Environment

Business Situation Framework #1 (Customer)

Customer:

• Who buys, uses, why, how much, how often, and in what context?

• Segments (size, growth, % of market)

• How do they make buying decisions?

• Distribution channel preference

Business Situation Framework #2 (Company)

Company:

• Capabilities, expertise, resources, distribution channels

• Financial situation

• Organizational structure

• Preferences, vision, mission

• Intangibles (reputation, brand equity, human capital)

Business Situation Framework #3 (Competition)

Competition:

• Market share concentration

• Strategy (position/target, products, pricing, distribution)

• Best practices (are they doing something we aren’t/can’t)

• Barriers to entry - new competitors?

• Regulations

Business Situation Framework #4 (Product)

Product:

• Nature of product (how it’s used, why it’s valuable?

• Differentiated?

• Complementary goods needed?

• Substitutes

• Life cycle stage

Principle Logic (ICE-A)

Internal Consistency:

• Good management/execution of internal business practices

External Allignement:

• Correct strategy, optimized for the environment

P+G Strategy-Structure (2000)

• Internally inconsistent and externally misaligned strategy

• Wrongly focused on diversifying their product lineup

• Customers lost interest, too much variety for target audience

• Suppliers were also short on resources for the expansion, causing shortages

Ikea Strategy-Structure

• Internally consistent and externally aligned strategy

• Noticed many customers did not have the space for large furniture in their smaller apartments/homes

• Adapted to environment, shipping furniture in pieces so it could be fit in any home and built there.

• Consider their financial resources, they were able to use large buildings as retail warehouses and create different product lines to appease their target audience.

Success Key Factors (SKF)

SKF - Financial Resources (3 KPI)

Financial Resources:

• Profits

• Growth

• ROI

Key Performance Indicators:

• Revenue/Profits: Describes net profit. Higher is better, growth is better.

• ROI: Returned revenues on initial investment

• Firm Value: The value of the company if sold today

SKF - Employees (4 KPI)

Employees:

• Enable Firm Operation

• Hire qualified personnel that enjoy working for you

• Give your employees chances to succeed, ex promotions

• Motivate them with profit sharing, flexibility, development, opportunities, etc.

Key Performance Indicators:

• Employee Commitment: Describes the loyalty, passion, and commitment of employees. These workers are significantly more productive.

• Employee Turnover: Amount of employees you have to replace, year over year (Lower is better)

• Productivity: The amount of output the company’s employees generate

• Application: Employees tend to be attracted to work at companies with good employee relations.

SKF - Customers (5KPI)

Customers:

• Provide Revenue

• Create brand loyalty

• What do you have to offer?

• Who needs/wants it the most?

Key Performance Indicators:

• Customer Satisfaction: When a company anticipates their target market’s needs.

• Market Share: Percentage of overall market you control/own in $ influenced by firm size

• Share of Wallet: the % of money that consumers regularly spend on a company’s products rather than their competitors. (Higher is better)

• Net Promoter Score: Measuring advocacy of your customers, such as if customers regularly recommend a company’s products to others. (Higher is better)

• Churn: % of customers the firm loses every year. Measures customer loyalty. (Lower is better)

SKF - Products/Services (7 KPI)

Products/Services:

• The “Means of Revenue”

• Concerns perceived quality

• Optimize your inputs, production process

Key Performance Indicators:

• Quality: Concerns the product’s perceived value, consistency and reliability

• Reliability: Products expected life span is directly related to its perceived value

• Returns: Happens when consumers are not satisfied with product (Lower is better).

• Defects: Products that are not up to company’s quality quality standards. High defect rates creates perception of inconsistent product quality.

• Warranty Claims: Higher number of warranty claims show product does not live up to its expected life cycle

• Waste: Inefficiencies in manufacturing process, usually due to low quality inputs

• Value: You get what you pay for and are okay with it because you expect it.

SKF - Innovation (6KPI)

Innovation:

• Improves Environmental Alignment

• Culture, structure, and rewards

• Includes small things like the WAY you serve customers.

• Can create valuable change

Key Performance Indicators:

• New Products: New forms of the product, new approaches to selling the products, etc.

• Idea Generation: New ideas are encouraged and are being explored by employees in the company

• Cycle Time: How long it takes to go from idea generation to full implementation (Faster is better, indicates better and more efficient organization).

• Company Culture: Can be accepting of change, gives employees rewards for pushing innovative ideas/

• Company Structure: Can provide employees opportunities to explore change/creativity.

• Rewards: Employees can be rewarded for thinking outside the box

SKF - Uniqueness (3KPI)

Uniqueness:

• Creates market advantage

• R&D needed

• What’s going to attract employees and customers to your business instead of your competitors?

Key Performance Indicators:

• Distinctive Competitive Advantage: Valuable & sustainable differentiation from competitors

• Strong Unique Reputation: Extracted from market research. How the market (consumers, competitors, employees) perceives the firm

• Superior Competitive Performance: Is the firm able to produce cheaper, faster, is the firm able to charge more, attract better employees, compared to competition.

Why Consider KSF?

• Guide strategic and daily actions. like a daily checklist
• Ensure long-term success
• Ensure holistic thinking

Reminds you that KSF are connected. Organizations are made up of interconnected components.

Porter’s Generic Strategies (Definition)

Offers insights on competitive position strategies a firm can take and what is needed to pursue them.

Porter’s Generic Strategies

Competitive Scope (Y):

Broad Target: Appeal to a broad group of customers

Narrow Target: Identify an underserved niche market, and target them.

Competitive Advantage (X):

Cost: Advantage resides in offering products cheaper than competitors. Can the firm deliver goods at the lowest cost and still turn a profit?

Differentiation: Advantage resides in how firm’s products are distinct from competitors. How can the firm make consumers pay more for their product?

PGS #1: Cost Leadership

Description:

• Appeals to BROAD market at LOW price

• Has the capacity to produce at large volumes and has the capabilities to produce more cheaply than others

• Does the large portion of the overall market value lower priced offering?

PGS #2: Differentiation

Description:

• Appeals to BROAD market at HIGH price

• Products provide unique features that consumer pay extra for, and has the capacity to product at a large capacity

• Are the unique features broadly appealing?

PGS #3: Cost Focus

Description:

• Appeals to NARROW market at LOW price

• Serves their niche at the lowest price possible

• Does a simpler, lower performance, cheaper product appeal to small but enough portion of the market

PGS #4: Differentiation Focus

Description:

• Appeals to NARROW market at HIGH price

• Company targets small group that are willing to pay substantially more.

• Would customers be willing to pay a lot more?

PEST Factors: Look For’s in External Analysis

Present:

• Current Environmental situation

• Firm should constantly look for ways to adapt to its current environment

Trends:

• Observable Environmental changes that will come in the future

• Firms should anticipate changes and adapt ahead of time. Ex: Society’s social structure changer over time

Quick Changes:

• Predictable or surprising changes

• Anticipate and plan contingency strategies

• Predictable Changes: Interest rates changes

• Surprising Changes: Covid-19, natural disasters

PEST Factor #1: Political

Descriptions:

• Laws

• Regulations

• International Trade Laws

• Trade Agreements

Opportunities/Threats:

• Expansion. Ex. If governments negotiate trade agreements with foreign countries a business will have opportunities to expand into foreign markets

• Barriers. Ex. Regulations bar the average Canadian from creating their own chartered banks.

• Competition. Ex. If trade agreement reduced tariffs, foreign companies are now competing with you for the same population

PEST Factor #2: Economic

Descriptions:

• GDP

• Inflation

• Employment

• Exchange Rate

• Interest Rates

Opportunities/Threats:

• Input Cost. Ex. When inflation is high, input costs are higher. When CAD exchange rate is high, input costs are lower.

• Demand. Ex. If firm wants to expand into country with high GDP, demand will be higher because citizens have plenty of money.

• Funding. Ex. Higher interest rates lower access to easy loans

• Competitive Pricing. Ex. High CAD is better for importers as it allows them to import for for the same amount of money. Low CAD is better for exporters as it makes them more competitive, people with a stronger currency can buy more of the Canadian firm’s products.

PEST Factor #3: Social

Descriptions:

• Values/Attitudes

• Customs

• Habits

• Demographics

Opportunities/Threats:

• Customers. Ex. Values, attitudes, customs and habits affect what they demand and how the firm communicates with them in marketing material

• Employees. Ex. Canadian’s attitudes towards working in an office post COVID have changed. Many Canadians prefer working from home, at least more than they did pre-Covid.

• CSR (Corporate Social Responsibility). Ex. Management, who control CSR plan, are constrained by the morals and values of their society. Many companies in the east would not promote pro-LGBTQ initiatives because of public backlash.

PEST Factor #4: Technology

Descriptions:

• IT

• Internet

• Materials & Equipment

• Has Biggest Impact on Organizations

Opportunities/Threats:

• Barriers. Ex. Tech can create or reduce barriers of entry to many industries. Airbnb entered hotel industry by using technology, instead of buying lots of real estate.

• Innovation. Ex. Changes in steel production allowing steel to be lighter but just as resilient.

• Strategy. Ex. Companies use technology to adapt new trends, such as retailers integrating e-commerce capabilities in their business model.

Questions to Answer From PEST Analysis

• Are social factors changing how I hire or what customers want? How are customers different in foreign markets?

• Can I use tech to improve product quality, meet customer needs, or increase profitability?

• Will changes in laws, regulations or tech reduce barriers to entry?

• What legal protection do I have or what laws do I have to comply with?

• What do future economic conditions look like and how will they impact my firm?

Porter’s Five Forces: Focus

• Focuses on evaluating INDUSTRY environment
• Helpful on identifying COMPETITION in industry
• Identifies challenges or constraints
• Identifies what the competitive environment look like
• Identifies external factors affecting the industry
• Identifies the industries that might be worth entering
• What barriers will a firm face if they choose to expand into this industry?

Caveat: Power and influence of each force will vary by industry. One weakness of Five Forces.

PORTER’S 5 Forces:

P5F Breakdown: Existing Competitors (6)

Existing Competitors:

• Biggest factor

• More competition = less profit, no above-normal returns

• Includes all current competitors

Factors:

Homogenous Competitors:

• When competitors are similar to each other

• Lack of competitive advantage

• Companies have to work extra hard to gain market share

• Very aggressive competition

• Ex: Bread, Milk, etc.

Low Industry Growth Rate:

• Lower volume long term

• More aggressive competition

• Low profitability n

• Niche markets like umbrella market

The capacity of Competitors:

• If competitors are at max production capacity, competition is not aggressive

• High profitability

• Ex. Lemonade stands are at max production capacity on hot days’ they will run out of lemons

Low Consumer Switching Costs:

• If consumers can switch easily (churn), competition is more aggressive

• Low profitability

• Ex. Gum, many brands have similar flavors, so low switching costs

Products viewed as Commodities or Perishable:

• If consumers view the product as a commodity (homogenous), they will not care which brand they buy

• Price competition is much more aggressive

• Very low profitability

• Ex. Fruits and Vegetables

Exit Barriers:

• Low exit barriers allow customers to leave the market whenever they want.

• Aggressive competition to retain customers.

• Ex. Companies make leaving subscription plans complicated to create exit barriers.

Solutions:

• Grow Market Share

• Acquisition of competitors

• Create/increase consumer switching costs

• Differentiation

• Look at Diamon-E to determine the best solution

P5F Breakdown: Threat of New Entrants (3)

The threat of New Entrants:

• The easier it is for new competitors to enter the market, the more profitability declines.

• The market will become saturated

• The ability to keep future competitors out determines profitability long term

• Determined by barriers to entry

• New entrants often use innovation to permeate the market, such as Airbnb and UBER.

Barriers To Entry:

Cost Related:

• Economies of scale (high output)

• Capital requirements

• Other cost advantages such as learning curves, specialized assets like tech

• Ex. Entry may require large capital requirements such as the automobile industry

Customer Related:

• Differentiation: Customers are either brand loyal or have high switching costs.

• Distribution Channels: Firms secure contracts with distributors. Ex Lays will secure a contract with Sobeys to secure shelf space, making it harder for other potato chip manufacturers to enter the market.

• Ex. Apple has high brand loyalty and switching costs

• Ex. Sobeys may negotiate an exclusive distribution deal with Lays.

Government Regulations:

• Regulations make entering the market harder.

• Ex. Banking and cell phone service. Government has to give you permission to create a bank.

Solutions:

• Grow to achieve scale

• Control distribution network

• Lobby government to create regulations

• Differentiate, and create brand loyalty and identity

• Lock customers in

P5F Breakdown: Threat of Substitutes (4)

The threat of Substitutes:

• More substitutes = less profit

• Cheap substitutes eat away at the bottom end of your market

• Not as convenient, or comfortable, but since it is cheaper people make do.

• The cheaper and better the substitute, the more likely it steals market share

• Substitutes put a cap on your prices (price ceiling)

Factors:

Many Good Substitutes:

• Consumers have many good options

• Aggressive competition

• Low profits

• Ex. Ritz Crackers, have many different substitutes like cookies or chips

Low Switching Costs:

• Consumers can switch easily or cheaply

• Aggressive competition

• Lowe profits

• Ex. Switching from one gum brand to another is really easy, consumers do not think twice

High Buyer Propensity to Substitute:

• The likelihood that consumers will substitute for a competitor rather than your product

• Consumers are more likely to switch to other substitutes instead of you

• Firms will spend more money on marketing

• Aggressive competition

• Low Profits

• Ex. Butter can easily be substituted for margarine

Improvements in Price vs Performance Trade-Off:

• Over time, substitutes innovate and improve

• Substitutes become better, but the price stays the same

• Lowers price ceiling

• Ex. One Plus Phones, cheaper for better

Solutions:

• Strong marketing/differentiation

• Create switching costs

• Lock in customers

P5F Breakdown: Bargaining Power of Suppliers (5)

Bargaining Power of Suppliers:

• Provides the key inputs for the firm

• Changes in cost of inputs affects market as a whole

• The more power suppliers have to negotiate prices, the less profitability in industry

Factors:

Few Suppliers:

• Suppliers know you need them, since there is less choice

• Can negotiate higher prices

• There may be many good substitutes for this input

• Less supply for required inputs, causes aggressive competition and bidding wars

• Low profits

• Ex. Diamond Mines, can be substituted for other gems

Few Good Substitute Suppliers:

• More supplier negotiating power, as there are no alternatives

• Low profits

• Ex. In the automobile industry there are no rubber tire substitutes

High Switching Costs:

• If cost to change inputs are high, you will be resistant to switching supplier

• Unique inputs usually have high switching costs

• Low profits

• Ex. Factory can give bulk discounts, or can lock a buyer into contracts

Low Importance:

• You will be less likely to negotiate low prices if you are unimportant

• You need supplier, but supplier does not need you

• Ex. Walmart has a lot of negotiating power with suppliers because they are a huge chain

Threat of Forward Integration:

• Concern that the supplier may enter industry and become a direct competitor

• Ex. Disney and Netflix. Disney stopped supply Disney movies to Netflix and instead launched their own streaming service.

Solutions:

• Form strategic alliance with supplier

• Internal supply, create your own products, like Netflix making shows.

• Long run: redesigned product or reevaluate inputs

P5F Breakdown: Bargaining Power of Buyers (5)

Bargaining power of Buyers:

• Who pays for your product?

• Effects: Reduces price that you can charge; increases costs.

Factors:

Few/Concentrated Buyers:

• If buyers are few in number, they have more bargaining power over you, and can demand lower price

• Low profit

• Ex. Niche markets like designer umbrella market

Discretionary Purchase; Purchase Significance:

• Non essential items people buy if they have extra money

• Low purchase significance = it is not a need

• Keep prices low to motivate buyers

• Ex. Includes recreational activities like yoga classes are non essential

• Ex. Life threating meds like insulin are essential

Standardized Products; Switching Costs:

• These products have low switching costs, reducing profitability

• Makes it easy to switch between brand, company has to work harder to keep customer loyal

• Ex. Commodities such as milk or gas.

Financially Motivated:

• Determines motivation of the buyers to buy your product

• Cost Significance: As things get more expensive consumers try to negotiate the price. Ex. Cars, houses.

• Profitability: If you affect buyer’s profitability, they will not negotiate the price. Ex: A gumball from a gumball machine

• Cost Savings: How much the consumer saves when they buy from you vs competition. Ex. Consumers love to shop at stores when they are running sales.

Threat of Backwards Integration:

• If buyer may become competitor, that is a problem

• You lose a buyer as well as gain a competitor

• Gives buyer more bargaining power

• Lower profits

• Ex. Apple bought intel chips, then decided to create their own chips

Solutions:

• Form alliance with other sellers (illegal, price fixing)

• Strong marketing/differentiation

• Create high switching costs, lock customers in

Application of Porter’s Five Forces

Expansion Questions:

• How profitable is this industry? Do I enter or not?
• Can I enter? What are the barriers to entry?

Profitability Questions:

• What factors are affecting our revenues and costs?
• What can we do to be more profitable?

Competition Questions:

• Concerns reducing rivalry to improve profitability
• What barriers to entry can we create?
• What are our competitors and how do we reduce head-to-head competition?

Steps to Connect Models to Solve Issues

1- Identity KSF affected by the problem

2- Identify KPI that affect the KSF

3- User Porter’s Five Forces and PEST to determine if the issue is industry-wide

• If it is an industry issue, analyze competitors to determine the strategy

• If it isn’t an industry issue, use DIamond-E or Generic Strategies to reevaluate strategy

Connecting The Models

Key Success Factors:

• Apply to overcome or create barriers to entry

• Am I doing a poor job in one or more KSF or KPI?

• What tactics/strategies can I Implement to fix this?

Porter’s Five Forces:

• Is the cause an industry factor? Compare your situation to competitors.

• What tactics/strategies can I implement to fix this?

PEST Factors:

• Has something changed in one of these factors? Is this change an underlying cause of issues identified above?

Cross Model Connections:

• Under what conditions does pursuing a broad versus narrow target make sense? How does the Diamond-E inform the selection among the four generic strategies?

• How can you harness insights from Porter’s Five Forces to understand the significance and the impact of key success factors by profitability? How do actions recommend for KSF’s align with strategies recommended by Porter’s Five Forces?

• What KPI’s might be affected (and in what way) by factors related to Porter’s Five Forces? How might they indicate SWOT in Diamond-E?

• Identify some key success factors that are related to reducing the negative forces on profitability that you might identify using Porter’s.

• How does the Diamond-E connect to Porter’s Five Forces? Provide an example of how you would apply Diamond-E to identify strategies for dealing with challenges using Porter’s Five Forces.

• How can changes in PEST impact each of Porter’s Five Forces? Identity specific elements of PEST that might change and explain the connection to the Porter’s Force and the effect it will have.

PEST - Social Factor Elements

customs, habits, values/attitudes, demographic characteristics

Significance of social factors

affect customer preferences and worker attitudes and behaviour, standards of business conduct, and corporate social responsibility

what are demographics

study of human populations

cohorts

homogeneous groups within the larger population

why are demographics important

powerful predictor of behaviour/trends, certainty and simplicity of age data, predicts supply and demand and informs environmental analysis and human resource decisions

4 elements of demographics (diamond)

cohort size, cohort characteristics, cohort participation, future and trends

size of cohort

number of people in each age group

factors affecting cohort size

fertility rate, birth rate

activity participation rate

percentage of cohort that engages in a behaviour

cohorts in order

WWI, roaring twenties, depression babies, WWII, baby boom, gen x, millennials, gen z

implications of aging boomers, fewer youth

increased elder care needs, increased number of vulnerable seniors

cohort characteristics - factors

economics, technology, world events/news, parenting

cohort characteristics - characteristics

values and priorities, lifestyle, habits (digital and other), mindset

cohort characteristics - implications

how to attract retrain motivate, what makes a product appealing, how to attract as consumers, how much they spend and what they spend on

boomers characteristics

prefer in-person transactions, long hrs in office, 1 career and company

gen x characteristics

research online but buy in store, brand loyal, flexible work, perfect career

millenials characteristics

digitally savvy, quality over brand, want authenticity, access over ownership, will change jobs

gen z characteristics

digitally savvy, value uniqueness, want to know brand, frugal and avoid debt, several careers

Financial Institutions

facilitate the flow of money from sectors with surpluses to those with deficits

4 Financial Pillars

1) chartered banks

2) alternate banks (trust companies, credit unions)

3) specialized lending & saving intermediaries

4) investment dealers

Financial pillar #1: chartered banks

-a privately owned, profit-seeking financial intermediary that serves individuals, businesses & non-business organizations

-main source of short-term loans for business firms

Financial Pillar #2: alternate banks

-trust companies - safeguards funds and estates entrusted to it; may also serve as trustee, transfer agent, and registrar for corporations

ex: a corporation selling bonds to investors appoints a trustee, usually a trust company to protect the bondholders interests

OR

-credit unions - cooperative savings and lending association formed by a group with common interests

ex: lend money to businesses & consumers who use the money to buy durable goods

Financial Pillar #3: specialized lending & saving intermediaries

- Life insurance companies -shares risk with its policyholder in return for payment of a premium from policyholders

- factoring companies - buys accounts receivable from a firm for less than their face value then collects the face values of receivables

Financial Pillar #4: Investment dealers

-primary distributors of new stock and bond\ issues

-facilitate secondary trading of stocks and bonds, both on exchanges and over the counter stock and bond markets

Bonds

-Certificates of debt that carry a promise to buy back the bonds at a higher price

-a company/ government borrows money from you (investor). they pay interest (coupon) each year and pay off the debt (face value) on an agreed date (maturity date)

Yield

- percentage return on any investment

-helps compare investments

- yield = what you made/ what you paid

Interest on a bond

coupon rate x face value

Capital gain on a bond

face value - purchase price

Approximate yield to maturity

(coupon rate x (face value + (face value - price paid)/ years to maturity) / price paid

What impacts the coupon rate at bond issue

-environment: prevailing interest rates

-company: credit rating of issuer

-product: features

What impacts bond price when traded?

- environment: changes in prevailing rates of interest; inflation

-company: changes in credit rating

- product: coupon rate relative to the return on other equally risky investments

Stocks

Securities that represent part ownership or equity in a corporation

Common stock

the most basic form of ownership, including voting rights on major issues, in a company

preffered stock

Preferred stock typically has limited or no voting rights, but its holders are paid dividends or receive repayment priority in the event the corporation is liquidated

Impacts of stock price

-present value of expected future cash flows

-anything that effects demand and supply of stock

What effects expected future returns?

- environment: economy, interest, PEST, industry conditions, changing dynamics

-company: choices, strategies & changes in diamond E

Leverage

value of initial investment is greater than dollars available to invest

Buying on margin

paying a small percentage of a stock's price as a down payment and borrowing the rest

Going Long

purchase stock with your money only

Selling short

selling stock that has been borrowed from a brokerage firm and must be replaced at a later date

-buy low, sell high

elements of technology (PEST)

internet, information technologies, materials and equipment

5 industries changed by tech

music, travel, transportation, publishing, retail

complementary goods

goods and services that enhance the value of the product and service you're selling

technology standard

enables compatibility of complementary good

installed base

number of users

network effect

value increases as user base grows

vicious/virtuous cycle

availability of complementary good, attractiveness to users, number of users, attractiveness to producers of complementary good

solutions for virtuous/vicious cycle

compatibility, partnerships, incentives for complementary goods suppliers, build base

lock-in

extent to which a customer is committed to a product or service

big data and analytics

collection and analysis of large amounts of data

big data and analytics - benefits

deeper insights, better and faster decisions, predictive capabilities, foundation of AI and machine learning

big data and analytics - use examples

customization, automation, optimized operations, personalization

e-commerce

online research and shopping

omnichannel

seamless experience between platforms, online and physical experience

ecommerce and omnichannel benefits

enhanced marketing and service, improved efficiency, higher margins

ecommerce and omnichannel use examples

customization, optimized operations, automation

VR/AR

replicates an environment or maps over reality

VR/AR benefits

experience without purchase or proximity, reduced cost, enhanced experience