MIS 301 Exam 1

sustainable competitive advantage

The ability to consistantly outperform industry averages/peers

4 critical characteristics to maintain a sustainable advantage

1)Valuable

2)Rare

3)Imperfeclty imitable(tough to imitate)

4)Nonsubstitutable

*These also help create Barriers to Entry

Micheal E. Porters book "Competitive Advantage" - Porter's 5 Forces

1- Barbaining power of customers

2- Threat of Substitues

3- Bargaining power of suppliers

4- Threat of new entrants

5- Rivarly

barriers to entry

Make it difficult for other firms to enter an industry and compete - makes. profits more sustainable

examples of barriers to entry

- Brand

- Regulation

- Distribution Channels

- Captial Intensity

- Switching Costs

- Network Effects

switching costs

A cost that a consumer incurs when switching from one product to another

Network effects

exist if the value of a network increases with the number of users (Facebook)

Porter's Value Chain Model (business structure)

(Support Functions) infrastructure: GM, planning, finance, IS

HRM: recruiting, hiring, training and development

Technology: research and development

(Primary Functions)

1) Inbound Logistics

2) Operations

3) Outbound Logistics

4). Marketing and Sales

5) Service

Operational Effectiveness

performing the same tasks better than rivals perform them

strategic positioning

performing different activities from those of rivals, or the same activities in a different way

5 models for analyzing business(The Value Chain)

1)Examine Industry Structure- Porter's 5 Forces Model

2)Choose our competitive Strategy- Porter's Model of Competitive Advantage

3)Link the parts of the value chain- Porter's Value chain model

4)streamline business processes- any business process diagram

5)Design IS - 5 Component IS Framework

- Enable business processes

- improve value chain links to increase efficiency

- support competitive strategy

- influence industry structure

Inventory Turns

The number of times inventory is sold or used during a specific period (such as a year or quarter). A higher figure means a firm is selling products quickly.

Straddling

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

imitation-resistant value chain

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

Value Chain

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

scale advantages

advantages related to size

economies of scale

factors that cause a producer's average cost per unit to fall as output rises

Distributions Channels

The path through which products of services get to customers

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.

to go private

When a corporation is trying to go from a public corporation to a private corporation, where a few shareholders buy back the shares from the other shareholders via a self-tender offer

Porter's Five Forces

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

price transparency

the degree to which complete information is available

information asymmetry

A decision situation where one party has more or better information than its counterparty.

Supply Chain Management (SCM)

the structuring and coordination of relationships and activities across firms to deliver value in an information and technology intensive global enviroment

supply chain

a network of organizations and facilities that transforms raw materials into products delivered to customers

bullwhip effect

variability in order size and order timing increase at each stage up the supply chain

How to eliminate the Bullwhip Effect

- let all participants have access to consumer-demand info

- inner-organizational info systems are essential to sharing this data between firms

IT Effect on Supply Chain Performance

Postitive Impact:

-reduces cost of buying and selling

- sourcing, buying, coordinating much easier

- reduces bullwhip effect

Demand forecasting and inventory optimization:

- suppliers and customers can optimize inventory size and costs

Improves delivery scheduling:

- Enables just-in-time inventory

POS system

"POS" means "point of sale" or "point of service." POS refers to the place where some sort of transaction occurs. Although POS could be a retail shop or restaurant, a POS system generally indicates a computer terminal or linked group of terminals.

Vertical Integration

when a single firm owns several layers in its value chain

Value Chain

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

greige

Goods to be further customized based on designer/manager collaboration.

RFID

Small chip-based tags that wirelessly emit a unique identifying code for the item that they are attached to. Think of RFID systems as a next-generation bar code.

Logistics

Coordinating and enabling the flow of goods, people, information, and other resources among locations.

Information System

An integrated solution that combines five components: hardware, software, data, procedures, and the people who interact with and are impacted by the system.

return on investment

The amount earned as a result of that investment

Showrooming

The concept where customers browse at physical retailers, but purchase products from lower-cost online rivals.

operations

The organizational activities that are required to produce goods or services. Operations activities can involve the development, execution, control, maintenance, and improvement of an organization's service and manufacturing procedures.

network effects

Also known as Metcalfe's Law, or network externalities. When the value of a product or service increases as its number of users expands.

platforms

Products and services that allow for the development and integration of software products and other complementary goods. Windows, the iPhone, the Wii, and the standards that allow users to create Facebook apps are all platforms.

Metcalfe's Law

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

complementary benefits

Products or services that add additional value to the primary product or service that makes up a network.

exchange value

every product or service subject to network effects fosters some kind of exchange

staying power

The long-term viability of a product or service.

one-sided market

derive most of their value from a single class of users

two-sided market

derive their value from two classes of users(ebay)

TCO (Total Cost of Ownership)

An economic measure of the full cost of owning a product (typically computing hardware and/or software). TCO includes direct costs such as purchase price, plus indirect costs such as training, support, and maintenance.

positive feedback loop

Causes a system to change further in the same direction.

tipping point

when network effects are present, markets may reach a tipping point where network effects become so valuable that one winner emerges

Network effects increase ______

barriers to entry (New entrants must be very desirable

Strategy: Move early

Being first-to-market or moving early is one way to become the dominant provider

Subsidize Adoption

Paying customers to adopt tech. and build the size of your network

Redefine the Market

(IPod redefining MP3 Players by adding iTunes

Open standards refers to:

standards not owned by any company - allows the use of any company

proprietary

characteristic of a companies ownership of property; may restrict the size of the network

same-side exchange benefits

benefits derived by interaction among members of a single class of participant

cross-side exchange benefit

When an increase in the number of users on one side of the market (console owners, for example) creates a rise in the other side (software developers).

Monopoly

A market in which there are many buyers but only one seller.

Oligopoly

a market dominated by a small number of powerful sellers

technological leapfrogging

Competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange, switching cost, and complementary benefits.

social proof

Positive influence created when someone finds out that others are doing something.

Blue Ocean Strategy

An approach where firms seek to create and compete in uncontested "blue ocean" market spaces, rather than competing in spaces and ways that have attracted many, similar rivals.

convergence

when two or more markets, once considered distincly seperate, begin to offer features and capabilities. Ex - the markets for mobile phones and media players are converging

Envelopment

When one market attempts to conquer a new market by making it a subset, component, or feature of its primary offering.

backward compatibility

The ability to take advantage of complementary products developed for a prior generation of technology.

adaptor

A product that allows a firm to tap into the complementary products, data, or user base of another product or service.

The Osborne Effect

When a firm preannounces a forthcoming product or service and experiences a sharp and detrimental drop in sales of current offerings as users wait for the new item.

congestion effects

When increasing numbers of users lower the value of a product or service.

binary digit (bit)

Computers represent data using binary digits (0 or 1), called BITS

Hardware

the physical component of information technology, consisting of microelectronics-based computing or telecommunication devices

the five waves of computing

1 - Wave I (1960s, room size mainframe computers)

2 - wave II (1970s, refrigerator size minicomputers)

3 - Wave III (1980s personal computers)

4 - Wave IV (1990s internet computing)

5 - Wave V - (Now, Ubiquitous computing)

the various statements of moore's law

- The speed of a computer chip doubles every 18 months (faster")

- chip performance per dollar doubles every 18 months (cheaper)

why is it called silicon valley?

- the home to the semiconductor chip making industry that uses silicon(fine sand)as a basic raw materal

- semiconductor chips are used inside most electronic computing devices

What's inside a computer?

- Motherboard

- CPU

- RAM

- Video Card

- Power supply

- hard disk

- optical drive

the STORAGE of a computer contains

- magnetic disk(hard drives)

- optical disk(CDs & DVDs)

- magnetic tape

the INPUT of a computer contains

- keyboard

- mouse

- scanner

- UPC reader

- microphone

the PROCESS of a computer contains

- CPU

- main memory

- special function cards

the OUTPUT of a computer contains

-video display

- printer

- speakers

-slide projector

- plotter

Types of Hardware

Input hardware, processing devices(CPU), Main Memory(sometimes called random access memory or RAM), Special function cards (enhance computers basic capabilities on things like video cards), output hardware, storage hardware

Random Access Memory (RAM)

- main memory

- to store data or instructions, RAM needs power

- RAM is volatile - power off, RAM contents lost

storage

-magnetic and opical disks maintain contents without power and serve as storage devices

- NONVOLATILE- turn computer off and on, contents of magnetic and optical disks is uncharged(unless is crashes)

- flash memory - nonvolatile and SOLID STATE- more robust than moving partts

Quantum computing

-quantum computer consisting of just 300 atoms would possess more sheer calculating power than a convential machine harnessing every last atom in the universe

- the largest conventional computer would need billions of years to figure it out

Internet of Things

describes a system in which everyday objects are connected to the internet and in turn are able to communicate information throughout an interconnected system

Microprossesor

the part of the computer that executes the instructions of a computer program

volatile memory

Storage (such as RAM chips) that is wiped clean when power is cut off from a device.

non-volatile memory

Refers to a kind of RAM that is stable and can hold data as long as electricity is powering the memory.

flash memory

Nonvolatile, chip-based storage, often used in mobile phones, cameras, and MP3 players. Sometimes called flash RAM, flash memory is slower than conventional RAM, but holds its charge even when the power goes out.

solid state electronics

Semiconductor-based devices. Solid state components often suffer fewer failures and require less energy than mechanical counterparts because they have no moving parts. RAM, flash memory, and microprocessors are solid state devices. Hard drives are not.

semiconductor

computer chips

price elasticity

rate at which demand for a product or service fluctuates with price change.

Microcontroller

Special purpose computers that dont have an operating system

Internet of Things (IoT)

A vision where low-cost sensors, processors, and communication are embedded into a wide array of products and our environment, allowing a vast network to collect data, analyze input, and automatically coordinate collective action.

Fabs

Semiconductor fabrication facilities; the multibillion dollar plants used to manufacture semiconductors.

multicore microprocessors

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

supercomputer

A computer that was the fastest in the world at the time it was constructed.

massively parallel

Computers designed with many microprocessors that work together, simultaneously, to solve problems.

grid computing

A type of computing that uses special software to enable several computers to work together on a common problem as if they were a massively parallel supercomputer.

cluster computing

Connecting server computers via software and networking so that their resources can be used to collectively solve computing tasks.

Software as a Service (SaaS)

A form of cloud computing where a firm subscribes to a third-party software and receives a service that is delivered online.

Cloud Computing

Replacing computing resources—either an organization's or individual's hardware or software—with services provided over the Internet.