BADM 350 Exam # 1 Study Guide Weeks 1-7Chapter 1: Setting the Stage: Technology and the Modern Enterprise1.1 Tech’s Tectonic Shift: Radically Changing Business Landscapes- In the prior decade, tech firms have created profound shifts in the way firms advertise and individuals and organizations communicate. New technologies have fueled globalization, redefined our concepts of software and computing, crushed costs, fueled data-driven decision making, and raised privacy and security concerns.1.2 It’s your Revolution- Recognize that anyone reading this book has the potential to build an impactful business. Entrepreneurship has no minimum age requirement.- The ranks of technology revolutionaries are filled with young people, with severalleading firms and innovations launched by entrepreneurs who started while roughly the age of the average university student.1.3 Geek Up—Tech Is Everywhere and You’ll Need It to Thrive- As technology becomes cheaper and more powerful, it pervades more industries and is becoming increasingly baked into what were once nontech functional areas.- Technology is impacting every major business discipline, including finance, accounting, marketing, operations, human resources, and the law.- Tech jobs rank among the best and highest-growth positions, and tech firms rank among the best and highest-paying firms to work for.Information systems (IS) jobs are profoundly diverse, ranging from those that require heavy programming skills to those that are focused on design, process, project management, privacy, and strategy.1.4 The Pages Ahead- This text contains a series of chapters and cases that expose durable concepts, technologies, and frameworks, and does so using cutting-edge examples of what’s happening in industry today.- While firms and technologies will change, and success at any given point in time is no guarantee of future victory, the issues illustrated and concepts acquired should help shape a manager’s decision making in a way that will endure.Chapter 2: Strategy and Technology: Concepts and Frameworks for Understanding What Separates Winners from Losers2.1 Introduction- Technology can be easy to copy, and technology alone rarely offers sustainableadvantage.- Firms that leverage technology for strategic positioning use technology to create competitive assets or ways of doing business that are difficult for others to copy.- True sustainable advantage comes from assets and business models that are simultaneously valuable, rare, difficult to imitate, and for which there are no substitutes.2.2 Powerful Resources- Technology can play a key role in creating and reinforcing assets for sustainable advantage by enabling an imitation-resistant value chain; strengthening a firm’s brand; collecting useful data and establishing switching costs; creating a network effect; creating or enhancing a firm’s scale advantage; enabling product or service differentiation; and offering an opportunity to leverage unique distribution channels.- The value chain can be used to map a firm’s efficiency and to benchmark it against rivals, revealing opportunities to use technology to improve processes and procedures. When a firm is resistant to imitation, a superior value chain may yield sustainable competitive advantage.- Firms may consider adopting packaged software or outsourcing value chain tasks that are not critical to a firm’s competitive advantage. A firm should be wary of adopting software packages or outsourcing portions of its value chain that are proprietary and a source of competitive advantage.- Patents are not necessarily a sure-fire path to exploiting an innovation. Many technologies and business methods can be copied, so managers should think about creating assets like the ones previously discussed if they wish to create truly sustainable advantage.- Nothing lasts forever, and shifting technologies and market conditions can renderonce strong assets as obsolete.2.3 Barriers to Entry, Technology and Timing- It doesn’t matter if it’s easy for new firms to enter a market if these newcomers can’t create and leverage the assets needed to challenge incumbents.- Beware of those who say, “IT doesn’t matter” or refer to the “myth” of the first mover. This thinking is overly simplistic. It’s not a time or technology lead that provides sustainable competitive advantage; it’s what a firm does with its time and technology lead. If a firm can use a time and technology lead to create valuable assets that others cannot match, it may be able to sustain its advantage.But if the work done in this time and technology lead can be easily matched, then no advantage can be achieved, and a firm may be threatened by new entrants.2.4 Key Framework: The Five Forces of Industry Competitive Advantage• Industry competition and attractiveness can be described by considering the followingfive forces: (1) the intensity of rivalry among existing competitors, (2) the potential for new entrants to challenge incumbents, (3) the threat posed by substitute products or services, (4) the power of buyers, and (5) the power of suppliers.• In markets where commodity products are sold, the Internet can increase buyer power by increasing price transparency.• The more differentiated and valuable an offering, the more the Internet shifts bargaining power to sellers. Highly differentiated sellers that can advertise their products to a wider customer base can demand higher prices.• A strategist must constantly refer to models that describe events impacting their industry, particularly as new technologies emerge.Chapter 10: Understanding Software: A Primer for Managers10.1 Introduction • Software refers to a computer program or collection of programs. It enables computing devices to perform tasks.• You can think of software as being part of a layer cake, with hardware at the bottom; the operating system controlling the hardware and establishing standards, the applications executing one layer up, and the users at the top.• How these layers relate to one another has managerial implications in many areas, including the flexibility in meeting business demand, costs, legal issues andsecurity.• Software is everywhere—not just in computers, but also in cell phones, cars, cameras, and many other technologies.10.2 Operating Systems• The operating system (OS) controls a computer’s hardware and provides a common set of commands for