BMGT301F Midterm Study Guide Information Goods Information good collection of symbols value from info it contains ex Books music movies reports Properties o Characteristics Infinitely replicable easy to distribute easy to store high fixed costs low marginal costs o Experience goods need to experience it to know how good it is o Variable valuations o Unique Intellectual Property Protection Characteristics of IP Info goods make them similar to public goods o Non rival one person s use does not affect the amount available to others o Non excludable costly to exclude people who do not pay o This leads to special treatment different from physical property rights Copyright 75 author 95 years company o Automatic does not require formal filing o Fair Use Purpose and character Nature of the copyrighted work Amount and substantiality of the portion of work used Patent 20 years o Must be approved o Exclusive rights Time limited because new innovation builds on old Need to balance protection with access Alternatives to Relying on IP Regulation Technical solutions Digital Rights Management DRM Subsidize creation of IP Alternative business models o Make the product look cheaper easier to buy o Look for alternative revenue streams advertising o Offer extreme customization o Reconceptualize the basic product service o Give away the product To define a good business model you need to understand your strategy Goal create sustainable competitive advantage by doing things in a unique way in the industry o Resource based view of competitive advantage Strategy Generic Strategies o Cost leader o Differentiation Horizontal build a better product Vertical position yourself in product space away from your competitors Value Chain tool for analyzing how activities fit together to add value and accomplish strategy o Virtual Value Chain gather organize select synthesize distribute INFO o o New customer relationships virtual activities are substituted for physical ones and parallel value chain in the virtual Increase visibility ability to see physical operations more effectively thru info Porter s Five Forces Model determines the relative attractiveness of an industry space evolves o Rivalry among competitors o Threat of new entrants o Threat of substitute goods o Bargaining power of buyers o Bargaining power of sellers Netflix Case Sources of Advantage Collaborative filtering o Customer returns are scanned an email is generated asking customer to rate it o Compare customer ratings o Recommend based on inventory Long tail o Web enables near zero cost dissemination about products o Enables easy searching for that info o Overcomes problems of limited shelf space and geographically distributed audience Database Fundamentals Why is info quality important Characteristics of high quality info Problems with poor quality info o Accuracy completeness consistency uniqueness timeliness security o Difficulty identifying valuable customers o Inability to identify selling opportunities o Marketing to nonexistent customers o Difficulty tracking revenue due to inaccurate invoices o Inability to build strong customer relationships Entity person place or event about which data info are collected column title Attribute category of data that describes an entity everything in the column Core Database concepts Instance of entity row in a table aka record o Database collection of tables files each table represents one entity o Table file list of data in columns and rows o Column field represent each category of data in a record o Row record represent a single instance of whatever the table keeps track of Relationships ER Diagrams o ER Diagram model the relationships among entities in a database Picture of people places objects characteristics relationships Communication tool Foundation for designing a database o Cardinality the number of instances of one entity type that are associated with a single instance of another entity type in a relationship Primary key attribute that uniquely identifies a row in a table Foreign key non key attribute in one table that appears as the primary key in another table Normalization a technique to make databases more efficient by removing undesirable redundancy o Problems Storage deficiencies Processing inefficiencies Errors Data integrity o Referential integrity foreign keys must match a primary key in the linked table and cannot be blank o Business rules examples order quantity cannot be negative phone number must have an area code
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