Innovator s dilemma why can t incumbent firms adjust to new technology BMGT301 Final Exam Study Guide 1 Platform model Mickey Mouse 2 3 Bullwhip effect 4 Platforms 1 vs 2 5 Secrets of Google success 1 Cost per click for highest grossing advertisements 2 Page Rank WTA 2 7 Disruptive Technology innovation that disrupts an existing market Disruptive at two levels o Product Level The new technology is superior to the old one Ex Steam boat Encarta Flash drive o Business Model Level technology The existing business model is NOT compatible with new Ex telegraph to the local exchange market Netflix Innovator s dilemma WHY EVEN LEADING COMPANIES FAIL WHEN FACING DISRUPTIVE TECHNOLOGY Staying close to your customers usually reaps competitive advantages o NO DEMAND FOR NEW PRODUCT o o But sometimes it can make your company obsolete o When it comes to discovering the Next Big Thing your best customers may be giving you the worst advice two levels of dilemma o don t see the market for the new technology want to please current customers new technology is not compatible with old technology you see the need for the new technology but cannot adjust because it is hard to change over Why can t incumbent firms adjust to new technology Sustaining technology advances to make incumbents stronger o o Disruptive technology advances to drive incumbents out of business o Why do incumbent firms miss the boat NO DEMAND FOR NEW PRODUCT o New technology comes from low end market not valued by mainstream customers Incumbent firms listen too much to their existing customers o Seek higher margins Target larger markets rather than small ones o Large establishing firms are almost always at the forefront of developing and commercializing new technologies as long as the technologies address the next generation performance needs of their current customers o However these firms are rarely in the forefront of commercializing new technologies that don t initially meet the needs of mainstream customers and appeal only to small and emerging markets 8 Database You should have a sense of what are field record table and database after the lab session and problem set o Table refers to a list of data ex product list customer information orders or purchases collection of rows records o database is either a single table or a collection of related tables o Field defines the data that a table can hold basically the titles for the columns in the table so for the customer table the fields would be First Name Last name address phone number birthday attributes of an entity o Record represents a single instance of whatever the table keeps track of Each row in a table ex you would have a record row of specific data information for each product you have to sell a collection of fields that describe an instance of an entity in customer table o Key the field used to relate tables in a database o DATABASE collection of tables each table is one entity of your business Relational database o How relational database link tables together Key the field used to relate tables in a database o Concept of primary key and foreign key Primary Key an attribute or group of attributes that uniquely identifies a row record in a relation Every record MUST have a primary key Foreign Key a non key attribute in one relation that appears as the primary key in another relation made to link data among multiple tables 9 The Digital Enterprise The history of business value of computers 1950 s to 2000s o 1950s But what is it good for I think there is a worldwide market for maybe 10 computers TJ Watson Sr First Supercomputer by IBM o 1960 early 1970s Back office automation IT Management Control costs First adopted by finance NYSE o Late 1970s early 1980s Enterprise Computing There is no reason for anyone to have a computer in their home Ken Olson Mainframe minicomputer used in calculating inventories o Mid 1980s Hustle your way to competitive advantage Competitive advantage through operational efficiency o Late 1980s First Interorganizational Systems EDI We now call this B2B eBusiness Improve Operational efficiency Lock in and network effects o Early 1990s Organizational Computing Reengineering Don t automate obliterate Computer supported collaborative work Changing boundaries of the firm o Late 1990s The promise and distraction of eBusiness Build up marketplace eBay Amazon Outsourcing web o 2000s Web 2 0 Quiz Time Magazine Person of the Year for 2006 You the people of the Information Age ERP no need to memorize just understand o ERP enterprise resource planning it is a system integrate internal and external management information across an entire organization automates and integrates everything o Major components UNDERSTAND o Why ERP is so popular integrating everything all the applications streamline simplify and standardize in order to cut costs Challenge How much is the most beneficial to standardize o Accounting Information Systems AIS collect process report and analyze information related to the financial aspects of a business events It can help reduce input errors more flexibility save duplicated work FASTER automate procedures support decision making Accountants are becoming information management professionals to add value to business give advice about efficient and effectiveness of information system Customer Relationship Management CRM online customer reviews o Operation CRM Customer facing applications such as sales force automation call center and customer service support and marketing automation o Analytical CRM application dealing with the analysis of customer data to provide information for improving business performance interpretation of data collected about customers o Basic Concepts of Data mining beer diaper Used to find hidden patterns and relationships in the customer data stored in the data warehouse For example marketers have discovered that when dads are going shopping for diapers and they see beer close to them it is most likely they will also purchase beer as well Supply Chain Management SCM o Three flows in supply chain Physical Product flow movement of goods from supplier to customer Information flow flows both ways transmitting orders and updating delivery status Payment flow credit terms payment schedules consignment and title ownership arrangements o Bullwhip effect What it is Demand fluctuation is amplified up the supply chain A type of information distortion What caused it Exaggeration of demand Why is it bad Higher production
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