EXAM TWO STUDYGUIDE Moore s Law chapter 4 notes and slides 6 Questions What is Moore Law Why is it important in business Moore s Law is a phenomenon of faster cheaper computing Chip performance per dollar doubles every 18 months Dr Gordon Moore What is IS infrastructure Slides only IS Infrastructure is any type of basic facility or service It s the interconnection between basic facilities and services Facilities Data and Knowlege Software HR Hardware Informations systems infratsructure Networks SaaS Software as a service A new business model that Enables businesses to run software with little to no hardware Might create latency delay Resources allocated based on user needs Utility computing rented from external provider paid on as need basis storage server provider Supercomputers There are the world s fastest computers that are meant for one task at a time Examples include Watson Jeopardy possible medical uses Pixar uses supercomputers for animation process On Demand Computing Utility Computing Parallel Computing Connects serving computers via software and networking so that their resources can be used collectively to solve computing tasks via breaking down tasks into small elements Grid Computing A type of computing that uses a special software to enable several computers to work together on a common problem as if they were a massively parallel super computer Bit Coin Bit coin is an open source decentralized payment system that operates in a peer to peer environment without bank or central authority Benefits no transaction fees opens up possibility of micro payments international commerce privacy no authority Challenges Consumer benefit not that strong security concern value volatility of a bit coin ambiguous regulation Disruptive Innovation From the Chapter Two characteristics of Disruptive innovation 1 Set of performance attributes that existing customers do not value 2 Over time performance attributes improve to the point where they invade established markets Big firms fail because the markets don t initially look attractive startups have been at it long enough by the time new markets emerge Tactics to navigate potential disruptors build portfolio of options investigate nurture experimental efforts Price Elasticity Price elasticity is a measure of the responsiveness of demand or supply of a good or service to changes in price Ewaste E Waste the ever growing mountains of discarded tech junk Could be a potential business opportunity o Example Executive Recycling promises to recycle e waste properly Amazon chapter 5 notes and slides What cookies are Cookies are lines of identifying text assigned and retrieved by a given web server and stored by your browser Personalization Amazon uses cookies to personalize Dynamic Pricing Trying to find the optimal pricing level which changes based on inventor EX Paying for parking at a world series game vs parking elsewhere Amazon uses dynamic pricing based on customers previous purchases Inventory Turns Liquidly Problems CCC Acct Payable Inventory turns Amazon has a crazy good inventory turn of 40 meaning most inventory is sold before it gets to the factory by 40 days they take your order and barely ever possess the product before they send it to you Liquidity how much cash you have on hand CCC cash conversion cycle period between distributing cash and collected funds associated with a product At amazon a negative CCC is consistently reported meaning Amazon sells and collects money from customers weeks before they have to pay suppliers TAKEAWAY Amazon is efficient at managing cash Pillars of Success for Amazon 1 Large selection 2 Customer experience 3 Lower prices Strategies Innovation e commerce digital services AWS amazon runs most businesses websites Dynamic Pricing Design Thinking Personalization Economics biz model based on rev not profit More sq footage than 700 Madison Square Gardens Robots fetch products Warehouses Customer Focus Personalization Platform Leadership readings and slides What is a Platform Leadership A platform is a good or a system providing technological architectural that allows different types of users and complementary business partners to connect and benefit from the platform s base functionality A platform leader is an individual company start up that creates a platform What are the different strategic levers you can use to grow your platform Four levers of platform leadership 1 Scope of activities a What do we make in house and what do we leave for the complementors to make b Goal exclusive features c Ex apple does not make apps for android google makes apps for apple 2 Product technology a How much innovation is too much don t want to disrupt customers How fast to innovate 3 External relationships Collaborative vs Competitive a For long term effectiveness platform leaders must follow two goals simultaneously i Search for consensus with complementors about technical standards and how they interface with products ii Show the way by providing new complements produced in house if this is seen to be necessary 4 Internal Organizations a Relationships with complementors how to get complementors to make really cool things How do you dethrone other platform leaders Target an underserved segment of the overall customer base Leverage adjacent platforms to boost demand Differentiate product to meet emerging needs Expand the universe of potential partners by simplifying business What does the platform ecosystem look like model Network Effects chapter 6 notes Compatibility being able to take advantage of complementors they work with your platform Envelopment when one market attempts to conquer a new market by making it a subset component or feature of its primary offering Barnacles customers who are barnacles are tightly anchored to the firm Staying power the long term viability of a product or service Related to switching costs Greater users suggests strong staying power Congestion effect occur when increasing numbers of users lower the value of a product or service Switching costs the cost a consumer incurs when moving from one product to another Lock in another name for the concept of switching costs switching costs lock in the customers to their product service Metcalfe s Law synonym for network effects when the value of a product or service increases as its number of users expands Leapfrogging competing by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance