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BU111Exam Review Note Technological Factor .docx

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Department
Business
Course
BU111
Professor
Sofy Carayannopoulos
Semester
Fall

Description
Chapter 5 ---Technological Factor Technology • Advancement in equipment and its uses • Often substitutes for magnifies human efforts • Includes human knowledge, work method, equipment, business processing system. Includes Information Technology • The various devices for creating, storing, exchanging and using information • Consumers use it daily (ie. ATM, online shopping) • Company use it to gather ad share information and execute activities Come From? –Human ingenuity • Formal and informal research and development • Basic R and D—knowledge without focus • Applied R and D—specific problem in mind • Technology transfer out of the lab and into the world, turn research into action Opportunities 1) It improves products: •Innovation  Technology make production more easier •Uniqueness  Technology allows firms to come up with new product • Value 2) It provides better management process a) Instant access to information o Networks enable information linkages between employees o e.g. Sales / profit information o Instant access to information for decision-making and increased responsiveness b) Better service through coordination o Deliver information faster (when/how they want it) c) Leaner(简简) and more efficient organization o Reduce cost and labour o Reduce human errors o Can work from remote locations at any time. d) Improved operation efficiency o Ex: CAD-Computer Assisted Design o Ex: ERP- Enterprise Resource Planning e) Greater independence of company & workplace o Globalization o Not necessary to work at workplace, work can be done at home o Information is accessible, which reduces the need to ask other employees for it o Able to response any time 3) Competitiveness (when you are in keep other out) o Create barriers to entry o Cooperation with other firms o Align with your suppliers o Reduce cycle time (how quickly operating business) o To share resources o To create barriers 4) Communication and Collaboration o Within firm and customers o Affect decision making, help making a better and quicker decision o TV ads, more visual, better impacts 5) Customization o Competitive advantage o Information technology can let customer tell the firm how they want their product and how to make them better. How to provide new business opportunities o Reaching clients in a new or improved way (all possible through the advancements in tech.) o Businesses get consumers attention through the internet. Ex: e- bay Threats 1) Imitation o Information costly to develop but cheap to share/copy 2) New Technologies in Unfamiliar areas o Disruptive technologies challenge the value of organizational capabilities and resources o Some company may not have any knowledge of a new technology, which results in cannot compete with other companies 3) Unpredictable Evolution o Technology/ product are evaluating, no one can predict where the evolution will end. o VHS vs. BetaMax o Blu-Ray vs. DVDs 4) Company need for constant learning and scanning o Keep up with the new technology come out onto the market 5) Information Overload o Client information o How to store/use/analyze it. o Information about the company and market 6) Greater Independence of Company & Workplace o Manages don't how to turn off the boundary. Important Technology Terms (Description, importance, example) 1. Installed User Base o Define: # of users that are using a particular standard/technology o Importance: Bigger installed based = greater influence. The industry follows the change of bigger installed base. o Ex: DVD has a in store space, large in store space have a large influence 2. Lock-in - size of investment o Define: size of investment that put into a particular standard/technology o Importance: Larger lock-in = greater resistance to switch to another standard. o EX: Size of the cost of your investment in that standards, such as house, it’s hard to buy another one. It takes to owner this part of that technology, such as PC gamer. 3. Switching Costs (not only limit to financial also time and etc.) o Define: cost of moving to a new standard o Importance: make lock-in worse, create entry barrier for technology o Ex: money, habits, knowledge, entry barriers, and time that spends in learning how to use a new standard 4. Complementary Goods o Define: needed for value;creates negative or positive cycle (virtuous cycle) o Importance: more complementary goods of a technology can drive more user to use this particular technology needed for product to have value.  Additional value to enhance your value. o Ex: New smart phone system come out to market, virtuous cycle: fewer apps, no consumer willing to purchase cause no installed base and small market, and because market is small, no programmer wants to write app for that system. 5. Network Effects o Define: sometimes, the value of a technology may depend on the number of users that are using this technology o value depends on numbers of user. o Ex: Facebook, we use it because they’re so many people also using it. Key Assets & Strategies to Win Technology Standard Wars • Control over installed base of users (Large Installed Base: the more people you can get to buy your product, the better off you are, which creating brand loyal customers, the more control you have, the more ability to build up the in store space) o First-mover advantages (preemption 抢抢抢抢) Take the bigger market share. (Hard to achieve, preen your competitors, you need to become the standard before everybody else come in, so you need to build the product fast) o Expectations management Manage the expectation of users. e.g. the specific date that your product will update, which could catch up the new features of the similar technology. This can let users keep using this particular technology. (new innovation, make announcement when you need more time for new version) o Offer customers a migration path Some improvement of your product, which reduces the difference between your technology and your competitor, before you innovate any new technology. This means some small changes to improve your technology (you know if you have to change quickly, but difficult tech may customer want to exchange it because it’s hard to understand and get used to it, such Facebook, show you what your Facebook going to be changed later, company help them and guide them into the new update) • Intellectual property rights (patent) o Slows imitation or requires cooperation o Patent, copy rights, trade marks • Ability to innovate o Stay on your guard o Be open-minded o A potential improvement that creates market value. • Strength in complements o Use alliances (e.g. black berry of
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