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MIS Test Review.docx

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Wilfrid Laurier University
Theresa Marcon

MIS Test2 Study Review Chapters 712 1415 25 multiple choice Cases Cisco Pearson Alvalade BICTC Technology note questions 5 marks Just pick one tech note and learn it Tech Notes for your section Two long answer questions 10 marks each Format Review Chapter 7Network Effects When network effects are present the value of a product or service increases as the number of users grows Simply more usersmore value Network effects are among the most powerful strategic resources that can be created by technology based innovation Many categorydominating organizations and technologies including Microsoft Apple NASDAQ eBay Facebook and Visa owe their success to network effects Network effects are also behind the establishment of most standards including Bluray WiFi and Bluetooth The value derived from network effects comes from three sources exchange staying power and complementary benefits ExchangeFacebook for one person isnt much fun and the first guy in the world with a fax machine didnt have much more than a paperweight But as each new Facebook friend or fax user comes online a network becomes more valuable because its users can potentially communicate with more people These examples show the importance of exchange in creating value Staying PowerNetworks with greater numbers of users suggest a stronger staying power The staying power or longterm viability of a product or service is particularly important for consumers of technology products Consider Complementary Benefits Complementary benefits are those products or services that add additional value to the network These products might include howto books software and feature addons even labour Moving early matters in network marketsfirms that move early can often use that time to establish a lead in users switching costs and complementary products that can be difficult for rivals to match Additional factors that can help a firm establish a network effects lead include subsidizing adoption leveraging viral marketing creating alliances to promote a product or to increase a services user base redefining the market to appeal to more users leveraging unique distribution channels to reach new customers seeding the market with complements encouraging the development of complements and maintaining backward compatibility Established firms may try to make it difficult for rivals to gain compatibility with their users standards or product complements Large firms may also create uncertainty among those considering adoption of arrival by preannouncing competing products Key Terms OneSided Marketa market that derives most of its value from a single class of users eg instant messaging SameSide Exchange Benefitbenefits derived by interaction among members of a single class of participant eg the exchange value when increasing numbers of IM users gain the ability to message each other TwoSided Marketnetwork markets comprised of two distinct categories of participant both of which that are needed to deliver value for the network to work eg video game console owners and developers of video games CrossSide Exchange Benefitwhen an increase in the number of users on one side of the marketeg console owners creates a rise in the other side software developers Technological Leapfroggingcompeting by offering a new technology that is so superior to existing offerings that the value overcomes the total resistance that older technologies might enjoy via exchange switching cost and complementary benefits Blue Ocean Strategyan approach where firms seek to create and compete in uncontested blue ocean market spaces rather than competing in spaces and ways that have attracted many similar rivals Convergencewhen two or more markets once considered distinctly separate begin to offer features and capabilities eg the markets for mobile phones and media players are converging The Osborne Effectwhen a firm preannounces a forthcoming product or service and experiences a sharp and detrimental drop in sales of current offerings as users wait for the new item
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