exam 1 vocab Flashcards
Sarbanes-Oxley Act
Also known as Sarbox or SOX; U.S. legislation enacted in the wake of the accounting scandals of the early 2000s. The act raises executive and board responsibility and ties criminal penalties to certain accounting and financial violations. Although often criticized, SOX is also seen as raising stakes for mismanagement and misdeeds related to a firm’s accounting practices.
Operational Effectiveness
Performing the same tasks better than rivals perform them.
Dense Wave Division Multiplexing (DWDM)
A technology that increases the transmission capacity (and hence speed) of fiber-optic cable. Transmissions using fiber are accomplished by transmitting light inside “glass” cables. In DWDM, the light inside fiber is split into different wavelengths in a way similar to how a prism splits light into different colors.
Fast Follower Problem
Exists when savvy rivals watch a pioneer’s efforts, learn from their successes and missteps, then enter the market quickly with a comparable or superior product at a lower cost before the first mover can dominate.
Inventory Turns
Sometimes referred to as inventory turnover, stock turns, or stock turnover. It is the number of times inventory is sold or used during a given period. A higher figure means that a firm is selling products quickly.
Resource-Based View Of Competitive Advantage
The strategic thinking approach suggesting that if a firm is to maintain sustainable competitive advantage, it must control an exploitable resource, or set of resources, that have four critical characteristics. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable, and (4) nonsubstitutable.
Straddling
Attempts to occupy more than one position, while failing to match the benefits of a more efficient, singularly focused rival.
Strategic Positioning
Performing different tasks than rivals, or the same tasks in a different way.
Sustainable Competitive Advantage
Financial performance that consistently outperforms industry averages.
Switching Costs
The cost a consumer incurs when moving from one product to another. It can involve actual money spent (e.g., buying a new product) as well as investments in time, any data loss, and so forth.
Affiliates
Third parties that promote a product or service, typically in exchange for a cut of any sales.
Brand
The symbolic embodiment of all the information connected with a product or service
Distribution Channels
The path through which products or services get to customers.
Economies Of Scale
When costs can be spread across increasing units of production or in serving multiple customers. Businesses that have favorable economies of scale (like many Internet firms) are sometimes referred to as being highly scalable.
Imitation-Resistant Value Chain
A way of doing business that competitors struggle to replicate and that frequently involves technology in a key enabling role.
Network Effects
Also known as Metcalfe’s Law, or network externalities. When the value of a product or service increases as its number of users expands.
Private
As in “to go private” or “take a firm private.” Buying up a publicly traded firm’s shares. Usually done when a firm has suffered financially and when a turn-around strategy will first yield losses that would further erode share price. Firms (often called private equity, buyout, LBO, or leveraged buyout firms) that take another company private hope to improve results so that the company can be sold to another firm or they can reissue shares on public markets.
Scale Advantages
Advantages related to size.
Value Chain
The set of activities through which a product or service is created and delivered to customers.
Viral Marketing
Leveraging consumers to promote a product or service
Porter’s Five Forces
Also known as Industry and Competitive Analysis. A framework considering the interplay between (1) the intensity of rivalry among existing competitors, (2) the threat of new entrants, (3) the threat of substitute goods or services, (4) the bargaining power of buyers, and (5) the bargaining power of suppliers.
Information Asymmetry
A decision situation where one party has more or better information than its counterparty.
Price Transparency
The degree to which complete information is available.
Contract Manufacturing
Outsourcing production to third-party firms. Firms that use contract manufacturers don’t own the plants or directly employ the workers who produce the requested goods.
Information System (IS)
An integrated solution that combines five components: hardware, software, data, procedures, and the people who interact with and are impacted by the system.
Logistics
Coordinating and enabling the flow of goods, people, information, and other resources among locations.
Personal Digital Assistants (PDAs)
Handheld computing devices meant largely for mobile use outside an office setting. PDAs were initially (nonphone) handheld computing devices, but sophisticated computing capabilities have now been integrated into other mobile device classes, such as smartphones and tablets.
Point-Of-Sale (POS) System
Transaction processing systems that capture customer purchases. Cash registers and store checkout systems are examples of point-of-sale systems. These systems are critical for capturing sales data and are usually linked to inventory systems to subtract out any sold items.
Radio Frequency Identification (RFID) Tags
Small chip-based tags that wirelessly emit a unique identifying code for the item that they are attached to. Think of RFID systems as a next-generation bar code.
Return On Investment (ROI)
The amount earned from an expenditure.
Value Chain
The set of activities through which a product or service is created and delivered to customers.
Vertical Integration
When a single firm owns several layers in its value chain.
Operations
The organizational activities that are required to produce goods or services. Operations activities can involve the development, execution, control, maintenance, and improvement of an organization’s service and manufacturing procedures.
Churn Rate
The rate at which customers leave a product or service.
Collaborative Filtering
A classification of software that monitors trends among customers and uses this data to personalize an individual customer’s experience.
Long Tail
In this context, it refers to an extremely large selection of content or products. The long tail is a phenomenon whereby firms can make money by offering a near-limitless selection.
Atoms To Bits
The idea that many media products are sold in containers (physical products, or atoms) for bits (the ones and zeros that make up a video file, song, or layout of a book). As the Internet offers fast wireless delivery to TVs, music players, book readers, and other devices, the “atoms” of the container aren’t necessary. Physical inventory is eliminated, offering great cost savings.
Bandwidth Caps
A limit, imposed by the ISP (e.g., a cable or telephone company) on the total amount of traffic that a given subscriber can consume (usually per each billing period)
Disintermediation
Removing an organization from a firm’s distribution channel. Disintermediation collapses the path between supplier and customer.
Fixed Costs
Costs that do not vary according to production volume
Marginal Costs
The costs associated with each additional unit produced.
Internet Of Things
A vision where low-cost sensors, processors, and communication are embedded into a wide array of products and our environment, allowing a vast network to collect data, analyze input, and automatically coordinate collective action.
Moore’s Law
Chip performance per dollar doubles every eighteen months.
Random-Access Memory (RAM)
The fast, chip-based volatile storage in a computing device.
Flash Memory
Nonvolatile, chip-based storage, often used in mobile phones, cameras, and MP3 players. Sometimes called flash RAM, flash memory is slower than conventional RAM, but holds its charge even when the power goes out.
Microprocessor
The part of the computer that executes the instructions of a computer program.
Nonvolatile Memory
Storage that retains data even when powered down (such as flash memory, hard disk, or DVD storage).
Optical Fiber Line
A high-speed glass or plastic-lined networking cable used in telecommunications.
Price Elasticity
The rate at which the demand for a product or service fluctuates with price change. Goods and services that are highly price elastic (e.g., most consumer electronics) see demand spike as prices drop, whereas goods and services that are less price elastic are less responsive to price change (think heart surgery).
Semiconductors
A substance such as silicon dioxide used inside most computer chips that is capable of enabling as well as inhibiting the flow of electricity. From a managerial perspective, when someone refers to semiconductors, they are talking about computer chips, and the semiconductor industry is the chip business.
Solid State Electronics
Semiconductor-based devices. Solid state components often suffer fewer failures and require less energy than mechanical counterparts because they have no moving parts. RAM, flash memory, and microprocessors are solid state devices. Hard drives are not.
Volatile Memory
Storage (such as RAM chips) that is wiped clean when power is cut off from a device.
Fabs
Semiconductor fabrication facilities; the multibillion dollar plants used to manufacture semiconductors.
Multicore Microprocessors
Microprocessors with two or more (typically lower power) calculating processor cores on the same piece of silicon.
Silicon Wafer
A thin, circular slice of material used to create semiconductor devices. Hundreds of chips may be etched on a single wafer, where they are eventually cut out for individual packaging.
Supercomputers
Computers that are among the fastest of any in the world at the time of their introduction.
Cloud Computing
Replacing computing resources—either an organization’s or individual’s hardware or software—with services provided over the Internet.
Cluster Computing
Connecting server computers via software and networking so that their resources can be used to collectively solve computing tasks.
Grid Computing
A type of computing that uses special software to enable several computers to work together on a common problem as if they were a massively parallel supercomputer.
Latency
A term often used in computing that refers to delay, especially when discussing networking and data transfer speeds. Low-latency systems are faster systems.
Massively Parallel
Computers designed with many microprocessors that work together, simultaneously, to solve problems.
Server Farms
A massive network of computer servers running software to coordinate their collective use. Server farms provide the infrastructure backbone to SaaS and hardware cloud efforts, as well as many large-scale Internet services.
Software As A Service (SaaS)
A form of cloud computing where a firm subscribes to a third-party software and receives a service that is delivered online.
E-Waste
Discarded, often obsolete technology; also known as electronic waste.
Bitcoin
An open-source, decentralized payment system (sometimes controversially referred to as a digital, virtual, or cryptocurrency) that operates in a peer-to-peer environment, without bank or central authority.
