Exam1 Flashcards
Tight-Integration (Performance-Time Graph)
companies want to control all aspects of the production of a new product until the bugs have been worked out
Standard (Performance-Time Graph)
Standards – a company will develop standards for its products so that suppliers will know what the company wants specifically
Modularity (Performance-Time Graph)
new products will eventually evolve into modules (subsets), so that the developer can identify major pieces of the product
Thin integrators (Performance-Time Graph)
companies that duplicate modules identified and created by developers in order to make competitive products
Mashups
a mashup is a combination of technologies that the creator hopes will be received, and viewed as a disruptive technology. Usually mashups are not patentable items.
Product Price/Demand Curve for established technology
Products that are based on proven, and established technology respond to the classic demand curve where the cost decreases as volume increases
Product Price/Demand Curve for new technology
Tend to maintain their price levels even with increasing demand
Why are tech products not perfectly elastic?
- A disruptive technology does not respond to the typical curve, because it is the “only-game-in-town”; therefore, there is no incentive to reduce prices.
- An existing, sustaining technology (that is subject to the typical elastic demand curve) is subject to many sales channels, and availability over a wide area of needs; increasing demand may insulate the total market from price variations, and sometimes may actually cause the price to go up
Product Acceptability Test Categories
Functional Performance – solving the defined problem, and duration of lifetime
Acquisition Cost – price per unit, or new technology-defined price point
Ease-of-Use Characteristics – user interface
Operating Cost – power, batteries, etc
Reliability – throw away, depot repair, exchange
Serviceability – how long and how much to get unit back into service
Compatibility – does unit fit with other technologies in the overall system
Strategic Business Units
- It is a profit center, as opposed to a cost center;
- It belongs to some parent organization, such as a corporation, company, division, or directorate;
- It often has control over the revenues it makes, is often responsible for its own administrative expenses, e.g., benefits, insurance packages, and operating policies;
Joint Venture
- A new company is created by the union of resources from two or more other companies that see the benefits of combining efforts to bring a new product(s) to market;
- The JV is initiated with money, I.P., and space from the two contributors, and given a relatively free hand to pursue the stated objectives of the JV;
- The JV may even manufacturer, and sell its created product(s);
Why do Acquisitions usually occur?
The acquisition usually occurs because the purchaser either wants the technology, or recognizes that competition will be much more effective if a different company is positioned against other companies;
Ways to gain a business advantage:
Mashups Make, or buy, technology Performance-Time Graph Redefine costs of doing business Redefine management and organization Redefine marketing techniques Make maximum use of technology
Six Themes of Success
- Business Focus
- Consistent Priorities and related products. - Adaptability
- Flexibility and change acceptance - Organizational Cohesions
- Good communication and clear roles. - Entrepreneural Culture
- Small divisions
- Different funding channels
- Tolerance to failure. - Sense of Integrity
- Hands-on Top Management
- Awareness and involvement
Types of Disruptive Strategies
Operations: Efficient manufacturing.
Technology: Unique, non-obvious tool that provides a new capability or a new way of realizing an old capability.
Warranty and Servicing: Total replacement, Parts shipping, on call 24/7, etc.
The Low-Cost Provider
Company that competes on cost alone.
- In the Performance-Time Graph, the low-cost provider operates in the low end of the performance axis where oversold customers live;
- Products here are characterized as being “just-good-enough”
- The company does not have to have a degree of credibility;
The Differentiated Provider
The company competes on features, quality, or functionality;
- In the performance-Time graph, the differentiated provider operates in the high end of the performance axis where undersold customers live;
- Products here are characterized as being rich in features, and fully tested with high quality demanding high prices in the marketplace;
- The company has to have a reputation and a prior history with much credibility
The Focused Provider
The company competes on special attributes;
- In the performance-Time graph, the focused provider operates in the high end of the performance axis where customers with specialized needs live;
- Products here are characterized as being systems with unique or leading edge capabilities rich in features demanding high contract prices in the marketplace;
- The company has to have a reputation and a prior history with much credibility;
Value Added for the Focused Provider
- The buyer must submit clear specifications
- The metrics for the attributes must be exist, and the measurement technology must be available
- The buyer must understand the interdependencies of attributes and system performance.
- If all 3 items above exist, there can be structured technical dialogue which is referred to as a modular interface
- —There may be many modular interfaces within a system
Competition and Change
- Incremental changes favor the established, market leader(s), entrenched, or low cost provider
- Disruptive change favors the new entrants, entrepreneurs, nimble, or adaptable companies
Sustaining Technology Strategy
A sustaining technology strategy is not a viable way to build a new-growth business,
- It is a viable strategy, if it can shift one or more factors in the realm of competition, such as target market, cost of production, control of the operations process, pricing, etc.
- The competition will fight rather than flee if a company moves into an established market trying to capture competitors’ best customers.
- This assertion holds if the new entrant is large or small.
ROA
Return on Assets
- Synonymous with ROI in my circles.
- Measures company’s ability to generate profit.
- ROA = [Net Income]/[Total Assets]
LR
Liquidity Ratio
- Measure of a company’s ability to meet its short term debt obligations
LR = [cash + marketable securities] / [short term debt]
- Short term debt usually assume to be 2 years or less.
Debt-to-Equity Ratio
Indicates what proportion of equity and debt the company is using to finace it’s assets.
- D/E = [short-term + long term debt] / [stockholder equity + retained earnings]
- Stockholder Equity = [Total Assets] - [Total Liabilities]
- Retained Earnings = Earnings after tax profits not paid out as dividends.
Technology Evolution
- The initial phase of the technology takes off slowly, then begins to be refined rapidly, and finally trails off into a stable technology position.
- Follow-on technologies assume the same performance - time shape, and soon overtake the capabilities of the original product
- S shaped curve.
Incremental change favors…
the established, market leader(s), entrenched, or low cost provider
Disruptive change favors…
Disruptive change favors the new entrants, entrepreneurs, nimble, or adaptable companies
Increasing chance of success for small startup.
Develop a strategy that either incorporates, a disruptive business model, process, product/service, market focus, or all the above.
Incremental Innovation
refines and extends an established design
- relatively minor changes.
Modular Innovation
changes only the ability to make core design concept alterations
Architectural Innovation
linkage of an existing system is performed in a new way
Radical Innovation
establishes a new dominant design (disruptive technology)
