lecture 6

Question 1

technical development

what do we know about technological development so far

Answer 1

• its related to - advances in and global spread of info, communication and trasnport technology
• and speed and frequency of technological changes

Question 2

economic globalisation

Answer 2

global presense of business
intergration of financial instittutions
emergence of international competition

Question 3

poltical glob

Answer 3

distibution of poltio economic power
loss of nation sov
presense of global instutions

Question 4

cultural glob

Answer 4

more frequent exchange of cultture though cheap travel, tv network and communication
increased trade of cultural goods

Question 5

technoligcal glob

Answer 5

globa communication technologies
global trasnpor tech
speed and freuwncy of technoligcal changes

Question 6

global communication and trasport technology

Answer 6

• Decreasing costs, increasing integration and interdependence of countires, influence business and daily life
  
  • Decreasing costs of transport also enabled people to travel more, especially with the development of low cost airline business model
    Combined with decreasing costs of communication, this enabled easier and greater exchange of cultural goods

Question 7

speed and frequency of technical changes

Answer 7

• Demand cycle - the existence of a specific customer need/ demand
  
  • Demand technology cycle - existence of a specific technology used to satisfy the customer need
    Product cycle - existence of different products developed by a certain tech to satisfy that need

Question 8

two examples of markets undergoing a life cycle

Answer 8

• demand; communication
• tech; landline, mobile, smart
• products; ericsson phonees, sony ericsson moblie phone, iphones
• demand ‘save the moment’
• tech; analog, digital , inteegrated

Question 9

distruptive tech I

How global tech environment, or tech globalisation affects business and marketing operations

Answer 9

Disruptive technology; from the perspective that managers needed to focus on (2008);
Radio frequency identification (RFID)

Question 10

Distruptive tech II

Answer 10

• Quantum computing; revolutionizing research to financial markets
  
  • Extended reality XR; changing entertainment, training and remote work with VR, AR, MR
  • AI and advanced machine learning; disrupting industries from healthcare to finance
  • Innovation in biotechnology; using CRISPR for treating genetic disorders
  • 5G and advanced networking; faster, reliable internet catalyzing loT and autonomous vehicles
    Decentralized finance (DeFi) and blockchain; transforming finance and supply chain

Question 11

online shopping
digital rev

Answer 11

• We are looking at shopping without shops, who began this?
  
  • Amazon was founded in Washington July 1994
  • But it was by no means the first company to provide shopping without shops
  • In November 1873 Montgomery ward issued a mail order catalogue for the large population of middle class families in the rural mid west of the USA, Montgomery Ward had no shops, just a huge warehouse and fulfilment centre
  • Its slogan; satisfaction guaranteed or your money bank
  • Small towns in the mid west were prosperous but distance were great, each town had a store or 2 stocking a narrow range of goods at high prices. Montgomry ward worked in one
  • Before he was 30 he lauched his mail order catalogue business, one critical feature was that if you didn’t like what you has ordered you could return it you paid when you received the goods
    It was hugely successful, transforming life in the us mid west its said that both the US postal service and the us highway systems had to improve to satisfy demand from mail order

Question 12

the digital rev

Answer 12

• Can we focus on this concept - ‘ satisfaction or your money back?’
  
  • This was the killer app of 1887, it allowed Montgomery ward to beat in open competition, all the retailers in the mid west during the 19th century and it’s a core part of the offering of Amazon and other digital retailers
  • Finacially what does it mean
  • Means that everytime a consumer opens the packaging looks at product and then decides they don’t like it that product has to be sent back (a cost) the order has to be reviewed at head office (a cost) and the product is either repackaged ( a cost) or thrown away ( a cost)
    On the face of it this sounds like a disastrous way to do business

Question 13

tesco case study

Answer 13

In prevous lectures looked at the financial statements of retailers, shows the most recent tesco P&L
The total revenue is 63.9 billion and costs are 59.7 billion, giving a gross profit of 4.1 billion
- To understand how mail order companies can afford to throw away items of stock, we need to understand how much it costs a company to buy its stock. Can we see, from its accounts, how much it costs tesco to buy the stock it sells
- We already have a rough guide; discussed in prevous lecture if your selling to a supermarket and you want your product to be on the shelf at £10 you should expect to sell it to the supermarket at roughly £5 they need a 50% mark up to make a profit
- Means half of tescos rev is the cost of stock, half of 63 bill is 30
- Annual report shows they owed their suppliers 9.7 bill at the year end If theey pay their bills after 3 months then 9.7 billiom is the cost of 3 months of stock - means that their cost of stock about 30 bill which confirms our assumption
- Say Mntogmery ward has to throw away 1 in 50 items the cost of throwing them away is 25%of 50% which is only 1% of the entire sales income

- The cost of throwing away goods that the customer rejects is tiny 

- Look at same idea for Tesco, imagine it sells the same amount but without shops we can construct a P & L USING THESE ASSUMPTIONS; 
- It generates the same rev 
- It pays the same for stock but since it has no shops its running costs ar halved
- Its admin cost stays the same 
- Its finance income stays the same 
- It pays tax at 25%

- Its not real but effect is big  If tesco could sell the same amount of goods with no shios its profits would be 10x bigger

Question 14

influencee of tech on business - companies

Answer 14

• New achievable digital technologies; AI, the internet of things, additive manufacturing (3D printing) and blockchain
  
  • Benefits; easier entry and increased product diversity, easier for firms to produce, promote and distribute their products at a lower cost
    International trade costs declined by 15% between 1996 - 2014 and are expected to be further reduced

Question 15

govt control of digital world

Answer 15

• Security of on line payments - fraud
  
  • Privacy in online advertising
  • Other misuse - computer misuse act 1990
    Privacy - general data protection regulation act was brought in may 2018 on the european union level - mainly for protecting personal data and prevent data breaches