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BU111 FINAL > Technological factors > Flashcards

Technological factors Flashcards

1
Q

what is technology

A
  • equipment and material advancements

- information technology advancements

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2
Q

equipment and material advancements

A
  • assembly lines and being able to mass product
  • swiffer dust cloth vs ordinary cloths
  • reduce costs and improves perfomance –> robots
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3
Q

information technology advancements

A
  • devices and software

- cloud, data analytics, video calls

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4
Q

elements

A
  • internent
  • information technologies
  • materials and equipment
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5
Q

internet

A
  • affects buying, selling, communication
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6
Q

information technologies

A

affect information access, inter-firm cycle times

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7
Q

materials and equipment

A
  • not limited to computers and information (swiffer jest jet vs mopping)
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8
Q

significance (technological factors)

A
  • demands constant scanning and learning
  • changes sources of competitive advantage and barriers to entry
  • creates opportunities for new products and efficiencies
  • legacies/ compatibility make change challenging (the tech you already have needs to be compatible–> game systems)
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9
Q

key technology concepts

A
  • lock-in
  • installed base
  • switching costs
  • complementary goods
  • technology standards
  • network effects
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10
Q

lock-in

A

extent to which a customer is “committed” to a product or service
Larger = greater resistance to switch

Causes: habit (knows how to use it) or system(apple ecosystem), learning, (resistance to new learning) investment (game systems are a lot of money), switching costs
Size if investment
5 forces collaborate to increase profitability

Solution: lower switching costs, offer leap in performance

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11
Q

installed base

A
  • the number of users
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12
Q

switching costs

A

Entry barrier- makes lock-in worse
Switching costs occur when you walk away from an investment (that value) and how much the new investment is worth
Ex- Video game console
Have to buy the specific games that are compatible
Would have to purchase a whole new system which is expensive

Solution
Lower switching costs, offer leap in performance
Offer switch in → bring old product and get a discount
Ex- old cell phone to new provider
Lending products (renting/leasing) → makes switching costs lower

Porter’s 5 forces link
Locking switching costs - substitute lock in otherwise customer will go toward the cheaper product or harder to switch

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13
Q

complementary goods

A

Needed for value/ they add value
Software = complement of a computer
Computer and the apps→ it is only as good as the apps it is compatible with
Creates vicious or virtuous cycle

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14
Q

technology standards

A

enables compatibility of complementary goods
“Think” what can I do with that product → what other services can I access through that device”
Ex- mobile app platforma working for iOs and Android

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15
Q

network effects

A

Value increases as user base grows
Ex- any social media platform
Bars and parties

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16
Q

vicious/ virtuous cycle

A
  • availability of complementary goods
  • attractiveness to users
  • number of users (installed base)
  • attractiveness to producers of complementary goods
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17
Q

vicious cycle

A

Vicious- does not work in your favour

Few compliments, not appealing, small installed base

18
Q

virtuous

A

does work in your favour
A lot of complementary goods, increase the value (increase attractiveness to users), increase installed base

Ex- apple
Mobile platforms, cell phone networks that it is compatible with, apps (more complementary goods for particular tech
product the more attractive the product will be to users, since there is more value
number of users increases the installed base, larger market
producers of complementary goods, bigger the market the more attractive

19
Q

opportunities

A
  • Products- innovation, uniqueness, value
  • Improved information use, access and sharing
  • Competitive advantage; barriers to entry (air bnb, uber)
  • Customization
20
Q

threats

A
  • Imitation –> Information costly to develop bur cheap to share
  • New technologies and new entrants in unfamiliar areas –> Need new capabilities, resources and learning
  • Information overload and security
  • Disconnected employees and customers (harder to build opportunities)
21
Q

ksf

achieving financial performance

A 
o-
-Leaner organizations; do more with less
- Increase productivity 
- Lower costs
t
-Imitation: information = costly to create and cheap to imitate
22
Q

meeting customer needs

A 
o
-Decreases cycle time
- Faster and cheaper delivery 
- Increased efficiency
t
- Unpredictable evolution 
- Blockbuster and netflix
23
Q

building quality products and services

A

o
-Valuable mass customization
t
-New tech in unfamiliar areas can undermine your product’s value as they are a disruptive technology

24
Q

encouraging innovation and creativity

A 
o
- Increased workplace independence
- travel/ more ideas
t
When you aren’t constantly learning and scanning (kodak)
25
Q

gaining employees commitment

A

o
-Increased organizational comm​​itment (flexible hours, better work life balance)
t
-Lack of employee supervision/ oversight

26
Q

competitive advantage

A 
o 
-Efficiency and unique 
Innovative products
t
- imitation
27
Q

4 types of innovation and challenges

A
  • radical/ disruptive
  • architectural
  • modular
  • incremental/sustaining
28
Q

radical/ disruptive

A
  • significant structural challenge
  • significant knowledge and capabilities challenge
  • small firms have the advantage (since a lot of change needs to happen)
  • calculator compares to the slide rule
29
Q

architectural

A
  • easy knowledge/capabilities challenge
  • significant structural change
  • challenges the operations of the product –> not the knowledge
  • desktop computers compared to IBM mainframes
30
Q

modular

A
  • significant knowledge/ capabilities challenge
  • easy structural challenge
  • digital camera compared to film camera
31
Q

incremental/ sustaining

A
  • easy knowledge and capabilities challenge
  • easy structural challenge
  • image stabilizing feature added to digital cameras
32
Q

sustaining innovation

what they offer

A
  • improves products in expected ways
33
Q

sustaining innovation

example

A
  • Computer chips getting faster, more processing power

- updating smartphones every year

34
Q

sustaining innovation

- who they serve

A

mainstream, high-margin customers with enhancements in product functionality
Focus on meeting customer needs

35
Q

sustaining innovation

- who usually wins

A

Incumbents usually win (established companies)
Already have most of the knowledge needed to capitalize on the information
Already have the structure, brand name, assembly line, distribution channels

36
Q

disruptive innovations

- what they offer

A

Different performance attributes not valued by mainstream
When air bnb entered the hotel industry
Starts in lower performance segments, improves rapidly; enters the mainstream market

37
Q

disruptive innovations

- who they serve

A
  • new niche market
38
Q

disruptive innovations

- examples

A
  • Netflix

- block buster did not see it coming

39
Q

disruptive innovations

- cause large firms to fail

A
  • Starts in lower performance segments, improves rapidly; enters the mainstream market
  • Large companies do not pay attention in the beginning
  • Once incumbent firms notice, it is too late for them to do anything
  • New disrupting firms often win because it is difficult from incumbent firms to react because it is expensive for them to change their capabilities and knowledge
40
Q

why large firms sometimes fail

A
  • Organization structure and capabilities slow response time/ability to influence choice
  • Organizational processes weed out ideas that do not address current customer needs
    (Focus on satisfying mainstream customers
    Ignore new technologies
    Move to higher margin opportunities)
    Avoid small, uncertain, unfamiliar markers (managerial preferences→ usually avoid risk)
    (Niche markets that are small and financially unattractive
    Growth potential uncertain
    Lower profit margins
    Risk of being criticized if you fail)
41
Q

how large firms can avoid failure

A
  • Monitor outside your industry
  • Partner with young firms
  • Establish venture units
  • Design by JOB and not customer
42
Q

how small firms compete

A
  • Enter with a product or market that large firms do not care about
  • If it is not their mainstream- they are not interested or motivated
  • Do not do something that they are good at or can easily adjust to
  • Margins are too small or market is too small
  • Once you have generated more revenues, and are stronger they can take on the incumbents and move up in the market

BU111 FINAL (5 decks)

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