Ch. 2
.
Firms that leverage technology for
strategic positioning
use technology to create competitive assets or ways
of doing business that are difficult for others to copy.
（
ex. Which of the initiatives by Google is the most likely an
example of strategic positioning? Answer: Google developed Google Glass, a wearable technology with an optical
head-mounted display, which is the only one available in the market.
）
True sustainable advantage comes from assets and business models that are simultaneously
valuable, rare, difficult
to imitate
, and for which there are
no substitutes
.
competitive advantage
Value chain:
s a set of activities that a firm operating in a specific industry performs in order to deliver a
valuable
product
or
service
for the
market
..
e.g.
FreshDirect's suppliers, warehouse, and delivery trucks are tightly
built together to collectively deliver fresh food to customers in a timely way.
Switching cost:
the negative costs that a consumer incurs as a result of changing suppliers,
brands
or products.
Although most prevalent switching costs are monetary in nature, there are also psychological, effort- and time-based
switching costs,
e.g.
Netflix customers are unlikely to use a different online video streaming service because they
would have lost their viewing history and taste profile from Netflix.
Deferentiation
：
e.g. Apple's products are praised for their extremely beautiful design.
Economy of scale
：
is the cost advantage that arises with increased output of a product
,
e.g.
Walmart can enjoy an
extremely low price from its suppliers because it orders a huge amount of products from a single supplier.
Ch. 3. Zara:
Zara does not collect data from any of these sources
gather data: 1. Ask customers in stores. 2. tried but unsold items. 3. POS
Then use the data: 1. Rapid design (30k/yr vs. 4k @ big chains). 2. Quick to shelf (15 days, 12 times faster than
Gap). 3. Vertical integration, supply chain, just-in-time (twice-weekly shipments), logistics. 4. Limited production
run
e.g.
Zara’s IT expenditure is low by fashion industry standards and is also highly effectiven by targeting technology
investment at
:
gathering and analyzing data to predict which store should carry what inventory items
network effects
:
exchange:
people choose eBay over Yahoo! Auction because there are more sellers and buyers on the former.
Staying power:
A consumer chooses a life insurance policy from the largest insurance company in the country over
that from a small insurance company operating in only several states.
Complementary benefits:
Windows phones are less preferred by consumers because there are less apps available for
Windows phones compared to those for iOS and Android devices.
Swi
tching cost:
Most cell phone carriers charge a fee if a subscriber wants to terminate contract early.
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- Fall '15
- Vendor lock-in, network effects
