OBA 340 SHEET - Ch 2 Firms that leverage technology for strategic positioning use technology to create competitive assets or ways of doing business that

OBA 340 SHEET - Ch 2 Firms that leverage technology for...

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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

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