Exam1 Flashcards
(32 cards)
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.
