Questions and Answers
What are the three characteristics of innovations that deliver longer lasting and sustainable competitive advantages?
Unique products or services based on customer data, heavy customer investment in terms of time/money, high switching costs.
What differentiates sustaining innovations from disruptive innovations?
Blindly following customer feedback is always beneficial for managers.
False
What is freeconomics?
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Which of the following are examples of applying freeconomics for competitive advantage?
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How does Google make money despite providing many free services?
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In the context of freeconomics, a service's sale price is reduced to sell something else of value. This is called a ______.
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What is one example of a labor exchange in freeconomics?
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In disruptive innovation theory, what happens to low-end products as product capabilities improve?
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What is the role of resource-based view to achieve competitive advantage?
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What strategies do organizations typically adopt to counter competitive forces? (Select all that apply)
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What is freeconomics?
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What is the purpose of the Five Forces Model?
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What are the sources of competitive advantage?
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Resource heterogeneity means that resources differ from one company to another.
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Which of the following is an example of an intangible resource?
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What is operational agility?
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What is the dynamic capability perspective?
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A successful case of IT-enabled business processes is _____.
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What can hinder organizational agility?
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What are the two types of resources?
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Study Notes
Announcements
- Group project instructions accessible on Moodle; group formation deadline is 30/08/2024.
- Mid-term quiz format: paper-based, supervised, includes 25 multiple choice questions, total duration of 50 minutes, closed book.
- Quiz schedule: Wollongong on 29/08/2024 (11:40am - 12:30pm), Liverpool on 30/08/2024 (14:40pm - 15:30pm).
Competitive Advantage
- Competitive forces threaten profitability and growth; includes existing competitors, new entrants, substitutes, bargaining power.
- Competitive advantage refers to anything that enhances a company's edge, leading to increased market share and customer attraction.
- Competitive advantage sources: first-mover advantage, superior product quality, lower costs, enhanced customer value, strong brand reputation.
Understanding Competitive Advantage
- Essential for survival in the market; enables firms to outperform rivals.
- Can arise from cost efficiency, product differentiation, or superior service delivery.
- Companies must continually innovate to maintain competitive advantage.
Resource-Based View (RBV)
- Focuses on internal resources rather than external competitive forces to achieve competitive advantage.
- RBV emphasizes VRIO attributes: Valuable, Rare, Inimitable, Organized resources are key for success.
- Types of resources: Tangible (physical assets) and Intangible (brand reputation, intellectual property).
Impacts of Information Systems on Competitive Forces
- Information systems can help mitigate price competition, enhance service delivery, and manage supply chain efficiencies.
- Improves customer relationship management (CRM), inventory control, and responsiveness to market shifts.
The Five Forces Model
- Illustrates the competitive environment; firms must find niche markets where competitive forces are weakest.
- Highlights the importance of adaptability and dynamic capabilities in reacting to market changes.
Dynamic Capabilities and Organizational Agility
- Dynamic capabilities allow firms to innovate continuously, adjusting to market shifts, and maintaining competitiveness.
- Organizational agility requires reconfiguration of capabilities to respond to rapid changes in the environment.
Customer and Partnering Agility
- Customer agility involves leveraging customer feedback for product development and innovation.
- Partnering agility focuses on collaboration across various sectors to enhance knowledge and share resources.
Challenges of Innovation
- Innovation is fraught with difficulty; rapid technological changes can quickly render advantages obsolete.
- Disruptive innovations can redefine markets; established firms often fail to respond effectively to these innovations.
The Innovation Dilemma
- Sustaining innovations build on existing market trajectories, while disruptive innovations redefine them.
- Established firms that ignore disruptive innovations may lose market dominance due to their focus on existing customers.
Conclusion on Competitive Strategy
- Successful companies align technology with strategic business processes to meet competitive pressures.
- Understanding both the Five Forces Model and Resource-Based View is vital for developing effective competitive strategies.### Freeconomics Overview
- Freeconomics leverages digital technologies to offer free goods and services, aiming to create competitive advantages for businesses.
- Industries utilizing digital technologies are moving towards lower costs, potentially achieving a price point of free for consumers.
Financing Free Products
- Free products do not imply a lack of cost; someone is funding them, often leading to significant profits for companies.
- Example: Google generates revenue from advertisers whose links are clicked by users during searches.
Value Proposition
- The value proposition of a product encompasses more than just direct transactions between buyers and sellers.
- Google's value proposition includes a diverse ecosystem engaging multiple participants beyond just those making payments.
Strategies to Leverage Freeconomics
- Advertising: Free services funded by third-party advertisements (e.g., Yahoo banner ads, Google pay-per-click).
- Freemium Model: Basic services offered for free, with special features available for a fee (e.g., Flickr, Skype, Dropbox).
- Cross Subsidies: Reduced prices on one item encourage sales of another (e.g., free DVR with subscriptions, complimentary movie tickets with purchases).
- Zero Marginal Cost: Products delivered at essentially no cost, benefiting from economies of scale (e.g., iTunes for music, YouTube for video content).
- Labor Exchange: Customer use of services generates value for the company (e.g., Yahoo! Answers).
- Gift Economy: Platforms encourage collaboration and contribution without direct payment (e.g., open-source software, Wikipedia, Freecycle for secondhand goods).
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Description
This announcement provides details for the upcoming mid-term quiz, including the schedule and locations at Wollongong and Liverpool campuses. Ensure to bring necessary supplies and gather in your assigned groups for project work by the specified deadline.
