MOS 1033B Chapter 6: Technology and Cost Reduction

• MOS 1033B: Increases in Technology with Decreases in Costs for Winter 2025 is the focus of Chapter 6.

Course Content

• Topics to be reviewed include material from past weeks.
• Examples to build on include FreshDirect, TiVo, Gmail/Yahoo!/Hotmail, Intel & disruptive technologies, Intuit, 3D Printing, and Cryptocurrency & its fiascos.
• Information technology is pervasive and provides affordances to operations.
• Technology changes activities and organizations, sometimes radically and rapidly.
• Strategic planning is difficult, requiring analysis and definitions to identify management issues.
• Technology brings disruptive innovations that start without widespread value but become significantly valued.

Textbook Learning Objectives

• The learning objectives are greater than what the class can address.
• Students are required to ask questions and approach the objectives on their own
• Section 6.1 involves defining Moore's Law and its rate of advancement in technologies like magnetic storage and fiber-optic transmission.
• Section 6.1 also focuses on understanding price elasticity in relation to faster, cheaper technologies opening markets and catalyzing industry disruption.
• Section 6.1 also consists of recognizing terms for measuring data capacity.
• Section 6.1 concludes with the managerial implication of faster computing on planning, inventory, and accounting.
• Section 6.2 focuses on describing why Moore's Law advances, including its physical limitations.
• Also Section 6.2 Names and describes technologies that may extend the life of Moore's Law, as well as discussing their limitations.
• Section 6.3 focuses on understanding differences between supercomputing, grid, cluster, and cloud computing.
• Section 6.3 also focuses on describing how remote, distributed computing changes ideas about computing capacity.
• Section 6.3 also involves recognizing technologies that provide the backbone of remote resources in cloud computing.
• Section 6.3 also considers the suitability of problems for parallel processing and the limits of network latency in cloud computing.
• Section 6.4 involves understanding of environmental issues from rapidly obsolete, cheaper computing.
• Section 6.4's objectives are focused on explaining limitations in tackling e-waste.
• Section 6.4 also involves understanding risks when firms don't consider product lifecycles.
• Section 6.4 involves posing ethical questions about a firm's products and processes.
• Section 6.5 aims to illustrate Disney's value from embedding technology in manual experiences.
• Section 6.5 aims to recognize improvements of Disney World experience with technology.
• Section 6.5 also involves understanding the issues of deploying IT systems in a corporate environment.

Essentials and Takeaways

• Operating an organization is an exercise in resource management.
• Technology allows for more effective use of resources.
• Technology facilitates data gathering and management.
• Technology provides increased control of operations.
• Outsourcing offers access to external expertise and assets
• Externalities should produce commitments from the company.

Disney and Technologies

• Disney Bands are described as "The happiest bracelet on Earth!"
• Ibis World is the source of Disney's amusement park data.
• Amusement parks operate mechanical and water rides, games, and shows, and may lease space for private events.
• The industry includes admissions/rides, food, and merchandise sales.
• Competitors include arcades, non-hotel casinos, lotteries, and golf/family fun centers.
• Complementors include concerts and coffee shops
• Industry Characteristics :
  • Revenue: 29.9 billion USD (+4.4% CAGR last 5 years, +2.3% projected)
  • Employees: 182,000 (+1.1% CAGR last 5 years, +3.1% projected)
  • Businesses: 670 (+8.5% CAGR last 5 years, +5.5% projected)
  • Profit: 4.2 billion USD (+3.1% CAGR last 5 years, n/a projected)
  • Profit Margin: 13.9% (-0.9% CAGR last 5 years, n/a projected)
  • Wages: 6.7 billion USD (+3.3% CAGR last 5 years, +2.9% projected)
• Industry Structure includes :
  • Concentration: Moderate, Barriers to Entry: Increasing
  • Life Cycle: Mature, Revenue Volatility: Very High
  • Assistance: Steady, Competition: Increasing, Innovation: Moderate
• Parks invest in new attractions but must balance costs and financial risks.
• VR/AR are revolutionizing visitor experiences.
• Currently, Disney accounts for 27.1% of the amusement park revenue, or 81 billion USD
• Defunctland is a documentarian that provides interesting media on amusement parks.
• Jenny Nicholson is another documentarian who discusses Disney projects that are integrated with info tech.
• To manage capacity, Disney aims to keep parks "just full enough" to justify fixed costs and manage crowds using advanced predictions and scheduling.
• Additional challenges include corporate coordination of activities, IP integration, coordination with Disney hotels/cruise ships, and other communities.
• Pre-band Challenges:
  • Complaints over long lines, high ticket prices and poor customer satisfaction.
  • Half of first-time visitors said they would never revisit the park again
• RF technology is in use at Walt Disney World Resort for rides, parades, laundry, costuming etc.
• MagicBands and Key to the World cards can also be used to enter Disney Resort hotel rooms, and Disney World parks.
• Disney bands come in many shapes, colors and sizes.
• The bands connect to reservations, park admission, other plans and purchases.

Disney Bands

• Disney Bands make it possible to enter Disney parks.
• Disney Bands make it possible to unlock Disney Resort rooms.
• Disney Bands make it possible to make purchases.
• Disney Bands make it possible to access Lightning Lane entrances.
• Disney Bands make it possible to instantly link you photos.
• Disney Bands make it possible to enjoy nighttime spectaculars and find virtual bounties, Disney Fab 50 Character Collection sculptures throughout Walt Disney World Resort.
• There variety of designs and styles mean you can choose bands that show off personal expression!
• Original Band Features:
  • Room key, ticket, acts as payment, customizable appearance
• Current Band Features:
  • Adds interative elements, mobile App, no interactive elements, no room key
• Disney bands track park entries, where people go, and what they buy, and cannot be turned off like a cell phone.
• Bands lead to data on park capacity, consumer interest in attractions, and hotel use, while being potentially hackable with Disney-sided control.

Information Technology and Resources

• People achieve more working together compared to working alone.
• Working together is controlling how, when and what people do.
• Organizing requires information like goals, knowledge, and the power to act.
• Information tasks can be technology-assisted or offloaded.
• Key Questions :
  • If something is a responability, how much can you look away from it?
  • Are there consequences if you do?
• Technology changes what companies can do, which can disrupt the market entirely.

Other Key Points

• Emulation vs. Compiling (Challenges to accuracy and time to completion)
• Offloading saves time and resources, and helps give firms price elasticity.
• Centralization does different tasks in the same place, on the same machinery.
  • Results in time savings and cost savings
• Centralization leads to Data leaks and possible Single points of failure
• IT externalities encompass energy costs, pollution, waste, and global heating.
• Managers must proactively address waste associated with consumer use and disposal to stay ahead of legislators.
• Organizations should plan products' end-of-life and account for disposal costs as liabilities in financial reports.