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market capitalizations/cap
the total value of a publicly traded firm - can be calculated by multiplying the number of a firm's shares by its current share price
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R&D (research & development)
the portion of a firm focused on innovation, typically pioneering advances that will eventually arrive as new products and technologies
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microprocessors
the part of the computer that executes the instructions of a computer program
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server farms
a massive network of computer servers running software to coordinate their collective use - they provide the infrastructure backbone to SaaS and hardware cloud efforts, as well as many large-scale Internet services
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sustainable competitive advantage
financial performance that consistently outperforms industry averages
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operational effectiveness
performing the same tasks better than rivals perform them
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commodity
a basic good that can be interchanged with nearly identical offerings by others
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fast follower problem
exists when savvy rivals watch a pioneer's efforts, learn from their successes and missteps, then enter the market quickly with a comparable or superior product at a lower cost before the first mover can dominate
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augmented-reality
a technology that superimposes content, such as images and animation, on top of real-world images
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strategic positioning
performing different tasks than rivals, or the same tasks in a different way
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resource-based view of competitive advantage
the strategic thinking approach suggesting that if a firm is to maintain sustainable competitive advantage, it must control an exploitable resource or set of resources that have four critical characteristics (valuable, rare, imperfectly imitable, nonsubstitutable)
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dense wave division multiplexing (DWDM)
a technology that increases the transmission capacity (and hence speed) of fiber-optic cable - transmissions using fiber are accomplished by transmitting light inside 'glass' cables - in DWDM, the light inside fiber is split into different wavelengths in a way similar to how a prism splits light into different colors
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imitation-resistant value chain
a way of doing business that competitors struggle to replicate and that frequently involves technology in a key enabling role
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value chain
the set of activities through which a product or service is created and delivered to customers
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straddled
in strategic management, this refers to a firm's attempt to occupy more than one position, while failing to match the benefits of a more efficient, singularly focused rival
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brand
the symbolic embodiment of all the information connected with a product or service
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viral marketing
leveraging consumers to promote a product or service
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scale advantages
advantages related to size
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economies of scale
when costs can be spread across increasing units of production or in serving multiple customers - businesses that have favorable economies of scale (like many Internet firms) are sometimes referred to as being highly scalable
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switching costs
the cost a consumer incurs when moving from one product to another - it can involve actual money spent (e.g. buying a new product) as well as investments in time, any data loss, and so forth
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network effects/Metcalfe's Law/network externalities
when the value of a product or service increases as its number of users expands
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distribution channels
the path through which products or services get to customers
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bundling
selling products available separately as a single package - can be especially effective when a software product or service is included with a hardware product - can also be tricky as it can raise a risk of unfair competitive practices, especially if a firm has a monopoly or otherwise large amount of market control
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APIs (application programming interfaces)
programming hooks or guidelines published by firms that tell other programs how to get a service to perform a task such as send or receive data - for example, Amazon provides these to let developers write their own applications and websites that can send the firm orders
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affiliates
third parties that promote a product or service, typically in exchange for a cut of any sales
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non-practicing entities (NPEs)/patent trolls
these firms make money by acquiring and asserting patents rather than bringing products and services to market
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Porter's five forces/Industry and Competitive Analysis
a framework considering the interplay between (1) the intensity of rivalry among existing competitors, (2) the threat of new entrants, (3) the threat of substitute goods or services, (4) the bargaining power of buyers, and (5) the bargaining power of suppliers
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price transparency
the degree to which complete information is available
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information asymmetry
a decision situation where one party has more or better information than its counterparty
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digital transformation
Improved Data Management, the Internet of Things, and AI created this business revolution
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Internet of Things
low cost sensors processors and communication are embedded in a wide array of products and our environment
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patents
US law that provides some protection from copycats attempting to identically mimic products and methods
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Moore’s Law
chip performance per dollar doubles every 18 months
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unstructured data
sensor data and video are examples of this type of data
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strategy
a set of decisions made to achieve competitive advantage
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competitive advantage
the ability of a firm to outperform its competitors in financial measures
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five components of the value chain
inbound logistics, operations, outbound logistics, marketing and sales, support
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secondary elements of the value chain
firm infrastructure, human resource management, technology/research development, procurement
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five domains of digital transformation
customers, competition, data, innovation, value
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