HomeWork 4

Expotential Gains from Small Starts

The idea of giving money to people has always give us a warm sense of humanity especially for those in need. It is important to know that even giving a little to someone in need could provide surprising results. When Muhammad Yumus decided to give $27 to the poor people in Bangladesh to get avoid the cruel penalties of loan sharks, he didn't know he was doing a form of increasing returns. $27 in America is not a substantial amount to an individual but to the people in Bangladesh it is what we would consider a workers wage for a certain amount of time. However it must be taken into mind that unemployment and famine was happening during the 1970's. So it was hard to find/earn any kind of money especially of that amount without any type of loan.

Muhammad Yumus saw that when he had given the money to the poor people, it allowed them to kind of work for themselves and be somewhat independent. Yumus wanted to do this on a much larger scale, so he talked to the banks at the time to give out loans to the poor people. The Bank culture in Bangladesh in the 70's was not used to giving money to poor people. However once the loans were given out, the poor people were able to again work for themselves on a much larger scale. This in turn allowed more and more people to borrow(work to earn the money), and pay it back due to the previous people doing the same thing. Eventually the "poor" people were the ones to "own" the banks. This all started from the few small loans and eventually grew to a wide mass of people borrowing money and paying it back.

Smallest Human Capital

I also liked Yumus' part on just giving money to the poorest of the poor people for a set period of time. Giving to the people who need it mostwould to a majority of people seem to be a good idea. And it is not only financially and spiritually but also in a knowledge state of mind as well. Think about it, a final product just doesn't start from the middle man of assemblign and ends at the end with a associate selling to the customer. No it starts from the very beginning of the idea of the product. The idea comes from the person and starts the whole process of becoming a product and the rest is history. It is kind of the same idea for the people in Bangladesh. For the economy on the whole, the person at the bottom of the "economic ladder" is essentially the largest group. However that group is disregarded because they are not considered important and thought they wont' have any kind of affect on the ladder as a whole. Well give these people a chance(loans, information, education, knowledge) they will eventually band together and make something great. It goes to show that even the smallest thing has an affect on the entire chain as a whole. No matter the size.

Better than the Previous

Another highlight I enjoyed the the presentation is the idea of always being better than the previous. Yumus used the idea of parents and their children. In the past, parents of poor nations did not know how to read and write and were very uneducated. All they really knew how to do was work backbreaking labor intensive jobs, have kids to help with the jobs and repeat the process in which they were kind of stuck in these cycle. With the parents becoming less dependent on backbreaking labor and not requiring as much help from others, the children are allowed to attend school and better themsevles.

Well it is kind of the same thing with any kind of product, process, idea within any for profit business. For example, a company makes a certain kind of cellphone which in the first of it's kind. Well the 2nd generation or sequal of this phone should be better than the 1st generation and other imitators that happen to apear in the market. It humbles us a humans to allow the future geneations to be better than us. While products/services/ideas can not have the feeling of being humble, the peopel who created the first generation of whatever would want the second generation to be even better.

Sources:
http://www.youtube.com/watch?feature=player_embedded&v=LJvoSHdGgoA

HomeWork 3

How IBM creates and captures value through innovative technologies.

In the past 15-20 years the use of networks and web have made the spreading of ideas easier than ever. It is not until the recent motion/movement of Web 2.0 that allows emergencing technologies to grow like never before. Web 2.0 includes things such as Social Networking, service oriented business processes, and virtual worlds just to name a few. The use of Web 2.0 has changed the ways companies operate in order to acheive their mission statement. IBM is no different.

IBM is known for it's leaders in innovation, global trendsetting, the idea of being a "green company" and for it's many patents acquired by the company. IBM has over 400,000 employees worldwide including scientists, engineers, consultants, sales professionals and while not technically employees, customers are one of the most important informatin assets available. IBM has created the notion of Value 2.0 which gets it's name from Web 2.0. Value 2.0 has seven distinct rules that make for the best possible use of Web 2.0 technologies. Those rules are seperated into 3 categories:

Capitalize on new markets and business models

•RULE #1: Grab and monetize the long tail of demand.
~IBM has figured out that when customers want a particular product/service, they need to make sure that the market for it has a high and long demand. Which means that, the company needs to invest into something that many customers will want and that it is not just a fad or flavor of the month kind of thing.

•RULE #2: Customers value digital content.
~In the internet age today, many forms of entertain are digital. Music, Videos, Pictures, Games, Services, and even books. The idea of getting the most entertainment to the customers with as little "middle man" fees is the new standard. Having one create form of entertainment and being able to distribute it out to the whole world in such a short time gives not only IBM the edge, but any company that is willing to follow this rule.

•RULE #3: Virtual Worlds are real business
Making an alternate worlds has a large market. Having a world/dimension/place for people to go to get away from everyday life is becoming a big thing. Most notably in MMORPG(Massive Multiplayer Online Role Playing Game) customers are willing to pay money to have something they can not realistially touch or do in real life. The most well known form of an MMORPG is World of Warcraft. As of 2010, is has over 12 Million Players WorldWide. Another interestig note is that all players have to pay $15 dollars a month just in order to play the game. This does not include any of the "products/items" bought in the game itself. Even if all 12 Million players only played World of Warcraft for 1 month, it would rake in over $180 million in just subscription fees!


Get closer to markets and customers

•RULE #4: Information Accumulation through networking
~IBM knows that data/information on almost any subject in the world is easily accessible to anyone with an internet connection. IBM has used this to target and find out what customers want and what markets they are looking to spend their money on.

•RULE #5: Embrace customers.
~Once a company has a customer base not only is adding more customer important but keeping customer loyalty is important as well. Most customers tend to look for the latest and greatest and will not hesitate to "jump ships" if they feel they can get better service/products somewhere else.

•RULE #6: Use social networks to create solutions.
~The most common example would be typical FAQ(Frequently Asked Questions) but on a much bigger scale. IBM wants the world to know that it has solutions to many things and that once you find your solution spread the word that IBM has it. This in turn will create a ripple effect and will continue to grow.

Create new capabilities

•RULE #7: Embed flexibility in business models and information systems.
~IBM knows the importance of being "fluid" and adjusting to whatever is coming. Once a new idea has been put into place, they make sure that if something were to change or must be done differently it will be done quickly. Doing so gives IBM the notion of being "on the edge" and forefront on innovation.

•RULE #8: Foster rapid, collaborative innovation in the enterprise.
~IBM not only encourages it's employees to talk to one another but encourages it's customer base to talk to one another. The notion of spreading ideas around, will allow things to be bounced off of many different thinkings and produce many different views and opinions. IBM is known for it's culture of spreading ideas all around to be innovation driven.

Sources:
http://www-935.ibm.com/services/us/index.wss/ibvstudy/gbs/a1029189?cntxt=a1005266

Homework 2

PSP2(Next Generation Portable)

Sony has enveiled it's newest handheld device. This device according to Sony will have new features and supposedly have the power of the PS3! Some of the features include:

Bigger Screen
New Kind of way to play games(via mini flash memory cards instead of cd umd's)
Touch Screen
3G Portable gaming
Dual Analog sticks

Sony claims it to be the most innovative device that have released yet. Well I do not actually agree with Sony. Some of the features may be innovative in some aspects as compared to it's predessors(PSP and PSPGO) and may be even innovative than other hand held gaming devices(iPod Touch, Nintendo DS).

Starting with the bigger screen, while it is nice to have a bigger screen on anything nowadays, it is not really innovative.

The idea of having all games on flash mini memory cards is a step toward the future. Eventually all kinds of software will be downloadable and we no longer require a CD. Again not really innovative but a step forward.

Touch Screen, Sony's main handheld competitor is the Nintendo DS known for it's dual screens and touch screen capabilites. The fact that Sony is just not getting into the touch screen market is a sign that they are far behind in terms of market share. Sony better have some good games to go with it's touch screen or it may be considered an imitation of the Nintendo DS.

3G Portable gaming is probably Sony's way of getting a niche in the gaming market. The Next Generation Portable will be the first gaming handheld to have 3G. What does this mean? It means that gamers with the Next Generation Portable will be able to stay connected with one another without having to worry about a Wi-Fi connection. While the idea of 3G is not new, the idea of using it within gaming is pretty innovative.

The thing that will seperate the Next Generation portable from it's competition are the dual analog sticks. It has been a common complaint that many handhelds don't have the feel of a traditional controller. The new analog sticks will rest under the gamer's thumbs and give a sense of a traditional controller while still on the go. The Nintendo DS only has 4 buttom D-Pad, while the iPod touch as no hardware controls at all.


Overall-How well will gamers accept/buy the Next Generation Portable? Initially it was depend on the price upon launch and of course the games available presently and in the future. While on a whole Sony is moving forward concerning it's hardware progression but the move forward is small and if Sony want's to stay competitive it needs to continually innovate.

Sources:
http://blog.us.playstation.com/2011/01/27/next-generation-portable-ngp-all-the-early-details/







Sources:

Homework 1

Most everybody in this world can understand the idea of diseconomies of scale. According to dictionary.com diseconomies of scale is defined as follows ”Increase in long-term average cost of production as the scale of operations increases beyond a certain level. This anomaly may be caused by factors such as (1) over-crowding where men and machines get in each other's way, (2) greater wastage due to lack of coordination, or (3) a mismatch between the optimum outputs of different operations” which simply means that after a certain point making more of something is not worth it specifically from a money/financial standpoint. A very common example tends to happen in factories especially automobile manufactures. If a factory/building gets too big and there is too much overhead cost to cover the making of the automobile in such a large area. This and many other examples were just some of the problems with diseconomies of scale in the Industrial age.

Well I am going to write about something from the latest/newest age which some would call the Information Age. With the world becoming “smaller” and the emergence of the global village, people need to find ways to get back from their product/service then what they put in, whatever the resources (Time, Money, Technology, Ideas, etc.) must be gained back.

I enjoyed thinking about the equation (1+1>2). Mathematically the equation does not make sense. One(1) plus(+) One(1) Equals(=) Two(2), but the “equation” is not being looked at in the mathematical tradition but from a synergy view. For example think about 3 trucks being used to haul material. 2 of the trucks are exactly the same and both of those trucks towing capacity combined are equal to the towing capacity of the much larger truck. In theory people would think that both of the smaller trucks and the 1 big truck would do the same amount of work due to towing capacities being equal. However people have to remember that the material being hauled may not always come in nice easy to put in loads. Sometimes the big truck can only carry a certain amount at once due to height/weight/shape/restrictions, the two smaller trucks might be able to carry more due to the them having two trucks. An example of this situation would be trying to transfer 2 certain kinds of materials say a large reserve of drinking water and explosive chemicals for a construction site. Sure the big truck may be able to carry both of those things but it would not be safe/ethical to have both of those in the same truck. It should only have 1 material at a time, now the other trucks may be smaller, they are just big enough to fit each material whether drinking water in one truck while chemicals in another truck, so the two smaller trucks are getting more work done despite the fact that the two smaller trucks towing capacity is equal to the one larger trucks towing capacity.

The idea of getting more than one puts in or getting more of something as one makes more of it, traditionally defies the law of equivalent exchange. Equivalent exchange is defined as “People cannot gain anything without sacrificing something. You must present something of equal value in order to gain something. That is the principle of equivalent exchange in alchemy”, which is true however I am not talking about the gaining more than what I put it in essence of equivalent exchange. I am talking about the Increasing returns.
Increasing returns again stems from the idea of as you make/do/invest more of something it will eventually give back more than what you put it. There are many ways in which Increasing returns is being used today, the most common are in service, certain kinds of products, and software.

The example I’m going to use for service is the insurance business particularly car insurance. In a nutshell car insurance is where customers pay a company a premium to obtain “protection” if something were to happen to the car. From the insurance company’s viewpoint, if the company does not have a lot of customers and has a small market share, paying for all of the repairs from such a small pool of customer loyalty will be extremely expensive. However when a company increases its customer base and gains a broader market share, this is where increasing returns comes into play. With more customers and more money coming into the company repairs for the customer’s cards will be more widespread on the whole and thus will be more economical.

The example I’m going to use for certain kinds of products would be a vaccine or some kind of medicine. For example pretend there a new sickness out called the Z-Virus which causes many unpleasant effects such as vomiting, temporary blindness, loss of hearing etc. The Z-Virus is spreading all over the world and the new medicine called the Z-Fighter would only treat the symptoms and not really cure the patient. Well as time goes on, Doctors all over the world share their data/information and work together to help better the Z-Fighter. A doctor in America may only contribute a little bit of information/research concerning the Z-Fighter but once that research is made known to another doctor in say Japan, the Japanese Doctor maybe be able to make a groundbreaking discovery with that research which could not only treat the symptom but slowdown the growth of the Z-Virus cells. Over time the Z-Fighter will progress to the point where the Z-Virus is no longer a threat and everyone in the world becomes immunized to it.

The example I’m going to use for software is the famous World of Warcraft MMORPG(Massive Multiplayer Online Role Playing Game) before the game was released the MMORPG market was filled with good but not great games. A lot of resources were put in the making of the World of Warcraft. However once the game was finally finished and the first copy was made the cycle of increasing returns begins. The way it works, is that sure the first disc(Master Copy) took so much time/money/resources to make but making the second copy is practically free. The second copy and the many other copies made from the master copy, allow for the makers of the game to see their efforts increasing as sales go up. Every single sale of the game will eventually cover the cost of making the first copy and eventually turn into mass profits. This of course takes into account that the price of the game stays constant, but even if the price drops, increasing returns is happened due to every sale of the game is covering the initial costs/making profits.

References:
http://softwaretimes.com/files/increasing%20returns.html
Arthur, Brian V. "Increasing Returns and the New Business World." Harvard Business Review, July-Aug. 1996. Web. 26 Jan. 2011. .
http://www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/pt1ch3.html
http://www.urbandictionary.com/define.php?term=Equivalent%20exchange.