Friday, September 20, 2019
Organizational Behavior: A Case Study of PCCW Company Introduction With the numerous changes brought about by the surroundings, machinery, financial system, political affairs, and the general public, changes in the organization must be taken note of in order to deal with the varying demands of the workforce and the clients. In this output-oriented society and generation, every organization must have the skills, capabilities, endurance, and the strategies to be able to meet the demands and the needs of their market. As such, the continuous changes that organizations must undergo may be considered as their only edge in order to cope with the overall changes observed in the society. Thus, appropriate change management must be done in a company to effectively and efficiently facilitate and govern the changes needed by organizations. In the objective of PCCW for market extension, protect its position, and create strategic agreements with other Asian companies, it has borrowed greatly to finance the $38 billion bid for Hong Kong Telecom, which resulted to its debt of US$4 billion. Further decline of its performance is brought about by its lack of confidence in the debt repayment plans among stockholders (Darlington and Cooke, 2000), which contributed to its standing as the worst performing blue-chip company on the list of the Hong Kong Stock Exchange in 2002 and 2003 (PCCW, 2007). In addition to its debt and change in ownership and management are the increasing pressures of competition among the industry. It has been reported that in August 2000, there were 165 external telecommunications services operators and 187 Internet market service providers. The increase in competition led to another cause of the companys problems, which is the existence of monopoly for domestic fixed telephony. This became a major blow fo r the company, as many telephone operators no longer need the gateways and local networks provided by PCCW (Darlington and Cooke, 2000). Furthermore, another basis of its problems is the decrease of its staffs and labor force, which donate to the decline of its operations. An additional cause is the failure of the bid between the company and China, for at the time, China resisted to make consultation with a company that is allied to the Singapore government, which also became the basis of the problems of the Sing Tels bid in the past (Greenlees, 2006).Ã Additionally, the problem for the company is the generally failing revenues in Hong Kong, with its failure to make considerable advancement to the China mainland. With this, heavy investment in communications all through East Asia must be required before the full potential of PCCW can be appreciated (Darlington and Cooke, 2000). Ã External Change Driver The PEST Analysis sets up an efficient exploration of the peripheral impacts on a precise company by infringement of the components into indispensable and perceptible elements or factors. The obvious essentials under this type of analysis include Political, Economic, Sociological, and Technological elements. Political factors include the limitations in the policies of the Chinese government with regards to company consultations and mergers; the governments choice of companies outside the country, with which it would make discussions with; distinctive pre-eminence in Chinas legal system; influence of British legal system in Hong Kongs international financial transactions. Economic elements comprise the progress and underdevelopment of infrastructures in East Asia; telecommunications monopoly; debt of PCCW; dollar inflation and deflation rates; financial crises; crumple of asset prices; rate of economic growth. Sociological factors include PCCWs variance with customers that are major stockholders; unemployment; changes in communication, marketing and management; retaining separate superiority over human capital, language, rivalry and challenge. Effects of e-commerce to PCCW; improvement and enhancement of its website; operation and maximization of the Internet; faster negotiations, development of new ultra-modern tools, enhancement of RD through the Internet Internal Change Driver Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã One of the inner alteration drivers of PCCW is the change in its possession, along with the adjustment in its supervision and its executive culture. The culture was then distorted with the amendment in the personnel. Subsequent to the acquirement, most of the staffs working in CW HKT are now employees in PCCW. This led to the change in the customs of the company, from a conventional, seniority-based, and non-market driven, it twisted to a powerfully spirited, performance-based, and customer-focused company. Another internal driver is the modification in the companys main concern. The quality of service is now the companys primary alarm, and the company has been investing millions of dollars in excellence and customer service training. The third internal driver is the change in internal processes (Hatch, 2006). Such changes in internal processes include implementing diverse quality programs, including quality improvement teams and six sigma programs. These changes in the culture of the company brought about the companys reorganization procedure, for instance changing the divisions from a cost-center to a profit-center, thus, making all employees aggravated to make negotiations and business dealings (Cable and Wireless: Jobs Surveys, 2003). Ã In line with the companys agenda for change, several aspects in the organization can be taken note of, namely, its strategy, structure, processes, and people. In relation to its strategy, PCCW provides solutions for port management, security and CCTV systems, audio and visual solutions, and technical support and maintenance services to various sectors in the industry, such as governments, public services, aviation, and broadcast engineering operations. In addition, it re-entered the mobile market, collaborated with real estate and broadband companies, and improved its telephone directories. In terms of structure, the contribution of its large team of professionals, experiences and knowledge in the IT industry provide excellent ICT solutions that would help customers develop innovative and challenging business opportunities. In terms of processes, the company facilitates outstanding innovation, especially in terms of IP-based business services, New Generation Fixed Line services, broadband pay-TV, Internet access, media content, large-scale IT solutions, mobility, and wireless innovations. In terms of people, it has approximately 17,000 employees, located in different parts of the globe, including mainland China, South America, Japan, Korea, Thailand, Malaysia, Singapore, Taiwan, Europe, the United States, India, and the Middle East (Company Profile, 2008). Ã Assessment on the Style of Leadership/Management Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã As mentioned earlier, the management of PCCW was transformed from a conservative, seniority-based, and non-market driven, to a strongly competitive, performance-based, and customer-focused company. From this transformation alone, it can be stated that the style of leadership in PCCW is a Proactive style of leadership. This is because a proactive leader focuses on achieving performance outcomes of his or her team and shares a vision, which compels the team to move towards that vision or goal (Holmes, 2008). However, the presence of conflicts and resistance on the part of the employees may indicate that the type of leadership or management they experience from the company might not be sufficient to fulfill or satisfy their needs. Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã If PCCW Limited did not take any action regarding their problems, a domino effect of negative events would happen. Its debts would further increase, which would afford the company to sell their assets and resources in order to make up for the debts it have in other companies. Resignation of managers would also be another effect of a no change strategy. The increase in debts would lead to further loss of company assets, and later on, to further loss of human resources. Due to the lack of adequate resources and assets, there would the delay, inefficiency, and ineffectiveness of processes and operations in the company that would lead to the decline with the number of its customers, as becoming less satisfied. The loss of customers leads to the loss of profit, thus, resulting to bankruptcy and immediate closing of the company. Proposed Change Strategy Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã It has been identified that one of the problems of the company is the lack of infrastructure development in East Asia, which hinders the development of the company. With this, the company must not wait for the development of the region, but must try to find alternative solutions and materials that would suit its processes and the trend of infrastructure in Hong Kong. If the company is bold enough, it can initiate in setting the trend in the city in terms of infrastructure development, given the right resources and the right skills and expertise. In order to do so, the company can invest in its Research Development in its quest to find new supplies and materials. Another proposed change is the implementation of performance management strategies that would help develop and improve the overall performance of the organization. Since the management of PCCW has already been transformed into a performance-based management, performance management of the employees must be done in order to help guide them with their tasks and responsibilities in the organization. This is because performance management serves to focus the efforts and attention of employees in critical tasks using performance feedback (Bernardin and Russell, 1993). This would then allow the employees to gain more knowledge and develop new skills in relation to their work in the company. Another change strategy is the implementation and use of Information Technology or Information Systems, which would facilitate in the organization and information retrieval in the company and in effective communication. Through the use of an IT or IS, the company would be able to organize its customer database that would allow it to have an effective and efficient product inventory, customer follow-ups, and evaluate customer feedbacks for product improvement. Lastly, the organization can improve its operations strategies through the improvement of its supply chain. In the management of its supply chain, both the suppliers and the corporation would be able to have a successful and well-organized affiliation, thus, preventing the impediment of provisions and resources considered necessary by the organization (Robbins, 2004). Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã First and foremost, the realization of the change program would certainly elevate confrontation among the employees and managers of the organization. The sources and the apparent impacts of this resistance were already mentioned in the earlier discussions. Resistance to change of the employees leads to inflexibility and lack of support, ensuing to the delay of the change process and in internal processes and operations. Second issue to take note of is the differences in the preferences of the management and leadership styles of managers in the organization, consequential to varied inter-departmental cultures and practices. Due to such differences, employees would be having a rigid time dealing with other employees, which can be a promising source of conflicts. Third issue is the possibility of needing to lay off employees or reassigning them to new job positions that may require new skills, technologies, and knowledge. This may also le ad to grave threats and conflicts in the organization. Fourth issue is the need for reformation in the departments that may or may not be contributory to the welfare of employees. Fifth issue is the adequacy of resources, which would be essential in sustaining the needs of the company. Finally, the execution of new policies would be a concern for PCCW (Simon, 2007). Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã Ã From the argument, it can be apparent that in order for a company to experience and execute a change program, it must be proficient in taking note of different interior and exterior issues that would present an assortment of impacts to the employees and the performance of the organization itself. As such, an efficient organizational change process would consist of important elements including its external environment, internal processes and operations, the welfare of employees, the support of top management, and the satisfaction and demands of customers. Putting each constituent in synchronization and concord would perhaps guarantee a successful adjustment procedure.
Thursday, September 19, 2019
The United States recession (which lead to a world recession), began in 1997 and significantly impacted the United States automobile industry during the recession period. The United States automobile industry is still reeling from the effects of the recession throughout the period of economic recovery that continues today. According to Chu and Su, Ã¢â¬Å"In this credit-driven recession, one of the hardest hit sectors was the automotive industry, along with the housing and financial markets. Chrysler and General Motors were pushed into bankruptcy; and 276,000 jobs in the automobile and parts industry were destroyed, a whopping 36 percent of the total employment in the sectorÃ¢â¬ . This paper will focus on the future of the U.S. Automobile industry as the United States recovers from the worst recession we have experienced in the past 75 years. I will provide information on the following topics pertaining to the U.S. automobile industry: 1. Externalities that may shift the supply and demand curve over the next five years. 2. Factors creating value in the industry and factors that will most likely input demand in the future. 3. Cost and supply analysis. 4. Industry trends and factors changing the industry. 5. Potential of supply and demand curve movement over the next 5 years. 6. Market Structure. 7. Porter Analysis on the industry. 8. General Motors strategic considerations using the game theory concept. Market Externalities To properly illustrate externalities that may shift the supply and demand curve in the U.S. auto market over the next five years, it is necessary to look at the recent events having affected the U.S. auto industry during the recession and the strides U.S. auto makers have made to recover from near devast... ... If U.S. auto manufacturing takes a down-turn, the U.S. economy will be negatively impacted and the demand for automobiles in the U.S will suffer. If GM or other U.S. auto manufacturers fail, there will be greater opportunity for new entrants into the U.S. automotive sales industry. For these reasons, all manufacturers including GM that sell autos in the U.S. should continue to use a cooperative game theory strategy to ensure the industry recovers. GM should continue to use its technological advantages to create innovative automobiles, but do so cautiously. GM should follow the direction of todayÃ¢â¬â¢s environmentally conscious consumers who want less expensive, economical automobiles. GM should primarily utilize a cooperative game-theory approach in its sales and marketing strategies in order to stay in sync with the current automotive industry needs.
Wednesday, September 18, 2019
Comparison of London by William Blake and Westminster Bridge. "I wander thro' each chartered street," this is William Blake, walking slowly, almost lost, taking notice of everything he sees around him. By 'chartered' William Blake can mean two different things, he can mean wealthy and prosperous or he can mean streets that are chartered / charted on a map, this is better explained in the next line where he speaks of the 'chartered' Thames, giving us the impression that he is in fact speaking of the chartered / charted meaning. "Near where the chartered Thames does flow," the second line of the first verse sheds some more light on where William Blake actually is, he is on the 'streets' by the Thames -London. As London was quite small he is probably talking about the whole of London, not just a certain part. "And mark in every face I meet, marks of weakness, marks of woe," By weakness William Blake again mean two things, he can mean physical weakness resulting from starvation or hunger and the work they have done, he can also mean mental weakness, lack of hope or happiness and maybe lack of intelligence, as many people in those times in the poor/working class areas may not have gone to school. By 'woe' Blake can mean anguish and despair. Altogether William Blake states that all the people he meets are glum and/or sad. "In every cry of every man, In every infants cry of fear In every voice, in every ban The mind-forged manacles I hear" This is the second of four verses, and it describes what William Blake 'hears' as he 'wanders thro' each chartered street.' He states that in every mans cry, in every infants cry, in every voice and every sign he can see the limits set to the people by themselves in the mind and the lack of hope. The limits and lack of hope, I think, stem from the mental 'weakness' described in the first verse. "How the chimney-sweepers cry Every blackening church appals." I think that these two opening lines of the third verse have a lot of meaning. Chimney-sweepers were often young children who were forced to climb up/down chimneys to clean them. They often worked long hours and received little pay. Then William Blake mentions the 'blackening church' - a church is almost like a sanctuary for most people, but for the chimney-sweepers, there is no rest or sanctuary, no place to forget about there troubles, even the church needs to be cleaned, a place of purity is tainted and blackened ant the work goes on for the chimney-sweepers. "And the hapless soldiers cry Comparison of London by William Blake and Westminster Bridge. :: English Literature Comparison of London by William Blake and Westminster Bridge. "I wander thro' each chartered street," this is William Blake, walking slowly, almost lost, taking notice of everything he sees around him. By 'chartered' William Blake can mean two different things, he can mean wealthy and prosperous or he can mean streets that are chartered / charted on a map, this is better explained in the next line where he speaks of the 'chartered' Thames, giving us the impression that he is in fact speaking of the chartered / charted meaning. "Near where the chartered Thames does flow," the second line of the first verse sheds some more light on where William Blake actually is, he is on the 'streets' by the Thames -London. As London was quite small he is probably talking about the whole of London, not just a certain part. "And mark in every face I meet, marks of weakness, marks of woe," By weakness William Blake again mean two things, he can mean physical weakness resulting from starvation or hunger and the work they have done, he can also mean mental weakness, lack of hope or happiness and maybe lack of intelligence, as many people in those times in the poor/working class areas may not have gone to school. By 'woe' Blake can mean anguish and despair. Altogether William Blake states that all the people he meets are glum and/or sad. "In every cry of every man, In every infants cry of fear In every voice, in every ban The mind-forged manacles I hear" This is the second of four verses, and it describes what William Blake 'hears' as he 'wanders thro' each chartered street.' He states that in every mans cry, in every infants cry, in every voice and every sign he can see the limits set to the people by themselves in the mind and the lack of hope. The limits and lack of hope, I think, stem from the mental 'weakness' described in the first verse. "How the chimney-sweepers cry Every blackening church appals." I think that these two opening lines of the third verse have a lot of meaning. Chimney-sweepers were often young children who were forced to climb up/down chimneys to clean them. They often worked long hours and received little pay. Then William Blake mentions the 'blackening church' - a church is almost like a sanctuary for most people, but for the chimney-sweepers, there is no rest or sanctuary, no place to forget about there troubles, even the church needs to be cleaned, a place of purity is tainted and blackened ant the work goes on for the chimney-sweepers. "And the hapless soldiers cry
Tuesday, September 17, 2019
The increased imports of the European as well as the Japanese make of automobiles in the United States significantly impacted the demand of the automobiles manufactured by the US manufacturers. Ã¢â¬Å"Imports of sub-compact cars from Europe and Japan rose steadily in the 1950s, often as familiesÃ¢â¬â¢ second cars but US manufacturers retained their hold on the lucrative markets for larger vehicles. Ã¢â¬ (French, 1997, p142) The US manufactures saw their market shrink as the more aware and price conscious consumers shifted to the European and Japanese counter parts for their automobiles, while the US manufacturers were left with making large, excessive fuel consuming vehicles that denoted social status and personal style. Aside from this the increasing prices of crude oil in the international market in the 1970s also significantly changed the demand of the automobiles as depicted by the consumers. Ã¢â¬Å"A crisis in the US car-market developed as a result of sudden unforeseen shifts in the general environment which allowed overseas producers to expand market share rapidly. New car sales faltered in the 1970s and excess capacity increased. At the same time the leap in fuel prices shifted the consumer preference towards smaller, more fuel efficient cars which Japanese and European makers already supplied in their domestic markets and were better able to produce that were the US manufacturers used to making larger, more up-market Ã¢â¬Ëgas-guzzlersÃ¢â¬â¢Ã¢â¬ (French, 1997, p142) The automobiles of French and Japanese make were smaller, more fuel efficient as well as more stylish yet cheaper than the those manufactured by the big three US automobile manufactures. As a result the consumers opted for purchasing the imported cars instead of those manufactured by the Unites States manufacturers. The recession of the 1970s also further reduced the disposal income and the propensity to save for the people in the United States which made purchasing the imported European and Japanese models of automobiles much more attractive to the consumers instead of opting for those models manufactured by the big three US automobile manufacturers. In the same period the perception of the consumers also significantly changed as was marked by the baby boomer generation and the hippy era. In this period, the consumer became more aware of the environment, the increasing pollution and the contribution that automobiles made towards adding to the pollution levels. As a result the consumers started to look for cheaper alternatives of travel and those which were more environmental friendly that the vehicles manufactured by the big three US automobile manufacturers. The internal factors that contributed to the changing cost position of the Bridgestone Industries, specifically at the plant pertained to the decreasing demand of the US manufactured cars and increased demand for cheaper cars that was reflected un the restricting cost based purchases being made by the big three manufactures form the Bridgestone Industries. As the volume of sales decreased for Bridgestone Industries, along with the margin for profits on sales made due to the rising overhead costs the cost position of the Bridgestone Industries significantly changed to become negative and resulted in the closing of the automotive component and fabrication facility by the Bridgestone Industries. Overhead Burden Rate The Bridgestone Industries had a specific method for determining the overhead burden rate for the products that was proposed and set on an annual basis. Ã¢â¬Å"The budgeted unit costs provided by the plant for the 1987 model year study included overhead (burden) applied to products as a percentage of direct labor dollar cost. The overhead percentage was calculated at the budget time and used throughout the model year to allocate overhead to products using a single overhead pool. The overhead rate used in the study was 435% of direct labor costÃ¢â¬ (Patricia & Cooper, 1993) The following table depicts the overhead burden rate for the years starting 1987 through to 1990. Overhead Burden Rate (Ã¢â¬Ë000) 1987 1988 1989 1990 Total Overheads 107,954 109,890 78,157 79,393 Total Direct Labor Dollar Cost 24,682 25,294 13,537 14,102 Overhead Burden Rate 437 434 577 562 The analysis of the overhead burden that was determined for the years, 1987, 1988, 1989 and 1990 showed that the total over heads increased from 1987 to 1988. However in 1989, there was a drop in the overhead level as the muffler exhausts and the oil pan based product lines were merged with the other three product lines. This reduced the overheads significantly. In 1990 however the trend shows that the overheads for the Bridgestone Industries increased again on an annual basis. The direct labor dollar cost showed a similar trend as well reflecting the increasing expenses along with the effect that the closure of the muffler/exhaust and oil pan lines had on the labor cost. The overhead burden rate that was determined pertained to approximately 437 percent in 1987, 434 percent in 1988, 577 percent in 1989 and 562 percent in 1990. The following table depicts the overhead burden shared by the respective product lines at the Bridgestone Industries for the years starting 1987 through to 1990. Overhead Burden Share per Product Line (Ã¢â¬Ë000) Overhead Burden 1987 1988 1989 1990 Fuel Tanks 18,234. 35 18,412. 03 25,490. 37 25,891. 96 Manifolds 25,744. 16 26,184. 35 36,246. 56 36,819. 62 Doors 11,463. 72 11,864. 85 16,420. 07 16,681. 43 Mufflers/Exhausts 24,646. 33 25,050. 44 0 0 Oil Pans 27,865. 45 28,378. 33 0 0 107,954 109,890 78,157 79,393 The overheads shared by the respective product lines also depicted significant change in the years from 1987 to 1990. On average the oil pans product line had the largest overheads allocated to its while the product line for the front and rear doors had the lowest overhead levels for the years 1987 and 1988. When the product lines were merged in 1989, the manifolds product line had the largest level of overheads allocated to it, while the product line for front and rear doors had the lowest level of overheads assigned to it. On a year to year basis, the overhead burden level has decreased by a small gradual percentage over the four years highlighted. This is not due to the fact that the overheads for the company have been decreasing; instead this has occurred due to the fact that the dollar cost of the direct labor has incrementally increased over the four year period as well resulting in the decrease in the overhead burden rate.
Monday, September 16, 2019
WHAT IS THE DIAMOND MODEL? DESCRIPTION The Diamond Model of Michael Porter for the competitive advantage of Nations offers a model that can help understand the comparative position of a nation in global competition. The model can also be used for major geographic regions. TRADITIONAL COUNTRY ADVANTAGES Traditionally, economic theory mentions the following factors for comparative advantage for regions or countries: 1. Land 2. Location 3. Natural resources (minerals, energy) 4. Labor, and 5. Local population size. Because these 5 factors can hardly be influenced, this fits in a rather passive (inherited) view regarding national economic opportunity. CLUSTERS Porter says that sustained industrial growth has hardly ever been built on above mentioned basic inherited factors. Abundance of such factors may actually undermine competitive advantage! He introduces a concept called Ã¢â¬Å"clustersÃ¢â¬ or groups of interconnected firms, suppliers, related industries, and institutions, that arise in certain locations. These clusters are geographic concentrations of interconnected companies, specialized suppliers, service providers, and associated institutions in a particular field. They grow on locations where enough resources and competences amass and reach a critical threshold, giving it a key position in a given economic branch of activity, with a decisive sustainable competitive advantage over others places, or even a world supremacy in that field. Porter says clusters can influence competition in three ways: Ã¢â¬ ¢They can increase the productivity of the companies in the cluster. They can drive innovation in the field. Ã¢â¬ ¢They can stimulate new businesses in the field. Some well-known examples of Clusters are USA/Silicon Valley (computers), Netherlands/Rotterdam (logistics), India/Bangalore (software outsourcing), USA/Hollywood (movies), France/Paris (fashion). According to Porter, as a rule competitive advantage of nations is the outcome of 4 interlinked advanced factors and activities in and between companies in these clusters. These can be influenced in a pro-active way by government. INTERLINKED ADVANCED FACTORS FOR COMPETITIVE ADVANTAGE 1. The Strategy, Structure and Rivalry of Firms. The world is dominated by dynamic conditions. Direct competition impels firms to work for increases in productivity and innovation. 2. Demand Conditions. If the customers in an economy are very demanding, the pressure facing firms to constantly improve their competitiveness via innovative products, through high quality, etc, will be greater. 3. Related Supporting Industries. Spatial proximity of upstream or downstream industries facilitates the exchange of information and promotes a continuous exchange of ideas and innovations. 4. Factor Conditions. Contrary to conventional wisdom, Porter argues that the Ã¢â¬Å"keyÃ¢â¬ factors of production (or specialized factors) are created, not inherited. Specialized factors of production are skilled labor, capital and infrastructure. Ã¢â¬Å"Non-keyÃ¢â¬ factors or general use factors, such as unskilled labor and raw materials, can be obtained by any company and, hence, do not generate sustained competitive advantage. However, specialized factors involve heavy, sustained investment. They are more difficult to duplicate. This creates a competitive advantage, because if other firms cannot easily duplicate these factors, they are valuable. THE ROLE OF GOVERNMENT IN THE DIAMOND MODEL OF PORTER The role of government in the Diamond Model of Porter is to act as a catalyst and challenger; it is to encourage Ã¢â¬â or even push Ã¢â¬â companies to raise their aspirations and move to higher levels of competitive performance. They must encourage companies to raise their performance, to stimulate early demand for advanced products, to focus on specialized factor creation and to stimulate local rivalry by limiting direct cooperation and enforcing anti-trust regulations. THE COMPETITIVE ADVANTAGE OF NATIONS Porter introduced this model in his book: Ã¢â¬Å"The Competitive Advantage of NationsÃ¢â¬ , after having done research in ten leading trading nations. The book was the first theory of competitiveness based on the causes of the productivity with which companies compete. Instead of traditional comparative advantages such as natural resources and pools of labor. This book should be considered obligatory reading for government economic strategists. It is also highly recommended for corporate strategists that are interested in the macro-economic environment of corporations.
Sunday, September 15, 2019
AMAZON WEB SERVICES CASE ANALYSIS SNEHA KATKURI AmazonÃ¢â¬â¢s core business of selling goods (ranging from books to fresh food and electronics to fashion cloths) through its e-commerce portal has seen exponential growth which necessitated a need for a massive storage and computing infrastructure that is always available and is resistant to failures. After building this, it is intuitive for Amazon to open up the infrastructure and sell it as a commodity.This helps Amazon not only to attract more customers to this new product but also to build new infrastructure thus benefiting its core business. The unmatched economies of scale at Amazon offer huge cost effciencies through a combination of high-volume, low cost procurement thanks to bargaining power of buyer Amazon. In addition, constant technological innovations in design, operations and management of the data centers help Amazon reduce the prices of its AWS offerings. Because of cheaper service provision, there is a flood of new c ustomers for AWS.However, with the advent of new competitors like Google Cloud Engine, there is an increasing stress on Amazon pricing. But, given that any typical business needs both scalable computing and storage, AWS, which offers a complete basket of services is a preferred choice for customers. Furthermore, the investments on AWS improved AmazonÃ¢â¬â¢s core business by helping it introduce value-added services. In 2007, Amazon introduced cloud- based music service to sell MP3 songs and a web- music player.Even though other competitors like Google announced a similar service, the music content available on Amazon was significantly cheaper and attracted more customers. Amazon Cloud Drive introduced almost simultaneously, runs on AWS (S3) service. The Kindle device sold by Amazon has a huge competitive advantage over Nook in the market thanks to up to 5GB of cloud- based free storage for storing books and personal documents. This also reduced the manufacturing cost of the device by getting rid of microSD card slot.Amazon AppStore, that runs on AWS, built to sell Android apps is a popular value added service to the recently introduced Kindle Fire device. Often, the prices of these apps are way lesser than those of competitors like Google. Instant Video is another massively popular service which helped Amazon build a huge eco system of content like music, books, apps and video that is vital for the success of a tablet device in the current ever- changing market extremely crowded with numerous devices from various manufacturers.Amazon has an advantage over competitors in this market because they were the first to market and so have had more experience and time to work out the kinks. Their 99% uptime guarantee for the S3 service is a testament to the fact that they have experienced issues in the past and have learned from them to the point of being able to offer guarantee to the users. Also, because designing and building such huge cloud infrastructures requir es vast amount of resources, competitors need precious time to catch up.In addition, Amazon itself is a very big customer for AWS. Hence, strengthening AWS is a natural choice for Amazon which is in its own business interest. For other players in the market, for example, RackSpace, a huge uncertainty exists in planning new initiatives and introducing new services on its cloud products. Also, AWS is a product evolved from AmazonÃ¢â¬â¢s existing infrastructure unlike some competitorsÃ¢â¬â¢ alternatives which had to be built from scratch, in turn giving a huge lead time to Amazon in cloud computing.Moreover, huge costs involved prohibit existing clients of AWS to switch to a new, yet cheaper, alternative. Furthermore, Amazon has learnt the imperatives and modalities of implementing and maintaining a network out of their business need and so as a consequence has better insight of flexibility some real world situations need. Thus I think though Amazon is giving up its competitive adv antage of software competency by offering AWS services, it is in turn proving to be profitable to the Company in the long run.
Saturday, September 14, 2019
I. Deals-R-Us Brokers (Part 1) Fred Jones, a distant relative of yours and president of Deals-R-Us Brokers (DRUB), has come to you for advice. DRUB is a small brokerage house that enables its clients to buy and sell stocks over the Internet, as well as place traditional orders by phone or fax. DRUB has just decided to offer a set of stock analysis tools that will help its clients more easily pick winning stocks, or so Fred tells you. FredÃ¢â¬â¢s information systems department has presented him with two alternatives for developing the new tools.The first alternative will have a special tool developed in C++ that clients will download onto their computers to run. The tool will communicate with the DRUB server to select data to analyze. The second alternative will have the C++ program running on the server, the client will use his or her browser to interact with the server. a. Classify the two alternatives in terms of what type of application architecture they use. b. Outline the pros and cons of the two alternatives and make a recommendation to Fred about which is better. Mini Case 1 SolutionThe second alternative will use the host-based architecture. Using this alternative, the server will do all the work. Because of this, the server will become very slow in processing those requests as more users are sending them. It cost a lot of money to upgrade those mainframes. The first alternative will use the client-server application architecture. In this case, the server and the client computer will share the workload. The server will be able to respond to many usersÃ¢â¬â¢ requests without any slowness. This is the best option Fred needs to use for his business.