Rothaermel Exercise 1
Discussion Question 1.1
The concept of a company’s business model is more narrowly focused than the concept of a company’s business strategy. A company’s business strategy relates broadly to its competitive initiatives and business approaches. In contrast, a company’s business model focuses on whether the revenues and costs flowing as a result of the business strategy demonstrate business viability. A company’s business model deals with whether the revenue-cost-profit economics of its strategy demonstrate the viability of the business enterprise as a whole.
Discussion Question 1.2
Crowdsourcing is the process of getting work or funding, usually online, from a crowd of people. The word is a combination of the words 'crowd' and 'outsourcing'. The idea is to take work and outsource it to a crowd of workers. This would be advantageous to many businesses in all areas of commerce because it allows for work to be done by the consumer thus lowering the bottom line. It also ensures before production, that people like the design and thus will most likely buy it.
One company that produces content this way is Wikipedia. Instead of Wikipedia creating an encyclopedia on their own, hiring writers and editors, they gave a crowd the ability to create the information on their own. This has allowed Wikipedia to be the most comprehensive encyclopedia this world has ever seen.
Discussion Question 1.3 (2 parts to this question)
Firm Effects are more relevant to a business on a daily basis because they are related directly to the business at hand by way of the manager’s actions. Industry effects are outside sources surrounding the business which could have an effect butnot as direct as a manager’s actions.
In addition, Managers can react to the outside industry effects but industry effects will not react and adapt to managers actions. Because of this, Industry Effects will never have a more direct influence on a firm than Firm...