When sales of a product decrease due to the release of a new product made by the same company.
Citation: Kenton, W. (n.d.). Corporate Cannibalism. Investopedia. https://www.investopedia.com/terms/c/corporatecannibalism.asp
Cash Cow
A business, investment, or product that provides a steady income or profit.
Twin, A. (2020). What Makes a Cash Cow? Investopedia. https://www.investopedia.com/terms/c/cashcow.asp
Creosote Bush
A product or business that uses up resources (money, time, attention), crowds out new ideas or innovation, was valuable once, but now holds the company back.
The name comes from a desert plant that releases chemicals to prevent other plants from growing nearby.
Citation: Gallaugher, J. (2025). Information Systems: A Manager's Guide to Harnessing Technology (with SmartGrader for Excel). (10.1.4). FlatWorld.
Disruptive technology and innovation
Innovation that creates a new market and value network, eventually displacing established market-leading firms, products, and alliances. It makes products more affordable and accessible, starting in niche markets before surpassing existing, mainstream solutions.
Citation: Gallaugher, J. (2025). Information Systems: A Manager's Guide to Harnessing Technology (with SmartGrader for Excel). (10.1.4). FlatWorld.
Fixed costs
These are costs that do not change no matter how much you produce. You pay them up front or regularly, even if you produce nothing.
(ie. Rent,
Salaries of full-time staff,
Equipment or software licenses,
Website hosting fees)
Citation: Gallaugher, J. (2025). Information Systems: A Manager's Guide to Harnessing Technology (with SmartGrader for Excel). (10.1.4). FlatWorld.
Key Performance Indicators (KPIs)
A KPI is a specific metric that is tied to a strategic goal. It’s a metric that really matters.
Citation: Gallaugher, J. (2025). Information Systems: A Manager's Guide to Harnessing Technology (with SmartGrader for Excel). (10.1.4). FlatWorld.
Long Tail
The Long Tail Phenomenon explains how digital platforms can make money by selling a large number of niche products, rather than just focusing on a few popular ones.
Citation: Gallaugher, J. (2025). Information Systems: A Manager's Guide to Harnessing Technology (with SmartGrader for Excel). (10.1.4). FlatWorld.
Marginal Costs
These are the additional costs of producing one more unit of a good or service.
Citation: Gallaugher, J. (2025). Information Systems: A Manager's Guide to Harnessing Technology (with SmartGrader for Excel). (10.1.4). FlatWorld.
Practice Quiz
1. Which technology solution was implemented to solve the inventory problem?
An enabling technology
Contract manufacturing
An interorganizational information system
The Fair Factories Clearinghouse
Answer: C ~ To eliminate demand distortion and the Bullwhip Effect, firms must share consumer-demand data across the supply chain using interorganizational information systems. Enabling technologies make products accessible to new markets. Contract manufacturing involves outsourcing physical production. The Fair Factories Clearinghouse is specifically for sharing ethical audit data to stop sweatshop labor, not tracking live retail inventory
2. A popular smartphone brand releases a new version of its flagship device every year. This year's model looks almost identical to last year's, but it has a slightly brighter screen, a battery that lasts one hour longer, and a marginally faster processor. These exact features were highly requested by their current, loyal user base in a recent survey.How would this new phone release be classified?
As a disruptive innovation
As a sustaining innovation
As an interorganizational system
As an omnichannel strategy
Answer:B ~ Sustaining innovations leverage continuous, incremental, and evolutionary technology advances to improve existing products, specifically driven by the requests of existing, established customers. Disruptive innovations create market shocks with radically new ways of doing things. Interorganizational systems connect different companies' data. Omnichannel strategies deal with seamless retail distribution experiences.
3. Which concept explains the dominant corporation's ability to survive this disruptive threat?.
Big firms excel at creating sustaining innovations.
Big firms possess finely tuned logistics
Big firms are structurally immune to the Hype Cycle
Big firms have a massive revenue advantage that allows them to tolerate risk and acquire startups
Answer: D ~ While big firms often move too slowly to create disruptive tech themselves, their primary advantage is massive revenue, which allows them to tolerate risk, fund venture capital efforts, or simply buy out threatening startups. Sustaining innovation involves continuous upgrades, not buying competitors. Finely tuned logistics refers to physical supply chain speed. No firm is structurally immune to the Hype Cycle.
4. A massive, legacy tax-preparation company notices that thousands of younger users are flocking to a scrappy new mobile app that categorizes their expenses automatically using artificial intelligence. Recognizing they cannot build this technology fast enough internally, the legacy company uses its massive cash reserves to buy the startup and integrate the new AI features into its own core software.
Which company's successful response to disruption does this strategy most closely mirror?
Blockbuster's response to Netflix
Gap's response to Zara
Intuit's response to emerging financial tech
Dell's response to disintermediation
Answer: C ~ Intuit successfully navigated disruptive threats by using its revenue advantage to acquire upstart rivals (like Mint) and integrate their advanced technologies (like AI and cloud apps) into its own offerings. Blockbuster famously laughed at and failed to acquire Netflix. Gap struggled to match Zara's vertical integration. Dell is famous for creating disintermediation, not acquiring startups to survive it.
5. A trendy campus boutique decides to order 5,000 heavy winter coats in July because a supplier offered a massive bulk discount. However, the winter turns out to be unseasonably warm, and students instead want light jackets. The boutique's back room is entirely filled with unsold coats, tying up all their cash and forcing them to sell the coats at a severe loss just to clear out the space.
Which core principle of fast fashion does this scenario best illustrate?
Inventory equals death
Hardware is an enabler
Disintermediation increases profit
Sustaining innovation drives growth
Answer: A ~ In the fast fashion industry, holding massive amounts of seasonal stock is highly risky; "Inventory = Death" describes how unsold goods force devastating markdowns and tie up capital. Hardware enabling refers to physical IT equipment supporting a business, not physical apparel stock. Disintermediation is cutting out middlemen, which does not relate to over-ordering stock. Sustaining innovation involves incremental product improvements.