Net Neutrality

Net Neutrality

Internet service providers (ISP) have a challenge on their hands.  Currently, they have provided broadband at a neutral price to the market, despite that each consumer is using a different amount of broadband each month.  If we compare an electric company to ISPs, would it be acceptable for a 10,000 sg ft McMansion to pay the same amount as a 800 sq ft condo?  Most people would agree that a McMansion should pay for the amount of energy used vs. a flat rate.  So, why is it different with broadband?   It is not.  However, the challenge is that, like electric companies, there are merely one or a select few suppliers.  This creates conflicts of interests that require the government’s involvement to insure that monopolistic strategies are not unfairly influencing or threatening other businesses that operate on the Internet.  An interesting example is AT&T may want to prevent Skype traffic on its Internet connections in order to force customers to use the AT&T cell network (Laudon & Laudon, CH4 Case study, 2014).  Clearly, we need the Federal Communications Commission (FCC) involvement in order to maintain a fair market. Certain services such as YouTube or Netflix that use a significant amount of broadband should start preparing to address how they will change their pricing models in anticipation of higher broadband costs.  A large portion of YouTube or Netflix profits could be credited to them being able to take advantage of net neutrality.   At some point, broadband will need to be adjusted to fairly account for usage, specifically by for-profit businesses.

How does the consumer continue to get a fair service without a fear that broadband prices will sky rocket?  Many people fear that by removing Net Neutrality, the retail consumer will be forced to accept slower internet speeds as described in Moyers & Company: Is Net Neutrality Dead? . Moyers and Company's opening comments that the elite will be able to buy his or her way to the Internet while leaving everyone else behind is extreme (Moyers & Company, 2014).   A more realistic model would be for a commercial wholesale pricing structure and a retail pricing structure.  This model will allow start up companies, consumers, and non-profits the ability to continue to have economic options, as their broadband use is minimal in comparison to companies like Netflix.  Allowing the ISPs to charge larger companies that are profitable and using mass amounts of broadband is a fair proposition.   

References      

Laudon, K. C., & Laudon, J. P. (2013). Chapter 4, Case 1 What Net Neutrality Means

for You. What Net Neutrality Means for You , 13 , 13. (S. Wall, B. Horan, & A. Bradbury, Eds.) Pearson.

Laudon, K. C., & Laudon, J. P. (2014). Management Information Systems (13 ed.). (S.

Wall, B. Horan, & A. Bradbury, Eds.) Upper Saddle River, New Jersey: Pearson.

Moyers & Company: Is Net Neutrality Dead? Films On Demand. Films Media Group,   

2014. Web. 24 Jan. 2015

 

Enterprise Systems Drive Corporate Strategy for a Small Business

Enterprise Systems Drive Corporate Strategy for a Small Business

Materials Handling Equipment Corporation (MHE) is a small business that sells a commodity.  Their commodity is that of forklifts, cranes, and similar machinery.  Recently, the company faced economic challenges from a dwindling market due to the increase of larger companies moving into their market space.  The increase in competition resulted in MHE reducing their prices, which caused lower revenue streams.  As a result, MHE was forced to look at new ways to differentiate itself from the competition.  Though reluctant at first, MHE looked into SAP’s Business One ERP system, which proved to be a good decision (ZantekSAP, 2012).

SAP’s Business One ERP system reduced MHE’s costs, increased revenues, and offered a new service. As a result, the new service gave them their own Market Niche in asset management and more enhanced tools for their clients.  One of those tools was a portal, which allowed MHE’s clients to view their assets.  The portals allowed customers to manage their assets in a new way by providing the service and resource of maintaining their assets under one roof.  This new service allowed MHE to expand their current sales platform to a sales, service, and information-based platform (ZantekSAP, 2012). 

How will MHE continue to differentiate themselves from the competition?  Eventually, MHE’s competitors will enter the market offering a similar service.   

As Kirk Landers mentions in a brief article   

First, there is the profit motive.  Even though the field can catch up quickly, a manufacturer can parlay a breakthrough design into a premium price in the short term and establish a strong market share for the long term (Landers, 2000).

Given MHE’s market niche and product differentiation, they can remain profitable by growing a larger long-term market share then that of its competition.  

References:

Landers, K. (2000, Aug). Product Differentiation. Construction Equipment .

Laudon, K. C., & Laudon, J. P. (2014). Management Information Systems (13th Edition 

ed.). (S. Wall, & B. Horan, Eds.) Upper Saddle River, NJ, USA: Pearson.

Laudon, K. C., & Laudon, J. P. (2013). Chapter 3, Case 2 Materials Handling Equipment   Corp: Enterprise Systems Drive Corporate Strategy for a Small Business. 13 , 13.             (S. Wall, B. Horan, & A. Bradbury, Eds.) Pearson.

ZantekSAP. (2012, July 26). www.youtube.com. Retrieved January 22, 2015, from

https://www.youtube.com/watch?v=iIIeze6i90Y