Summary: Information Strategy RSM Erasmus University Rotterdam: BM01BIM
This summary contains readings + videos for Session 1-5 for the end term of IS 2023 taught by
Ting Li. Session 6-8 are not included! You can always text me if you have any comments or
questions! Good luck! - Maaike
Session 1: Digital Disruption 2
Video 1: Introduction....................................................................................................................................................................................... 2
Video 2: Evaluating Technology Impact Industry Dynamics .......................................................................................................................... 2
Video 3: Newly Vulnerable Market ................................................................................................................................................................. 4
Article 1: Competing in the Age of AI ............................................................................................................................................................. 5
Article 2: From Disruption to Collision: The New Competitive Dynamics .................................................................................................... 7
Article 3: Digital Doesn’t Have to be Disruptive ............................................................................................................................................ 8
Session 2: Digital Business Model 10
Video 1: The Long Tail .................................................................................................................................................................................. 10
Video 2: Disruptive Innovation Explained .................................................................................................................................................... 10
Video 3: How to Respond to Digital Disruption ........................................................................................................................................... 11
Video 4: Digital Business Models ................................................................................................................................................................. 11
Article 4: Optimizing Your Digital Business Models .................................................................................................................................... 13
Article 5: Thriving in an Increasingly Digital Ecosystem ............................................................................................................................. 15
Article 6: The Transformative Business Models............................................................................................................................................ 18
Session 3: Emerging Technologies 20
Video 1: Why every company should have an AR Strategy ........................................................................................................................... 20
Video 2: Mark Zuckerberg’s Vision for Socializing in the Metaverse .......................................................................................................... 20
Video 3: 4 Things to Know about NFTs ........................................................................................................................................................ 21
Video 4: What is Web3? ................................................................................................................................................................................ 21
Article 7: How One Airline Is Using AR to Improve Operations .................................................................................................................. 22
Article 8: Some Very Simple Economics of Web3 and the Metaverse........................................................................................................... 23
Article 9: Do Non-Fungible Tokens (NFTs) Affect Prices of Physical Products? Evidence from Trading Card Collectibles .................... 26
Session 4: Information Goods 27
Video 1: Economics of Information Goods ................................................................................................................................................... 27
Video 2: Pricing of Information Goods ......................................................................................................................................................... 28
Video 3: Versioning of Information Goods ................................................................................................................................................... 28
Article 10: Pricing Information ..................................................................................................................................................................... 30
Article 11: Economics of IT: Pricing ............................................................................................................................................................ 33
Article 12: Versioning: The Smart Way to Sell Information ......................................................................................................................... 34
Article 13: Netflix and the Economics of Bundling ....................................................................................................................................... 37
Session 5: Digital Platforms 38
Video 1: Introduction to Digital Platforms ................................................................................................................................................... 38
Video 2: Network Effects ............................................................................................................................................................................... 38
Video 3: Platform Pricing ............................................................................................................................................................................. 40
Video 4: Platform Envelopment .................................................................................................................................................................... 41
Article 14: Strategies for Two-Sided Markets ............................................................................................................................................... 43
Article 15: Pipelines, Platforms, and the New Rules of Strategy .................................................................................................................. 47
Article 16: Strategies for Two-Sided Markets ............................................................................................................................................... 51
,Session 1: Digital Disruption
- Define digital disruptions and analyze examples of digital disruptions.
- Analyze how digital technologies affect a given industry’s structure and dynamic. (Porter’s five forces is a good
framework for such an analysis).
- Explain why some markets are more vulnerable than others to be disrupted; and apply the conditions of newly
vulnerable market to an industry.
- Examine factors influencing the adoption of digital technologies (for individual, companies).
Video 1: Introduction
Digital Macro Trends
creating an enormous shift in speed of the cycle of innovation
1. Connectivity of devices
2. Continued growth in computing power
3. Data – more and more data
- Also, non-structured data.
→ Challenges:
1. Technology Challenge
- Which technologies are potential successes and which ones will crash?
2. Business Challenge
- Changes led by established firms and entrepreneurial ones.
- Information strategy: How companies are able to equip themselves with these technologies
and compete.
3. Information Challenge
- How to handle data to create value?
“Every business is an information business”.
- Information is the glue that holds together the structure of all businesses.
a. Reach: How many in a market who are exchanging information.
b. Richness: The depth and media used for information.
c. Affiliation: Effectiveness of links with partners.
Video 2: Evaluating Technology Impact
Industry Dynamics
Digital Disruption
How to evaluate the impacts of digital
technologies on industry dynamics?
Five key phases of technologies life cycle:
1. Technology Trigger
2. Peak (of inflated expectations)
3. Through of Disillusionment
4. Slope of Enlightenment
5. Plateau of Productivity – mainstream
adoption starts to take off.
2
,Digitized vs. Digital
- Digitized: Digitization involves standardizing business processes. It is associated with cost-
cutting, reliability, efficiency, and transparency.
- Digital: Digital technologies are introducing speed and connectivity that they create
opportunities for entirely new customer value propositions.
o Companies deliver digitally inspired customer value propositions.
o Digital offerings are information-enriched customer solutions delivered as seamless,
personalized customer experiences. Digital offerings introduce new business models
and provide new sources of revenue.
Business world is increasingly digitizing.
- Breaking down industry barriers and;
- Creating new opportunities while destroying long-successful business models.
This process is referred to as digital disruption.
Value Chain
3
, Video 3: Newly Vulnerable Market
Why are some industries more vulnerable than others in digital disruption?
Three Conditions:
1. Newly Easy to Enter
- Due to regulatory change that permits new entrants (e.g., deregulation of American airlines
industry).
- Changes in technology that reduce cost of entering.
- Reduce the minimum scale needed to compete.
- Changes in distribution system.
- Changes in customer preferences.
2. Attractive to Attack
- If all participants were earning excess profits.
- Profound difference exists in profitability across customers.
3. Difficult to Defend
- Barriers prevent incumbents from immediate replication.
- Existing pricing structure, strategic inflexibility, lack of vison, legacy systems.
Information Strategy Lecture 1
What is digital disruption? What are some examples?
Muesli bars example:
- Personalization. There is a bar for everyone.
o As a result of: social media → Technologies give the companies insight into
personal preferences.
Oil and gas (the way we go and tank our car).
- Payment options (do not have to go inside)
- Optimizations of locations
→WeFuel: changes the way how the product is delivered, brings the gas to you.
Jet Engine:
- Digital twin / augmented reality.
Bank:
- Do we need a bank? We need banking, not the physical bank.
- Fintech companies are a threat to banks. Technology-based banking.
o AliPay is the biggest FinTech company in the world.
o Alibaba from E commerce to FinTech: B2B e-market place, became B2C, became
a bank. Provided insurance, payment, wealth management. Ulabauw? Leftover
money.
o Alibaba gave a high interest rate on the e-commerce accounts if people put money
on there. They provided a company of it, AliPay.
4
This summary contains readings + videos for Session 1-5 for the end term of IS 2023 taught by
Ting Li. Session 6-8 are not included! You can always text me if you have any comments or
questions! Good luck! - Maaike
Session 1: Digital Disruption 2
Video 1: Introduction....................................................................................................................................................................................... 2
Video 2: Evaluating Technology Impact Industry Dynamics .......................................................................................................................... 2
Video 3: Newly Vulnerable Market ................................................................................................................................................................. 4
Article 1: Competing in the Age of AI ............................................................................................................................................................. 5
Article 2: From Disruption to Collision: The New Competitive Dynamics .................................................................................................... 7
Article 3: Digital Doesn’t Have to be Disruptive ............................................................................................................................................ 8
Session 2: Digital Business Model 10
Video 1: The Long Tail .................................................................................................................................................................................. 10
Video 2: Disruptive Innovation Explained .................................................................................................................................................... 10
Video 3: How to Respond to Digital Disruption ........................................................................................................................................... 11
Video 4: Digital Business Models ................................................................................................................................................................. 11
Article 4: Optimizing Your Digital Business Models .................................................................................................................................... 13
Article 5: Thriving in an Increasingly Digital Ecosystem ............................................................................................................................. 15
Article 6: The Transformative Business Models............................................................................................................................................ 18
Session 3: Emerging Technologies 20
Video 1: Why every company should have an AR Strategy ........................................................................................................................... 20
Video 2: Mark Zuckerberg’s Vision for Socializing in the Metaverse .......................................................................................................... 20
Video 3: 4 Things to Know about NFTs ........................................................................................................................................................ 21
Video 4: What is Web3? ................................................................................................................................................................................ 21
Article 7: How One Airline Is Using AR to Improve Operations .................................................................................................................. 22
Article 8: Some Very Simple Economics of Web3 and the Metaverse........................................................................................................... 23
Article 9: Do Non-Fungible Tokens (NFTs) Affect Prices of Physical Products? Evidence from Trading Card Collectibles .................... 26
Session 4: Information Goods 27
Video 1: Economics of Information Goods ................................................................................................................................................... 27
Video 2: Pricing of Information Goods ......................................................................................................................................................... 28
Video 3: Versioning of Information Goods ................................................................................................................................................... 28
Article 10: Pricing Information ..................................................................................................................................................................... 30
Article 11: Economics of IT: Pricing ............................................................................................................................................................ 33
Article 12: Versioning: The Smart Way to Sell Information ......................................................................................................................... 34
Article 13: Netflix and the Economics of Bundling ....................................................................................................................................... 37
Session 5: Digital Platforms 38
Video 1: Introduction to Digital Platforms ................................................................................................................................................... 38
Video 2: Network Effects ............................................................................................................................................................................... 38
Video 3: Platform Pricing ............................................................................................................................................................................. 40
Video 4: Platform Envelopment .................................................................................................................................................................... 41
Article 14: Strategies for Two-Sided Markets ............................................................................................................................................... 43
Article 15: Pipelines, Platforms, and the New Rules of Strategy .................................................................................................................. 47
Article 16: Strategies for Two-Sided Markets ............................................................................................................................................... 51
,Session 1: Digital Disruption
- Define digital disruptions and analyze examples of digital disruptions.
- Analyze how digital technologies affect a given industry’s structure and dynamic. (Porter’s five forces is a good
framework for such an analysis).
- Explain why some markets are more vulnerable than others to be disrupted; and apply the conditions of newly
vulnerable market to an industry.
- Examine factors influencing the adoption of digital technologies (for individual, companies).
Video 1: Introduction
Digital Macro Trends
creating an enormous shift in speed of the cycle of innovation
1. Connectivity of devices
2. Continued growth in computing power
3. Data – more and more data
- Also, non-structured data.
→ Challenges:
1. Technology Challenge
- Which technologies are potential successes and which ones will crash?
2. Business Challenge
- Changes led by established firms and entrepreneurial ones.
- Information strategy: How companies are able to equip themselves with these technologies
and compete.
3. Information Challenge
- How to handle data to create value?
“Every business is an information business”.
- Information is the glue that holds together the structure of all businesses.
a. Reach: How many in a market who are exchanging information.
b. Richness: The depth and media used for information.
c. Affiliation: Effectiveness of links with partners.
Video 2: Evaluating Technology Impact
Industry Dynamics
Digital Disruption
How to evaluate the impacts of digital
technologies on industry dynamics?
Five key phases of technologies life cycle:
1. Technology Trigger
2. Peak (of inflated expectations)
3. Through of Disillusionment
4. Slope of Enlightenment
5. Plateau of Productivity – mainstream
adoption starts to take off.
2
,Digitized vs. Digital
- Digitized: Digitization involves standardizing business processes. It is associated with cost-
cutting, reliability, efficiency, and transparency.
- Digital: Digital technologies are introducing speed and connectivity that they create
opportunities for entirely new customer value propositions.
o Companies deliver digitally inspired customer value propositions.
o Digital offerings are information-enriched customer solutions delivered as seamless,
personalized customer experiences. Digital offerings introduce new business models
and provide new sources of revenue.
Business world is increasingly digitizing.
- Breaking down industry barriers and;
- Creating new opportunities while destroying long-successful business models.
This process is referred to as digital disruption.
Value Chain
3
, Video 3: Newly Vulnerable Market
Why are some industries more vulnerable than others in digital disruption?
Three Conditions:
1. Newly Easy to Enter
- Due to regulatory change that permits new entrants (e.g., deregulation of American airlines
industry).
- Changes in technology that reduce cost of entering.
- Reduce the minimum scale needed to compete.
- Changes in distribution system.
- Changes in customer preferences.
2. Attractive to Attack
- If all participants were earning excess profits.
- Profound difference exists in profitability across customers.
3. Difficult to Defend
- Barriers prevent incumbents from immediate replication.
- Existing pricing structure, strategic inflexibility, lack of vison, legacy systems.
Information Strategy Lecture 1
What is digital disruption? What are some examples?
Muesli bars example:
- Personalization. There is a bar for everyone.
o As a result of: social media → Technologies give the companies insight into
personal preferences.
Oil and gas (the way we go and tank our car).
- Payment options (do not have to go inside)
- Optimizations of locations
→WeFuel: changes the way how the product is delivered, brings the gas to you.
Jet Engine:
- Digital twin / augmented reality.
Bank:
- Do we need a bank? We need banking, not the physical bank.
- Fintech companies are a threat to banks. Technology-based banking.
o AliPay is the biggest FinTech company in the world.
o Alibaba from E commerce to FinTech: B2B e-market place, became B2C, became
a bank. Provided insurance, payment, wealth management. Ulabauw? Leftover
money.
o Alibaba gave a high interest rate on the e-commerce accounts if people put money
on there. They provided a company of it, AliPay.
4
