Information Strategy Lectures Summary

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Information Strategy – Session 1: Digital Disruption .............................................................................................5
Introduction ...............................................................................................................................................................................................5
Digital macro trends .......................................................................................................................................................................5
Three digital challenges ................................................................................................................................................................6
Course Administration ..........................................................................................................................................................................6
Session 1: Digital Disruption ..............................................................................................................................................................6
How to evaluate the impact of digital technologies on industry dynamics? .......................................................7
Newly vulnerable market: why some markets are more vulnerable to disruption ...................................... 10

Information Strategy – Session 2: Digital Business Models............................................................................... 11
Disruptive Innovation & Long Tail ................................................................................................................................................ 11
Netflix Business Model................................................................................................................................................................ 11
The Disruptive Innovation Model.......................................................................................................................................... 12
The Long Tail Phenomenon ...................................................................................................................................................... 14
Business model innovation – not technology .................................................................................................................. 15
Digital business models .............................................................................................................................................................. 16

Information Strategy – Session 3: Information Goods......................................................................................... 18
Economics of Information Goods ................................................................................................................................................... 18
Motivation ......................................................................................................................................................................................... 18
Utility of consuming information goods ............................................................................................................................. 18
The physical nature of digital products and some economic impacts ................................................................. 19
Economies of scale effects ......................................................................................................................................................... 20
Pricing of Information Goods - Example ............................................................................................................................ 20
Pricing of Information Goods................................................................................................................................................... 20
Price and quantity in a monopoly.......................................................................................................................................... 21
Minding the consumer ................................................................................................................................................................ 21
Differential Pricing........................................................................................................................................................................ 22

Information Strategy – Session 4: Versioning and Bundling ............................................................................ 23
Versioning Information Goods ........................................................................................................................................................ 23
Utility of consuming information goods ............................................................................................................................. 24
Versioning as a monopolist ...................................................................................................................................................... 25
Optimized versioning as a monopolist ................................................................................................................................ 26
Bundling information goods .................................................................................................................................................... 26
Monopoly bundling....................................................................................................................................................................... 27

Information Strategy – Session 5: Tutorial Session .............................................................................................. 29
Digital Strategy Assignment ............................................................................................................................................................ 29
Sample exam questions ...................................................................................................................................................................... 30
Sana guest lecture ................................................................................................................................................................................ 31

Information Strategy – Session 6: Digital Platforms ............................................................................................ 32
Platforms .................................................................................................................................................................................................. 32
Network effects .............................................................................................................................................................................. 32
Platform envelopment – how do adjacent platforms compete? ............................................................................. 36
Facebook’s integration of Instagram ................................................................................................................................... 37

Information Strategy – Session 7: Value of Information..................................................................................... 38
Big data..................................................................................................................................................................................................... 38
Experiment ....................................................................................................................................................................................... 39


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, Analytics............................................................................................................................................................................................. 40
Creating value from business analytics .............................................................................................................................. 41
Guest lecture Deloitte - AI ................................................................................................................................................................. 43

Information Strategy – Session 8: Electronic Markets ........................................................................................ 45
Electronic markets ........................................................................................................................................................................ 45
Transaction costs........................................................................................................................................................................... 45
Transaction costs & outsourcing in transaction costs economics (TCE) ........................................................... 45
The impact of IT on the structure of the firm .................................................................................................................. 46
The electronic markets hypothesis....................................................................................................................................... 46
Information asymmetry ............................................................................................................................................................. 48
Case: LemonADS ............................................................................................................................................................................ 49
Future contracts ............................................................................................................................................................................. 50
Case: is more information always better? ......................................................................................................................... 50

Information Strategy – Session 9: Auctions I & Coolblue ................................................................................... 51
Online Auctions ...................................................................................................................................................................................... 52
Coolblue guest lecture ........................................................................................................................................................................ 55

Information Strategy – Session 10: Auctions II ...................................................................................................... 56
Algorithmic bias ............................................................................................................................................................................. 57

Information Strategy – Session 10: Practice exam questions & wrap up..................................................... 58
Exam wrap up ........................................................................................................................................................................................ 59




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