Information: Industry Structure and Competitive Strategy
The nearly instantaneous transmission and processing of information is changing the structure of entire industries, and is altering the profitable opportunities available to many firms. The ability to target profitable market segments and to identify individual customers is reducing the value of scale-based operations and the strategic advantage of large firms with existing market share. The ability to monitor the performance of units abroad, without regard to distance or time zones, is increasing the value of cooperative partnerships. This is leading to greater reliance upon outsourcing, benefiting many service industries and once again reducing the advantage of many large firms. At the same time, the impact of information technology on the transparency and efficiency of securities markets is destroying the profits of entire segments of financial services. All aspects of the firm - production, service, sales, marketing, strategy - will be affected. Clearly, some firms will win and others will lose; nearly all will have to change. And yet, fundamental laws of economics have not been repealed. How can previous economic theory, and previous experience with rapid technological change, provide insights for the development of strategy in an increasingly digital age?
This course draws upon the most recent experience in the impact of information technology upon diverse industries, ranging from securities trading to consumer packaged goods retailing. It integrates that experience with relevant theory to develop a theory of competitive strategy for electronic commerce, and for information-based strategies more generally. It is not a tools and techniques course.
Students completing the course will have a sound theoretic framework for pursuing further studies in the area of information-based strategies, including eCommerce. They will understand how information technology affects the basic strategic options available, and will understand how firms and industries are likely to be affected. They will understand the often poorly structured process of evaluating potential systems innovations. They will be able to participate in strategic planning and systems planning because they will understand the relationships among them. The course is particularly recommended for students in strategic management and marketing, and for those interested in careers in consulting or on Wall Street. No background in technology is required. Students completing this course will have mastered a basic understanding of the competitive implications of information technology and the fundamentals of the use of information technology in business. It is recommended that students desiring a more in-depth treatment, including experience with implementing the theories presented here, take the closely related follow-on course in the Information, Strategy, and Economics sequence, OPIM 667.