ICS , Graduate School of International Corporate Strategy
[Term 4] The Information Economy (R. Davies) (2009/Term 3&4 (Spring&Summer))
Advances in digital technologies and network services continue to fuel expansion of the information economy. Epitomized by companies such as Amazon, Google, Yahoo!, eBay, Apple, Microsoft, Nokia, NTT DoCoMo, Sony, and Nintendo, the information economy is at the leading edge of new business models for selling products and services, with and without analogues in the traditional economy.
At the center of this evolution are software platform ecosystems, consisting of constellations of mutually dependent communities of businesses and consumers with a symbiotic relationship to one another that create value through the coordinated efforts of their members. Analysis of the underlying economics of these ecosystems provides important insights into business models, product design, pricing structures, and competitive dynamics, as well as the variable nature of the upstream and downstream integration of software platforms with hardware manufacturers, content providers, application and middleware developers, and end users.
These developments have also given rise to profound changes in the retail market, both traditional and virtual, as exemplified in Long Tail economics. The most successful Internet businesses today are capitalizing on new digital technologies that drive demand down the Long Tail distribution curve and create markets of infinite choice for consumers. By applying principles from economics, history, and business analysis to case studies and other media sources, this course aims to identify the fundamental trends that are shaping the information economy, forming new industries, transforming others, and often sweeping away old ones in a wake of “creative destruction.”
Course Structure
The course begins with introductory lectures on (1) the Long Tail, which currently manifests itself largely as an Internet phenomenon, and (2) the underlying features of software platform ecosystems. By mapping these ecosystems, we will discover important principles that influence pricing, design, organization, and the governance of businesses operating in the information economy. Subsequent lessons apply these principles to detailed analyses of some of the most prominent platform-based industries today, including personal computers, smart phones, video games, and digital media (music, movies, and books), identifying sustainable business models and the key technological drivers and revenue streams that lead to profitability. Following an investigation into issues involving copyrights in cyberspace, the focus shifts to an examination of business models that underlie Web-centric services, such as search and advertising, online auctions and payment systems, e-tailing, and social networking. The choice of cases, articles, and topics is updated each year. In the past, the course included cases on Apple iPod/iTunes, Electronic Arts, NetFlix, BitTorrent, Google, Amazon, eBay, NTT DoCoMo, Mobile Felica, and LinkedIn.
Teaching Method
The course will be taught using interactive lectures and class discussions based on assigned cases and other readings. There will be a midterm paper and an in-class final examination (open book), requiring focused analysis of specific industry trends and business models that will allow students to apply insights discovered in class and formulate their own views.