GRA8829: Competing in a digital world

GRA8829 Competing in the Digital Economy

MBA program, Winter 2001
[What's new] [Administrivia] [Seminar plan] [Discussion group] [Literature]
[Participants' email] [Term paper groups]
[Espen Andersen's home page] [Hanno Roberts' home page]
[Prior courses of similar nature (BI pages): 1997/1998/1999/2000]

Suggestions and comments always welcome

What's new

March 13: Scheduled last class for March 22.

February 24: added extra session at end.

January 9: Some updates on dates etc., especially new class with Clayton Christensen on January 31st.

January 4: Added some details with book chapters, etc.

December 13, 2000: Temporary page set up, primarily with early schedule.

Administrivia
Objective
The objective of this course is to give the students a thorough understanding of the strategic, economic, technical an dorganizational issues of doing business in a digital environment, such as the Internet or mobile technology. Students interested in pursuing careers developing and managing electronic commerce systems or participating in startup companies will receive an excellent foundation in the basic technologies of global electronic networks and their managerial implications.
Computer use
This seminar will make extensive use of "normal" information and communications technology, in the sense that all assignments, messages, discussions and hand-ins will be done electronically. Students are expected to actively participate in discussions (electronic or in the classroom) to demonstrate knowledge and understanding of the topics, and will have a large degree of influence over the content of classes and the topic for their term paper.

Evaluare
necesse est..... This is a high-intensity course at an advanced level, so attendance is mandatory and intense participation the norm rather than the exception. Formal evaluation is as follows:

term paper (fagoppgave) counts 60% toward the final grade. The term paper is defined by the students themselves (coordinated with professor), and should be done in the regular MBA groups. The paper is a "normal" paper, related to electronic commerce, electronic business processes or strategy that has a large electronic element. Students are encouraged to make the paper as practically oriented as possible, for instance by creating a business plan for an Internet-based company, an electronic commerce strategy for an existing company, or a study into the ecommerce implications for an existing or new industry. If appropriate, the project should include a "mock-up" (i.e., created for demonstration purposes and not necessarily functional) of the web site or customer interface. The proposed business or strategy does not necessarily have to be web-based or geared towards end customers. However, information and communications technology should be a core, enabling part of the strategy or business studied. The term paper is graded on the following criteria:

relevance and interest of topic: 10%

layout and structure of Web pages: 10%

definition and statement of problem: 20%

sources, including links (quality, relevance, interest): 20%

analysis: 20%

conclusion/recommendations (quality, implementability): 20%

individual intermediary submissions (2 - 3, electronically delivered) counts 20% toward the final grade:

Please read the Catatech case and answer the following questions:

1. How does the appearance of "E-Herramientas" affect Catatech's business?
2. What are Marisa's options, and how should she proceed?
Base your answers on the theory of the course literature and your own judgements about the case. Catatech is not a real company (though the situation is fairly real and is based on one), so don't spend time searching for it or researching the electric measurement industry. All factual information is contained in the case. Answer is to be handed in, on paper, individually, on no more than 2 - two - A4 pages, before class on January 29th. Smallest font allowed: Times New Roman 10 point, no reward for long answers.

participation in classroom and electronic discussions, dictatorically judged by professors (but, perhaps, with student input), counts 20% toward the final grade

Detailed seminar plan
The dictatorial right to change and amend this at any time and on any whim is most explicitly reserved.....

Date/lecturer Topic Preparation

1
Friday January 5th
13:00-16:00
Espen Andersen Introduction to the course, a discussion of Internet trends.
Course content and preparation. Read and be prepared to discuss:

Afuah & Tucci: Chapter 2 (overview of Internet technology and value network), chapter 10 on sample analysis of Internet case.

The Hobbes' Internet History timeline

Shapiro & Varian: Introductory chapter (Chapter 1) [PDF handouts here]

From the recommended list: Utterback (introduction and chapter 1), Cairncross: chapter 1 and 4 and the "Trendspotter's guide", Garf & Spaf: Preface and pages 3-8. Appendix A (lessons from vineyard.net) and chapter 2.

Do: Visit MIT Media Lab's web page and see some of the interesting things they do with wearable computing.
Prepare: What do these terms mean? Are they important--and if so, why?

ADSL and SDSL, 802.11b and perhaps 802.11a

WAP, GPRS, EDGE, UMTS, POTS and VoIP

Firewire, USB, Bluetooth and especially Ricochet

SMTP, TCP/IP, URL, HTML, HTTP, SGML and especially XML

Java, DirectX and especially Jini

Consider: What does being digital mean? What characterizes a digital world?

2
Tuesday January 9th
9:00-12:00
Hanno Roberts Job and service costing
Intellectual Capital and Intellectual Assets
Read and be prepared to discuss:

Lovelock et al: Ch. 10 – Pricing services, pp. 343-368

Afuah and Tucci, Ch. 7 – Valuing and Financing an Internet Start-Up, pp. 106-120

Suggested readings

"Paying Respects", The Economist, May 20, 2000, p. 20

E-cash 2.0, The Economist, Feb. 19, 2000, p. 67

Shapiro & Varian, Ch. 5 and 6: (Recognizing and Managing Lock-In), pp.103-171

Too Few Pennies from Heaven, The Economist, July 1, 2000, p. 77

Karl Sveiby: Market Value of Intangible Assets

Consider:

3
Tuesday January 16th
9:00-12:00 CET
Hanno Roberts Business models Read and be prepared to discuss:

Afuah and Tucci, Ch. 6 – Value Configurations and the Internet Start-Up, pp. 87-105

Suggested readings:

Ch. 2 – The End of the Chain, pp. 21-44, from Mary J. Cronin (2000). Unchained Value: the new logic of digital business. Boston: Harvard Business School Press

There's Nothing On, The Economist, Oct. 7, 2000, p. 17

A Blueprint for Bricks to Clicks, Strategic Finance, Nov. 2000: 26-42, and Dec. 2000.

4
Wednesday January 17th
13:00-16:00
Hanno Roberts Pricing models Read and be prepared to discuss:

Ch. 9 – Pricing Knowledge: implementing new revenue models, Dawson, pp. 188-205

Ch. 2 – Pricing Information, Shapiro and Varian, pp. 19-51

Suggested readings

W. Chan Kim and Renée Mauborgne (2000). Knowing a Winning Business Idea When You See One, Harvard Business Review, September-October: 129-138.

Death of the Salesmen, The Economist, April 22, 2000, p. 63

Karl Sveiby: Intangible Revenues,

Karl Sveiby: Measuring Intangible Revenues,

Karl Sveiby: Fourteen Ways to Charge for Knowledge

Tracking down online content, Bizreport, Dec. 21st, 2000

Shame about the Statistics, The Economist, Dec. 23, 2000, p. 109

Net Wealth, The Economist, June 17, 2000, p. 84

5
Monday January 29th
9:00-12:00
Espen Andersen and/or Hanno Roberts Measurement concepts (BSC, CPI/Value Drivers, EFQM)
Performance measurement and control
Read and be prepared to discuss:

Ch. 6 – Scorecards as Management Control, pp. 146-188 from Nils-Göran Olve, Jan Roy and Magnus Wetter (1999). Performance Drivers. Chicester: Wiley.

Ch.7 - Networks and positive Feedback, Shapiro and Varian, pp. 173-225

Suggested reading

Karl Sveiby: The BSC and the IAM

Knowledge is Power, The Economist, Sep. 23, 2000, p. 29

Labours Lost, The Economist, July 15, 2000, p. 66

Scandinavian Models, The Economist, May 20, 2000, p. 19

Rebuilding the Garage, The Economist, July 15, 2000, p. 63

6
Monday January 29th
13:00-16:00
Espen Andersen and/or Hanno Roberts The Internet and power Read and be prepared to discuss:

Afuah and Tucci, chapter 3

Shapiro & Varian chapter 1, 2, 5 and 6

Case: www.gmbuypower.com (Afuah & Tucci case no 8 )

Case: Catatech Industries: The challenge of electronic commerce

Study questions:

how does electronic commerce affect Catatech?

what should Marisa Rivera do?

using Afuah and Tucci chapter 3, what is GM trying to do with gmbuypower.com. Why?

how does the introduction of the Internet into a value chain influence power?

Suggested reading:

Amor, Chapter 5, "Marketing Strategies on the Web."

Kalakota, Chapter 5, "Customer Relationship Management: Integrating Processes to Build Relationships."

Buday, Champy og Nohria's The Rise of the Electronic Community (for full article, see InformationWeek , June 10, 1996)

Espen Andersen: Internett som konkurransearena. Praktisk Økonomi og Ledelse, januar 1997 (in Norwegian, good luck to you all....)

Cairncross chapter 5 and 6

Extra lecture!
Wednesday January 31
9:00 - 11:30
Finn Øiens auditorium
BI main campus, Sandvika
Clayton M. Christensen The effect of disruptive growth on the vibrancy of companies and economies

Show up.

7
Wednesday February 7
13:00 - 16:00
Espen Andersen
Gjesteforeleser:
Erlend Bruvik, Stocknet B2B, B2C, P2P, D2D etc. Read and be prepared to discuss:

Visit stocknet.com and study their service and business model

Morgan Stanley Dean Witter's report on B2B business (read the first 2 parts, look over the rest). (Incidentally, this web site is a great source of good information on various things electronic and strategic.)

Case no. 4 (Verticalnet) in Afuah & Tucci

Study questions:

what are the differences between B2C and B2B?

why would a company want to join an electronic marketplace

why would it want to stay?

what is the value of Verticalnet?

how should Mark Walsh grow and develop the business?

8
Friday February 16th
9:00 - 12:00
Espen Andersen Getting it done - managing the business and technical development of an electronic business
Guest speaker: Mikkel Nielsen, Accenture: "The strategic development of an e-commerce project"
Read and be prepared to discuss (will change):

Chapter 9 (The General Manager and the Internet) in Afuah & Tucci

Shapiro & Varian: Chapters 5 and 6.

CIO Webmaster article on "Web wars" -- the conflict between Web developers and the traditional IT organization

Suggested reading:

Amor, Chapter 9, "Comparing Web Technologies."

Kalakota, Chapter 12, "Translating e-Business Strategy into Action."

9
Tuesday February 20th
9:00 - 12:00
(May be moved to the 21st or 22nd, will know shortly)
Espen Andersen Final class: Presentation of student work Be prepared to present your work

10
Tuesday March 22nd
9:00 - 12:00
Espen Andersen E-management, globalization and our technological future Read and be prepared to discuss:

Cairncross, F. (2000). “Inside the Machine: A Survey of E-Management.” The Economist (November 8).

Chapter 3 and 4 from Friedman, T. L. (1999). The Lexus and the Olive Tree. New York, Farrar, Strauss Giroux.

Chapter 8 from Afuah and Tucci

The following chapters (will be distributed) from Ray Kurzveil's The Age of Spiritual Computers:

Table of contents

Prologue

Chapter 6: Building new brains....

Chapter 9: 2009

Timeline 1 and timeline 2

Study questions:

what happens to companies in small countries with increased global competition?

what are the main effects of Internet on management of organizations?

how does Cairncross and Friedman's observations fit with your own experience?

what business opportunities do you see in a globalized setting?
What is Kurzveil's main argument about the evolution of computers and communication?

Do you agree? Why or why not?

Would you like to have a computer that is smarter than you? How would you manage it?

Literature
Required reading
These books are required reading:
Afuah, A. and C. L. Tucci (2000). Internet Business Models and Strategies: Text and Cases. Burr Ridge, IL, McGraw-Hill Irwin.
This new textbook, based largely on the value configurations framework created by Stabell and Fjeldstad, mixes theoretical summary and a good collection of cases of companies facing strategic choices in a digital world.
Shapiro, Carl & Hal R. Varian (1999) Information Rules : A Strategic Guide to the Network Economy, McGraw-Hill/Harvard Business School Press
(For more information, check out the dedicated Web site at http://www.inforules.com/.) In the words of The Economist: "These two Berkeley professors bring a discipline to their analysis that is usually quite absent from the overheated burblings of the cyberprophets... [This book is about] rigorous and practical strategies, based on solid foundations, for surviving and prospering in the network economy. [...] what is so likeable about this book--its fairmindedness and its wise pragmatism."

Almost required reading
This book is required reading unless you are very familiar with Web and computer technology and tools:
Amor, Daniel (1999): The E-business (R)evolution, Prentice-Hall
The "technology book" though there is little reason to feel intimidated even for confirmed non-techies. Very complete book on all aspects of life online, practically oriented and surprisingly up-to-date. And, for an added bonus, written by a European....
Recommended reading
These books, and a subscription (online, of course) to Industry Standard, Wired, Fast Company or the Red Herring (for the more financially inclined) is excellent background material (and interesting reading, whether you are doing this for grades or not).
Brown, Shona L. and Kathleen M. Eisenhardt (1998): Competing on the Edge: Strategy as Structured Chaos
Case studies of corporations competing mostly in the computer industry, and how they need to balance structure vs. creativity. Each dimension of organization is illustrated in terms on one company that is too rigid, one that is too loose, and one that has the right balance (at least for a while). Solid work.
Cairncross, Frances. (1997) The Death of Distance: How the communications revolution revolution will change our lives. Boston, MA: Harvard Business School Press.
(For more information, check out the dedicated Web site at http://www.deathofdistance.com/.) This excellently written book (the author is a writer for The Economist) lays out the business consequences of the revolution taking place in computers and communications. The book covers, in an irreverent yet informative way, most of the "big picture" aspects of the seminar. Relatively free of fluff and hype, relying instead on research and examples. Some of the book's content has previously been published in the Economist.

Christensen, Clayton M. (1997) The Innovator's Dilemma: Why New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press.
In this impressively researched book focusing on the hard disk drive industry, Clayton Christensen shows how listening to the customer and giving the customer what they want can get a company in trouble when the technology changes, even though the change may, at the time, seem technologically insignificant. A scary book for technology executives, definitely something that should have been read by IBM, Norsk Data, Digital, Wordperfect, Prime, Data General, Bull, ICL and other former greats of information technology.

Garfinkel, Simson and Gene Spafford (1996). Web Security and Commerce, O'Reilly and Associates
This down-to-earth, hands-on description of tools and technologies for setting up and managing web services provides the details where Cairncross' book gives the big picture. A great reference for people wanting to roll their own Web service, including some wonderful war stories on setting up their own ISP from two seasoned technology writers and tinkerers. However, as with all books about specific technologies, its illustrations quickly age.

McKenney, J. (1994). Waves of Change: Business Evolution Through Information Technology, Boston, MA: Harvard Business School Press.
McKenney, Professor Emeritus and former Chairman of the MIS group at Harvard Business School, provides an account of the development and implementation processes for two of the world's most consequential information systems: Bank of America's check processing system, the model for most of the banking systems we know today; and American Airlines' SABRE, the first computerized reservation system and still the largest privately owned real-time system in the world. From the history of these two system, McKenney develops a "cascading" model of technology development and implementation, and then proceeds to test this model against three other case histories of successful "classic" system cases: Frito-Lays data capture and pricing system within snacks distribution, USAA's use of document imaging and centralized customer information systems within insurance, and American Hospital Supply's revolutionizing ASAP-system for selling and distributing hospital supplies.

Utterback, J. M. (1994). Mastering the Dynamics of Innovation. Boston, MA: Harvard Business School Press
Utterback is a professor at MIT and a pioneer in the field of technology evolution. This book describes the process of technology evolution in a number of industries, from computer chips to a fabulous chapter on the ice industry (where Norway was a very important player on the world market.). A theoretically robust model for technology evolution as a process of evolution and revolution is detailed, a model which is crucial for our understanding of the likely changes we are facing in our increasingly digital business world. This book offers the theoretical weight necessary to put Negroponte's more aggressive statements into a broader context.

Bits: whatever you may find at BRINT or other places on the Net with relevance for the theme of the day.

BI Stiftelsens hjemmeside

Espen Andersen's home page
Last updated: March 13, 2001.

Comments to Espen Andersen

Date/lecturer	Topic	Preparation
1 Friday January 5th 13:00-16:00 Espen Andersen	Introduction to the course, a discussion of Internet trends. Course content and preparation.	Read and be prepared to discuss: Afuah & Tucci: Chapter 2 (overview of Internet technology and value network), chapter 10 on sample analysis of Internet case. The Hobbes' Internet History timeline Shapiro & Varian: Introductory chapter (Chapter 1) [PDF handouts here] From the recommended list: Utterback (introduction and chapter 1), Cairncross: chapter 1 and 4 and the "Trendspotter's guide", Garf & Spaf: Preface and pages 3-8. Appendix A (lessons from vineyard.net) and chapter 2. Do: Visit MIT Media Lab's web page and see some of the interesting things they do with wearable computing. Prepare: What do these terms mean? Are they important--and if so, why? ADSL and SDSL, 802.11b and perhaps 802.11a WAP, GPRS, EDGE, UMTS, POTS and VoIP Firewire, USB, Bluetooth and especially Ricochet SMTP, TCP/IP, URL, HTML, HTTP, SGML and especially XML Java, DirectX and especially Jini Consider: What does being digital mean? What characterizes a digital world?
2 Tuesday January 9th 9:00-12:00 Hanno Roberts	Job and service costing Intellectual Capital and Intellectual Assets	Read and be prepared to discuss: Lovelock et al: Ch. 10 – Pricing services, pp. 343-368 Afuah and Tucci, Ch. 7 – Valuing and Financing an Internet Start-Up, pp. 106-120 Suggested readings "Paying Respects", The Economist, May 20, 2000, p. 20 E-cash 2.0, The Economist, Feb. 19, 2000, p. 67 Shapiro & Varian, Ch. 5 and 6: (Recognizing and Managing Lock-In), pp.103-171 Too Few Pennies from Heaven, The Economist, July 1, 2000, p. 77 Karl Sveiby: Market Value of Intangible Assets Consider:
3 Tuesday January 16th 9:00-12:00 CET Hanno Roberts	Business models	Read and be prepared to discuss: Afuah and Tucci, Ch. 6 – Value Configurations and the Internet Start-Up, pp. 87-105 Suggested readings: Ch. 2 – The End of the Chain, pp. 21-44, from Mary J. Cronin (2000). Unchained Value: the new logic of digital business. Boston: Harvard Business School Press There's Nothing On, The Economist, Oct. 7, 2000, p. 17 A Blueprint for Bricks to Clicks, Strategic Finance, Nov. 2000: 26-42, and Dec. 2000.
4 Wednesday January 17th 13:00-16:00 Hanno Roberts	Pricing models	Read and be prepared to discuss: Ch. 9 – Pricing Knowledge: implementing new revenue models, Dawson, pp. 188-205 Ch. 2 – Pricing Information, Shapiro and Varian, pp. 19-51 Suggested readings W. Chan Kim and Renée Mauborgne (2000). Knowing a Winning Business Idea When You See One, Harvard Business Review, September-October: 129-138. Death of the Salesmen, The Economist, April 22, 2000, p. 63 Karl Sveiby: Intangible Revenues, Karl Sveiby: Measuring Intangible Revenues, Karl Sveiby: Fourteen Ways to Charge for Knowledge Tracking down online content, Bizreport, Dec. 21st, 2000 Shame about the Statistics, The Economist, Dec. 23, 2000, p. 109 Net Wealth, The Economist, June 17, 2000, p. 84
5 Monday January 29th 9:00-12:00 Espen Andersen and/or Hanno Roberts	Measurement concepts (BSC, CPI/Value Drivers, EFQM) Performance measurement and control	Read and be prepared to discuss: Ch. 6 – Scorecards as Management Control, pp. 146-188 from Nils-Göran Olve, Jan Roy and Magnus Wetter (1999). Performance Drivers. Chicester: Wiley. Ch.7 - Networks and positive Feedback, Shapiro and Varian, pp. 173-225 Suggested reading Karl Sveiby: The BSC and the IAM Knowledge is Power, The Economist, Sep. 23, 2000, p. 29 Labours Lost, The Economist, July 15, 2000, p. 66 Scandinavian Models, The Economist, May 20, 2000, p. 19 Rebuilding the Garage, The Economist, July 15, 2000, p. 63
6 Monday January 29th 13:00-16:00 Espen Andersen and/or Hanno Roberts	The Internet and power	Read and be prepared to discuss: Afuah and Tucci, chapter 3 Shapiro & Varian chapter 1, 2, 5 and 6 Case: www.gmbuypower.com (Afuah & Tucci case no 8 ) Case: Catatech Industries: The challenge of electronic commerce Study questions: how does electronic commerce affect Catatech? what should Marisa Rivera do? using Afuah and Tucci chapter 3, what is GM trying to do with gmbuypower.com. Why? how does the introduction of the Internet into a value chain influence power? Suggested reading: Amor, Chapter 5, "Marketing Strategies on the Web." Kalakota, Chapter 5, "Customer Relationship Management: Integrating Processes to Build Relationships." Buday, Champy og Nohria's The Rise of the Electronic Community (for full article, see InformationWeek , June 10, 1996) Espen Andersen: Internett som konkurransearena. Praktisk Økonomi og Ledelse, januar 1997 (in Norwegian, good luck to you all....) Cairncross chapter 5 and 6
Extra lecture! Wednesday January 31 9:00 - 11:30 Finn Øiens auditorium BI main campus, Sandvika Clayton M. Christensen	The effect of disruptive growth on the vibrancy of companies and economies	Show up.
7 Wednesday February 7 13:00 - 16:00 Espen Andersen Gjesteforeleser: Erlend Bruvik, Stocknet	B2B, B2C, P2P, D2D etc.	Read and be prepared to discuss: Visit stocknet.com and study their service and business model Morgan Stanley Dean Witter's report on B2B business (read the first 2 parts, look over the rest). (Incidentally, this web site is a great source of good information on various things electronic and strategic.) Case no. 4 (Verticalnet) in Afuah & Tucci Study questions: what are the differences between B2C and B2B? why would a company want to join an electronic marketplace why would it want to stay? what is the value of Verticalnet? how should Mark Walsh grow and develop the business?
8 Friday February 16th 9:00 - 12:00 Espen Andersen	Getting it done - managing the business and technical development of an electronic business Guest speaker: Mikkel Nielsen, Accenture: "The strategic development of an e-commerce project"	Read and be prepared to discuss (will change): Chapter 9 (The General Manager and the Internet) in Afuah & Tucci Shapiro & Varian: Chapters 5 and 6. CIO Webmaster article on "Web wars" -- the conflict between Web developers and the traditional IT organization Suggested reading: Amor, Chapter 9, "Comparing Web Technologies." Kalakota, Chapter 12, "Translating e-Business Strategy into Action."
9 Tuesday February 20th 9:00 - 12:00 (May be moved to the 21st or 22nd, will know shortly) Espen Andersen	Final class: Presentation of student work	Be prepared to present your work
10 Tuesday March 22nd 9:00 - 12:00 Espen Andersen	E-management, globalization and our technological future	Read and be prepared to discuss: Cairncross, F. (2000). “Inside the Machine: A Survey of E-Management.” The Economist (November 8). Chapter 3 and 4 from Friedman, T. L. (1999). The Lexus and the Olive Tree. New York, Farrar, Strauss Giroux. Chapter 8 from Afuah and Tucci The following chapters (will be distributed) from Ray Kurzveil's The Age of Spiritual Computers: Table of contents Prologue Chapter 6: Building new brains.... Chapter 9: 2009 Timeline 1 and timeline 2 Study questions: what happens to companies in small countries with increased global competition? what are the main effects of Internet on management of organizations? how does Cairncross and Friedman's observations fit with your own experience? what business opportunities do you see in a globalized setting? What is Kurzveil's main argument about the evolution of computers and communication? Do you agree? Why or why not? Would you like to have a computer that is smarter than you? How would you manage it?