Information-Based Strategies

The field of strategy is constantly evolving as the competitive environmentfacing firms changes. One of the most significant changes has been thedramatically falling costs and increasing speeds and volumes of transmittingand processing of information. This ongoing phenomenon is changing thestructure of entire industries and is altering the profitable opportunities availableto many firms. The ability to target profitable market segments and to identifyindividual customers is reducing the value of scale-based operations and thestrategic advantage of large firms with existing market share. The ability tomonitor the performance of business units abroad, without regard to distance ortime zones, is increasing the value of cooperative partnerships. This is leadingto greater reliance upon outsourcing, benefiting manufacturing as well as manyservice industries. At the same time, the impact of information technology onthe transparency and efficiency of securities markets is destroying the profits ofentire segments of financial services. All aspects of the firm - production,service, sales, marketing, and strategy - are affected.The increase in information available to firms, and the increasing variety ofstrategies available for the use of information - from dynamic repricing to onlinedistribution, from labor productivity enhancements to labor arbitrage, andautomation and outsourcing - requires a revision of strategic decision-makingmodels in an increasingly digital age. Clearly, some firms will win and otherswill lose; nearly all will have to change. And yet, fundamental laws ofeconomics have not been repealed. How can previous economic theory, andprevious experience with rapid technological change, provide insights for thedevelopment of sound, information-based strategies? To answer this question,the course integrates recent experience in the impact of information technologyupon diverse industries with relevant theory.