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CMIT DBI - A digital battle field: how do Internet giants compete?*

Faculty
Moshe Yonatany
Course Coordinator
Moshe Yonatany
Course content, structure and teaching
The course portrays the Internet as an exciting competitive arena for firms providing digital goods and services, such as Facebook and Google. Concepts, models, and economic principles that are useful in analyzing the digital battle field will be taught and applied on real-life cases. The special characteristics of the industry will be integrated with strategic management theories in order to understand the global competition among such firms.
The main topics of the course are: the special characteristics of the industry; the knowledge based view of the firm and dynamic capabilities; networks and ecosystems, the internationalization process of digital firms; competition in global markets; open source software; crowdsourcing; and the online advertising industry.
The course combines teaching and class discussions. In addition, students will apply the course’s theories and concepts trough group presentations of contemporary case studies.
The course's development of personal competences
Students will learn professional terminology, concepts, models, theories, real-life examples and cases, key issues and key solutions relevant for the global competitiveness of digital firms.
Learning Objectives
After a successful completion of the course participants will be able to:
· Independently identify, select and combine key theoretical concepts taught in the course, and apply them on real business cases
· Critically evaluate and compare the internationalization process of Internet-enabled firms with that of industrial manufacturers (physical products)
· Explain in depth, asses and analyze business implications derived from the economic characteristics of digital information goods, focus on implications for business strategy
· Identify and analyze the special attributes of the online advertising industry
· Analyze and critically evaluate the competitive dynamics in the global digital arena; develop and present suggested course of action based on such analysis
Type of examination, exam aids and assessment
Individual oral exam (20 min) on the basis of a synopsis (max 5 pages)
Recommended literature
Syllabus: CMIT_DBI: A Digital Battle Field: How Do Internet Giants Compete?
1. Defining our context
Arthur (1996): Increasing Returns and the Two worlds of Business, Harvard Business Review, July-August, pp. 100-109
Rindova & Kotha (2001): Continuous “Morphing”: Competing Through Dynamic Capabilities, Form, and Function, Academy of Management Journal, 44, 6, 1263-1280
Hui & Chau (2002): Classifying Digital Products, Communications of the ACM, 45, 6, pp.73-79
Anderson (2004): The Long Tail, Wired, No. 10
Gupta & Mela (2008): What is a Free Customer Worth? Harvard Business Review, November, pp. 102-109
O’Reilly & Battelle (2009): Web Squared: Web 2.0 Five Years On, www.web2summit.com (web squared white paper)
Total: 63 pages
2. Building capabilities
Kogut & Zander (1992): Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology, Organization Science, 3,3, pp. 383-397
Teece, Pisano & Shuen (1997): Dynamic Capabilities and Strategic Management, Strategic Management Journal, 18,7, pp. 509-533
Barkema & Drogendijk (2007): Internationalising in Small, Incremental or Larger Steps? Journal of International Business Studies, 38, pp. 1132–1148
Iyer and Davenport (2008): Reverse Engineering Google’s Innovation Machine, Harvard Business Review, pp. 59-68
Total: 67 pages
Case I: Google’s search engine development
Case II: the development of Yahoo! Search
3. Building an ecosystem
Moore (1993): Predators and Prey: a New Ecology of Competition, Harvard Business Review, May-June 1993, pp. 75-86
Afuah (2000): How Much do Your Co-opetitors’ Capabilities Matter in the Face of Technological Change? Strategic Management Journal, 21, pp. 387-404
Gulati, Nohria & Zaheer (2000): Strategic Networks, Strategic Management Journal, 21, 3, pp. 203-215
Lansiti & Levien (2004): Strategy as Ecology, Harvard Business Review, March 2004, pp. 68-78
Hagel, Brown & Davison (2008): Shaping Strategy in a World of Constant Disruption, Harvard Business Review, October 2008, pp. 81-89
Total: 63 pages
Case I: MySpace’s third party developers
Case II: FaceBooks’ third-party developers
4. Going global
Johanson & Vahlne (1977): The Internationalization Process of the Firm - a Model of Knowledge Development and Increasing Foreign Market Commitments, Journal of International Business Studies, 8, 1, pp. 23-32.
Kim (2003): The Internationalization of US Business Portals: Does it Fit the Process Model of Internationalization? Marketing Intelligence & Planning, 21, 1, pp. 23-36
Mahnke & Venzin (2003): The Internationalization Process of Digital Information Good Providers, Management International Review, Special Issue, 1, pp. 115-142
Total: 61 pages
Case I: FaceBook’s internationalization
Case II: eBay’s internationalization (focus on the entry to Japan)
5. Competing internationally
Ferrier, Smith and Grimm (1999): The Role of Competitive Action in Market Share Erosion and Industry Dethronement: a Study of Industry Leaders and Challengers, Academy of Management Journal, 42, 4, pp. 372-388.
Lee, Smith, Grimm & Schomburg (2000): Timing, Order and Durability of New Product Advantages with Imitation, Strategic Management Journal, 21, 1, pp. 23-30.
Kotha, Rindova and Rothaermel (2001): Assets and Actions: Firm-Specific Factors in the Internationalization of U.S. Internet Firms, Journal of International Business Studies, 32, 4, pp.769-791
Carr (2007): Baseline, November 2007, Issue 78, pp. 26-36
William Blair & Company (2007): Google Inc./Yahoo! Inc., Research Note, August 21, 2007
Total: 65 pages
Case I: the competitive dynamics of FaceBook and MySpace
Case II: the competitive dynamics of Yahoo and Google
6. Exploiting open source software
Von Hippel and Von Krogh (2003): Open Source Software and the “Private-Collective” Innovation Model: Issues for Organizations, Organization Science, 14, 2, pp. 209-223
Lerner and Tirole (2005): The Economics of Technology Sharing: Open Source and Beyond, Journal of Economic Perspectives, 19 (2), pp. 99-120
Fitzgerald (2006): Transformation of Open Source Software, MIS Quarterly, 30, 3, pp. 578-598
Total: 62 pages
Case I: Google’s open source projects
Case II: Yahoo’s open source projects
7. Exploiting crowdsourcing
Gneezy and Rustichini (2000): A fine is a Price, The Journal of Legal Studies, 29, 1, pp. 1-17
Heyman & Ariely (2004): Effort for Payment, Psychological Science, 15, 11, pp. 787-793
Vohs, Mead & Goode (2006): The Psychological Consequences of Money, Science, 314, pp. 1154-1156
McAfee (1996): Enterprise 2.0: The Dawn of Emergent Collaboration, Sloan Management Review, 47,3, pp. 20-29
Cook (2008): The Contribution Revolution, Harvard Business Review, October 2008, pp. 60-69
Vohs, Mead & Goode (2008): Merely Activating the Concept of Money Changes Personal and Interpersonal Behavior, Current Directions in Psychological Science, 17, 3, pp. 208-212
Huberman, Romeo and Wu (2009): Crowdsourcing, Attention and Productivity, Journal of Information Science, pp. 1-8
Majchrzak, Cherbakov & Ives (2009): Harnessing the Power of the Crowds with Corporate Social Networking Tools: How IBM Does It, MIS Quarterly Executive, 8, 2, pp. 103-108
Total: 66 pages
Case I: Crowdsourcing at YouTube
Case II: Crowdsourcing at MySpace
8. Fighting for advertisements
Eisenmann, Parker & Van Alstyne (2006): Strategies for Two-Sided Markets, Harvard Business Review, October 2006, pp. 92-101
Evans (2008): The Economics of the Online Advertising Industry, Review of Network Economics, 7, 3, pp. 359-391
Evans (2009): The Online Advertising Industry:Economics, Evolution, and Privacy, Journal of Economic Perspectives, 23, 3, pp. 37–60
Total: 67 pages
Case I: Google-Yahoo’s (almost) advertising deal
Case II: Advertising in social networks (FaceBook/MySpace)

Last updated by Electives Secretariat 18/08/2010