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Competitive Strategies for Network Economies

• Everything Old is New Again
• Again
• And the one New Lesson

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Bad Economy?
Welcome Mike! Scheduled Assignment(s) You do
not have any FUTURE assignments scheduled.
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Course Outline

• The Challenge of Global Internet Markets
• Information as a Commodity
• Price Discrimination Strategies
• Rights Management
• Lock-In
• Understanding Network Economies
• Compatibility and Standards
• The Future of Regulation

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Globalization

• Not U.S. Law, but the law of all nations
  must be considered
• If a right is not protected in one country, then
  it is not protected!
• Challenges
• Property rights vs. moral rights
• Privacy issues
• Global antitrust

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Information as a Commodity

• Pure information is priceless!
• Priceless great value
• Priceless cannot price
• Presentation
• Consolidation CREATE VALUE
• Search TO CAPTURE
• Relevance VALUE
• Timeliness

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Price Discrimination

• Easier to personalize
• Harder to cheat with prices
• Price information is available
• Comparison shopping is costless
• Add individual value
• Customize relevant prices
• Different prices, same book No!
• Different prices for online or paper!

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Rights Management

• Depending on legal protection?
• National irrelevant
• International - unlikely
• Depending on technology protection?
• Build a better mousetrap
• Evolve a better mouse
• Create a business plan which adapts to the
  reality of right protection

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Lock-In

• Once customers are locked in, they
  can be abused!
• No one ever became poor by underestimating the
  intelligence of the consumer?
• Or lock in consumers through mutually beneficial
  programs
• Create value to capture value

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Network Economies

• Networks generate value on both sides
• Positive feedback
• Economies of scale
• But not all networks are global!
• Whos heard of
  Autodesk or Compuware?
• Dont miss the trees for the forest!