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STRATEGY & THE NEW
ECONOMICS OF
INFORMATION
Presented by:
Aditya Chiranjeevi
Kumar Prateek
Sravani Gangadhar
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INTORDUCTION
STRATEGY: According to Henry Mintzberg
Strategy is a plan, a "how," a means of
getting from here to there.INFORMATION: it is the quality of
message from a sender to one or more
receivers, it could be anything like size of parameters, occurance of an events or
values or ethics & etc.
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Economics: it is a study of mankind in the
ordinary business of life. It examines that part
of individual & social action which is mostclosely connected with the attainment & with
the use of material requisites of well-being
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Prominence of information
Huge representative of cost structure
eg: health care spends 1/3rd or $350b on costassociated with information capturing storing
processing & etcEven low tech products required market
research like of Walt-marts logistics dept
Various dependence on information
1. customers loyalty
2. employees loyalty
3. supply relationship
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4. brand identity
5. process coordination
6. switching costs etc
information is equally emphasized asphysical activities related to products
like by; Walt-mart, American airlines, Nike
True explosion in connectivity
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Trade of Between Reach and
Richness
The economics of information is governed by abasic law i.e.; trade of between reach & richness
Reach: means the number of people, at home or atwork, exchanging information.
Richness: quality of information, accuracy,bandwidth currency, interactivity, etc.
Richness can be formulated by three aspects of theinformation itself
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1, band with- the amount of information that can bemoved from sender to receiver in a given time
2, customization is degree to which the informationcan be customized
3, interactivity dialogue is possible for a smallgroup, but to reach millions of people the message
must be a monologue A pervasive trade of shapes company's strategy
for e.g.: a company's marketing mix
converse and inverse relationships
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Richness
Reach
Wal-Mart, Toyota (EDI)
Citibank (trading)
Richness and Reach
positioning
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Prescription by a economic
theory
Pioneered by Ronald h.coase
Boundaries are set by economics ofexchanging information like organizations
and markets
Trade of business is a fundamental principleEmergence of open, new technological
standards like internet extranet & intranet
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Demantling value chain
structureNeed of deconstruction
Invasion by hi-fi, hi-tech electronic tablets
Invatable transformation
in newspapers
merits of unbundling
acclimatising to the changes
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Retail banking
Emergence of new distribution channels
New versions and varieties in banking like
intuits quicken and Microsoft money
Deconstruction not and unprecedented
change
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