Class 3: Why are standards made? Examining strategic business goals
Class 3 focuses on economic and business strategy issues: why might a firm pursue a standards strategy? Who benefits, and who loses, when technology standards are established? Why are standards so important in information and communications technology (ICT) markets?
The reading material for this class is excerpted from Carl Shapiro and Hal Varian’s 1999 book Information Rules: A Strategic Guide to the Information Economy. While time has dated the specific examples cited in the book, the principles that Shapiro and Varian discuss remain directly relevant, and the material provides an excellent introduction to key business strategy and economic considerations that drive technology standards.
Readings:
Excerpts from Information Rules: A Strategic Guide to the Information Economy (all in .pdf):
- Selections from Chapter 1 (“The Information Economy”)
- Selections from Chapter 7 (“Networks and Positive Feedback”)
- Selections from Chapter 8 (“Cooperation and Compatibility”)
- Selections from Chapter 9 (“Waging a Standards War”)
[Note: the excerpts provided here are used under a fair use theory and are not subject the the Creative Commons license cited in the footer of this site.]
Optional readings:
Gawer, Annabelle and Henderson, Rebecca M., Platform Owner Entry and Innovation in Complementary Markets: Evidence from Intel (December 2005). NBER Working Paper Series, Vol. w11852, pp. -, 2005. Available at SSRN: http://ssrn.com/abstract=872715 (abstract only) or http://platformleadership.com/articles/platformentry.pdf (full article, .pdf).
Book summary: Platform Leadership How Intel, Microsoft, and Cisco Drive Industry Innovation, Annabelle Gawer and Michael A Cusumano (Harvard Business School Press, 2002). http://www.platformleadership.com/articles/Case%20Folio.pdf
Discussion Questions:
[no advance questions for this class]
Slides:
Linked here in .pdf and here in .ppt.
