Industrial Infonomics

Infonomics

Dr. Elijah EzenduFIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,

PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr

“Infonomics is an interdisciplinary science studying societal and technological dimensions of knowledge evolution in digital society.” - e-Centre for Infonomics

“Infonomics is an interdisciplinary science studying evolution of and processes within the information society. By its nature, infonomics is the intelligent management of information.” - International Journal for Infonomics

Value of Information

Value of information is dependent on expected improvement of decision outcome.

Hence, if the impact of information does not lead to change in expected decision outcome, then the value of that particular information in the scenario is zero.

Information as a Commodity

a. It gains from low marginal costs (cheap reproduction)

b. It’s influenced by market conditionsc. Rising Commoditization of information

increases threat to producersd. The creation cost is normally high

Steps in Developing Information Market

• Identify target customers/prospects• Decide on “information branding”• Resolve cost and value effectively for

obtaining equitable price• Monitor competition• Evaluation

Protective measures over created information provides opportunity for monopolization

Copyright can be defined as the exclusive right to make and dispose copies of a literary, musical or artistic work. Its purpose is to protect expression and to encourage creators to contribute more towards their fields.

Dimensions of Copyrights

Length = term of copyrightWidth = extent of coverageHeight = restriction that no substantial work

can be copyrighted

The principle of Indirect Appropriability

The principle of indirect appropriability states that price increases when the right to copy is given.

Pricing Strategy for Digitized Information

The elasticity of demand for officially authorized copies of a distinctive work amid sweeping opportunities for obtaining illegal ones show great dependence on price.

The Surge of Digitized Information

As a result of reduced cost in creating and distributing digitized information, an unprecedented surge had increased the scope of competition, thus reducing the price consumers are required to pay today.

The Advent of Multi-Access

The dawn of information economy gave rise to birthing extensive information access systems, wherefore consumers find easy multi-access to digital copies that can be distributed without ruckus.

Major Effects of Multi-Access

High piracy rate Negation of copyright enforcement Reduction in perceptible value of intellectual work in

non-complying countries. Unwholesome advantage for Chinese Producers Discouragement of genuineness Rise in per capita Gross Domestic Product of China Diseconomy of Innovation

How Digital Technology Influences Intellectual Property Rights Management1. Reduction in transaction costs2. Lowers production and distribution costs3. Reduction in Reproduction costs4. Rise of e-Library5. Rise of new media video (flash enabled system)6. Allows initial free samples, thereafter consumers must pay7. Building on trade-off between control and customer value8. Provides opportunity for boosting revenue by increasing sales

volume.9. Using complementary products to sell the core content10. Increase visibility of products through e-commerce portals

Dealing with International IP Problem

Enhancing protection at home Pressurizing ‘rogue’ nations Filing complaints with international

organizations Amending current laws Isolation Mediation Arbitration

Versioning

This involves altering characteristics of information products to underscore variation in customer value.

Bundling

This is a special type of versioning in which two or more distinct products are offered as a single package.

Customized bundle is an offering that allows consumers to build their own bundles

Online and Offline Versions

• Identify the characteristic differences between online and offline versions

• Ascertain the strength of online version in stimulating sales

Drawbacks of Versioning

• Lack of clear differentiation in versions

• Ease of turning low-end into high-end version

Standards War

Standards war is a battle between two new incompatible technologies and their struggle to become a leader in the market. The outcome of these wars may end up in a truce between the technologies, a duopoly or a fight to death.

Compatible

Incompatible

Compatible Incompatible

Rival Evolution

Evolution vs

Revolution

Revolution vs

EvolutionRival Revolution

Classification of Wars

Adapted from Shapiro and Varian, Standard Wars

Examples of Wars

• Rival Evolution: Video Machines• Rival Revolutions: DVD vs. High Density Disks• Evolution vs. Revolution: Windows 98 vs.

Rhapsody

Further Examples of Wars• In Nigeria, Starcomm’s Code Division Multiple

Access (CDMA) vs. MTN’s Global System for Mobile (GSM)

• In USA, Ericsson’s Time Division Multiple Access (TDMA) via AT&T, SBC, BellSouth vs. Qualcomm’s Code Division Multiple Access via Bell Atlantic, US West

Microsoft vs. Netscape

• Rival Evolutions• Low Switching Costs• Small Network Externalities• Strategies: Pre-emption, Penetration

Pricing, Expectations Management and Alliances.

Key Assets for Winning Standards Wars

1. Intellectual Property Rights2. Ability to Innovate3. Control over an Installed Base4. Manufacturing Ability5. Reputation and Brand Name6. Strength in Complements7. First-Mover Advantages

Strategies for Winning Standards War

Pre-emption: Set-up early lead such that positive feedback works for you and against your rival.

Managing Expectation of Consumers: This can be done through allies.

The Effects of Standards

• Improvement in compatibility and interoperability

• Greater value for consumers• Reduction of uncertainty• Reduces consumer lock-in• Shifts attention from features to prices• Shifts competition from winner-takes-all to

battle for market share• Provides credibility to new technology

Lock-in

A condition in which consumers become dependent on a single manufacturer or supplier for product or service, such that they would not be able to move from one vendor to another without substantial cost and inconvenience.

How do Vendors Build Lock-In?• Intentionally encouraging non-compatibility of technology• The use of vaporware to prevent competitors from

developing products with similar features as well as keep customers away from switching to competitor’s products.

• Durable investment in complementary tool such as hardware or software

• Information and database dependency• Long contractual commitment• High switching cost• Brand-specific training• Loyalty Programmes• Specialized Suppliers

Lock-in Cycle

Lock-in Dilemma

Lock-in is useful for keeping customers in the short-run, however in the long run it can cause irritation that can initiate compelling switching and consumer boycott.

Managing Lock-in (For Buyers)

i. Put a ceiling on vulnerabilityii. Ensure contracts are well-structurediii. Identify indistinct commitmentiv. Recognize tiptoeing lock-in v. Compare current value to whole cyclevi. Outfox predation chargesvii. Steer clear of frequent upgrades to newer versionsviii. Ascertain level of switching cost and inconvenienceix. Structure appropriate deal

Managing Lock-in (For Sellers)

Dr. Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant with expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, Business Development, Sales & Marketing, Interim Management, CSR, Leadership, Project & Programme Management, Cost Management, Outsourcing, Franchising, Intellectual Capital, eBusiness, Social Media, Software Architecture, Cloud Computing, eLearning & International Business. He holds proprietary rights of various systems. He is currently CEO, Rubiini (UAE); Hon. President, Worldwide Independent Inventors Association; Special Advisor, RTEAN; Director, MMNA Investments Limited. He had functioned as Chair, International Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting; Chairman (Certification & Training), Coordinator (Board of Fellows), Lead Assessor & Governing Council Member, Institute of Management Consultants, Nigeria; Lead Resource, Centre for Competitive Intelligence Development; Turnaround Project Director, Consolidated Business Holdings Limited; Lead Consultant/ Partner, JK Michaels; Technical Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles), Fortuna, Gambia & Malta; Director, The Greens; Chief Advisor/Partner, D & E; Vice Chairman, Refined Shipping; Director of Programmes & Governing Council Member, Institute of Business Development, Nigeria; Member of TDD Committee, International Association of Software Architects, USA; Member of Strategic Planning and Implementation Committee, Chartered Institute of Personnel Management of Nigeria; Adjunct Faculty, Regent Business School, South Africa; Adjunct Faculty, Ladoke Akintola University of Technology, Nigeria; Editor-in-Chief & Chairman of Editorial Board, Cost Management Journal; National Executive Council Member, Institute of Internal Auditors of Nigeria; Member, Board of Directors (Several Organizations). He holds Doctoral Degree in Management, Master of Business Administration and Fellowship of Several Professional Institutes in North America, UK & Nigeria. He is an author & widely featured speaker in workshops, conferences & retreats. He was involved in developing Specialist Master’s Degree Course Content for Ladoke Akintola University of Technology (Nigeria) and Jones International University (USA). He holds Interim Management Assignments on Boards of Companies as Non-Executive Director.

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