The Power of Patterns and Pattern Recognition When Developing Information-Based Strategy

Abstract

Just as scientists in other disciplines use experience and a small set of frequently occurring problems to structure unfamiliar situations, information strategy and economics provides its own patterns to guide and structure the use of experience in managerial settings. These patterns emerged through case studies, theoretical derivations, and empirical analyses of company, industry, and national data sets. The six most frequently observed patterns identified here are (1) newly vulnerable markets experience opportunistic pickoff; (2) transparency of product attributes increases informedness, enabling resonance marketing and increasing the benefits from offering truly differentiated products and services; (3) changes in transaction costs have changed the boundary of the firm; (4) unique resources endowments can confer or sustain competitive advantage; (5) the geometry of distribution determines power and affects profitability; and (6) network-based advantages can form the basis of platformenvelopment strategies. Finally, prospects for the future of information, strategy, and economics over the coming two decades are reviewed.

Keywords:

• hyperdifferentiation
• newly vulnerable markets
• outsourcing risks
• platform envelopment strategies
• resonance marketing
• resource-based competitive advantage
• strategic information systems
• transaction costs of outsourcing