For a thorough discussion on how interconnected, smart devices can affect competition and strategy, see Michael E. Porter and James E. Heppelman, “How Smart, Connected Products Are Transforming Competition,” Harvard Business Review, November 2014, 64–88.
Chapter 1
For very insightful early work on strategy in the context of the internet, see Michael E. Porter, “Strategy and the Internet,” Harvard Business Review, March 2001, 62–78; Raphael Amit and Christoph Zott, “Value Creation in E-business,” Strategic Management Journal 22, no. 6–7 (2001): 493–520; and Adrian J. Slywotzky, Karl Weber, and David J. Morrison, How Digital Is Your Business? (New York: Crown Business, 2000).
For more detail on business models and business model design, see the following works by Raphael Amit and Christoph Zott: “Business Model Design and the Performance of Entrepreneurial Firms,” Organization Science 18, no. 2 (2007): 181–199; “The Fit between Product Market Strategy and Business Model: Implications for Firm Performance,” Strategic Management Journal 29, no. 1 (2008): 1–26; “Business Model Design: An Activity System Perspective,” Long Range Planning 43, nos. 2–3 (2010): 216–226.
For a discussion of the willingness-to-pay concept and foundational work on the concept of “value,” see Adam M. Brandenburger and Harborne W. Stuart, Jr., “Value-Based Business Strategy,” Journal of Economics and Management Strategy 5, no. 1 (1996): 5–24; and Adam M. Brandenburger and Barry J. Nalebuff, Coopetition (New York: Doubleday, 1996).
The customer journey has its intellectual foundation in the work by Ian McMillan and Rita McGrath on the consumption chain. See Ian MacMillan and Rita Gunther McGrath, “Discovering New Points of Differentiation,” Harvard Business Review, July–August 1997, 133–138, 143–145; and Rita Gunther McGrath and Ian MacMillan, The Entrepreneurial Mindset; Strategies for Continuously Creating Opportunity in an Age of Uncertainty (Boston: Harvard Business School Press, 2000).
For a wide-ranging discussion of new technologies and their impact on industries, firms, and society, see Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York: Norton, 2016); and Andrew McAfee and Erik Brynjolfsson, Machine, Platform, Crowd: Harnessing Our Digital Future (New York: Norton, 2017).
The pioneering work of our colleagues at Penn, in particular Kevin G. Volpp and David A. Asch, provides a number of great ideas for how patient care might be redesigned through the introduction of principles of behavioral economics into the domain of medicine. We discuss several examples of their research in other chapters.
The work by Christian Terwiesch, David Asch, and Kevin Volpp looks at problems of introducing connected health care in greater detail. See Christian Terwiesch, David Asch, and Kevin Volpp, “Technology and Medicine: Reimagining Provider Visits as the New Tertiary Care,” Annals of Internal Medicine 167, no. 11 (2017): 814–815.
For a delightful exposition on the origins of the phrase “on the shoulders of giants,” see Robert K. Merton, On the Shoulders of Giants: A Shandean Postscript (New York: Free Press, 1965).
For more on platform strategies, see Marshall W. Van Alstyne, Geoffrey G. Parker, and Sangeet Paul Choudary, “Pipelines, Platforms, and the New Rules of Strategy,” Harvard Business Review, April 2016, 54–60.
For the number of active Pokemon Go players, see Craig Smith, “85 Incredible Pokemon Go Statistics and Facts,” DMR, May 5, 2018, https://expandedramblings.com/index.php/pokemon-go-statistics/.
For more details on Rolls-Royce’s transition from products to services, see “Power by the Hour,” Rolls-Royce, accessed October 24, 2018, https://www.rolls-royce.com/media/our-stories/discover/2017/totalcare.aspx; and “Rolls-Royce and Microsoft Collaborate to Create New Digital Capabilities,” Microsoft, April 20, 2016, https://customers.microsoft.com/en-US/story/rollsroycestory.
Chapter 2
For the size of the US grocery industry, see “Supermarket Facts,” FMI, accessed June 17, 2018, https://www.fmi.org/our-research/supermarket-facts.
For the size of the Indian grocery market and information on BigBasket, see “Why India’s Online Grocery Battle Is Heating Up,” Knowledge@Wharton, April 26, 2018, http://knowledge.wharton.upenn.edu/article/indias-online-grocery-battle-heating/?utm_source=kw_newsletter&utm_medium=email&utm_campaign=2018-05-01.
Gerard Cachon and Christian Terwiesch discuss the classification of willingness-to-pay drivers in further detail in Operations Management (New York: McGraw-Hill Education, 2016).
For more on the concept of the “efficiency frontier,” see Michael E. Porter, “What Is Strategy?,” Harvard Business Review, November–December 1996, 61–78.
For more information on Blue Apron, see Sarah Halzack, “Why This Start-up Wants to Put Vegetables You’ve Never Heard of on Your Dinner Table,” Washington Post, June 15, 2016, https://www.washingtonpost.com/news/wonk/wp/2016/06/15/why-this-start-up-wants-to-put-vegetables-youve-never-heard-of-on-your-dinner-table/.
The efficiency frontier can be shifted by better matching supply with demand. This is also the title of the book written by Cachon and Terwiesch: Gerard Cachon and Christian Terwiesch, Matching Supply with Demand: An Introduction to Operations Management (New York: McGraw Hill Education, 2012).
An interview with an Instacart executive can be found on our book website, connected-strategy.com.
For more information on Alibaba’s Hema stores, see Christine Chou, “Alibaba to Open 3 Hema Stores in Xian in 2018,” Alizila, January 18, 2018, http://www.alizila.com/alibaba-open-3-hema-stores-xian-2018/.
Pareto dominance also plays an important role in the notion of an efficient frontier in finance. When making financial investments and allocating assets to investment portfolios, investors typically face a risk-reward trade-off. Investments that have high expected returns, such as investments in venture capital or private equity, typically also come with more risk (technically speaking, the standard deviation of the returns is larger). According to Nobel laureate Harry Markowitz, the efficient frontier is characterized by those investment portfolios for which no other portfolios exists that achieves a higher expected return for the same standard deviation of return (risk). Investors care about both characteristics of their portfolio, expected returns (that they would like to be high) and risk (that they would prefer to be low). Some investors might prefer an expected return of 10% and a standard deviation of returns of 4% over one with an expected return of 6% and a standard deviation of 2%. Some more risk-averse investors might prefer it the other way around. However, no rational investor would prefer an expected return of 6% and a standard deviation of 4% over one with 10% expected return and a standard deviation of 2%. It is said that the former is Pareto dominated by the latter. Thus, the efficient frontier is the set of investments that are not Pareto dominated. For the foundational treatise, see H. M. Markowitz, “Portfolio Selection,” Journal of Finance 7, no. 1 (1952): 77–91.
For times at which surge pricing happens for Uber, see Peter Cohen, Robert Hahn, Jonathan Hall, Steven Levitt, and Robert Metcalfe, “Using Big Data to Estimate Consumer Surplus: The Case of Uber” (NBER Working Paper No. 22627, National Bureau of Economic Research, Cambridge, MA, September 2016), https://doi.org/10.3386/w22627.
The details of efficiency and its relationship to capacity utilization are discussed as part of a lean operations framework in the book written by Cachon and Terwiesch: Gerard Cachon and Christian Terwiesch, Operations Management (New York: McGraw-Hill Education, 2016).
All data on the New York City cab operations is taken from the reports issued by the New York Taxi and Limousine Commission, accessed June 18, 2018, http://www.nyc.gov/html/tlc/html/technology/industry_reports.shtml.
All Uber data is taken from a case study written by our colleague Gerard Cachon, “Uber: Charging Up and Down,” The Wharton School, 2018, as well as from Jonathan V. Hall and Alan B. Kruger, “An Analysis for the Labor Market for Uber’s Driver-Partners in the United States” (working paper, January 201
5), http://arks.princeton.edu/ark:/88435/dsp010z708z67d, and Judd Cramer and Alan B. Kruger, “Disruptive Change in the Taxi Business: The Case of Uber” (NBER working paper No. 22083, National Bureau of Economic Research, Cambridge, MA, March 2016), https://www.nber.org/papers/w22083.
An interview with a HomeAway executive can be found on our book website, connected-strategy.com.
For more information on Goodr, featured in the sidebar, see Ben Paynter, “This App Delivers Leftover Food to the Hungry, Instead of to the Trash,” Fast Company, May 3, 2018, https://www.fastcompany.com/40562448/this-app-delivers-leftover-food-to-the-hungry-instead-of-the-trash.
For average vehicle occupancy, see the National Household Travel Survey by the Federal Highway Administration: “National Household Travel Survey,” US Department of Transportation Federal Highway Administration, accessed June 18, 2018, https://nhts.ornl.gov/.
For data on Match.com, see “Match.com Information, Statistics, Facts and History,” Dating Sites Reviews, last modified May 28, 2018, https://www.datingsitesreviews.com/staticpages/index.php?page=Match-com-Statistics-Facts-History.
The elements of willingness-to-pay have also been discussed by Cachon and Terwiesch in Operations Management.
For the Target story, see Charles Duhigg, “How Companies Learn Your Secrets,” New York Times Magazine, February 16, 2012, https://www.nytimes.com/2012/02/19/magazine/shopping-habits.html.
For more information on Cambridge Analytica’s use of Facebook data, see Matthew Rosenberg, Nicholas Confessore, and Carole Cadwalladr, “How Trump Consultants Exploited the Facebook Data of Millions,” New York Times, March 17, 2018, https://www.nytimes.com/2018/03/17/us/politics/cambridge-analytica-trump-campaign.html.
For information on Google apps using location data, see Ryan Nakashima, “Google Tracks Your Movements, Like It or Not,” AP News, August 13, 2018, https://apnews.com/828aefab64d4411bac257a07c1af0ecb.
For more on the topic of whether Uber drivers should be considered employees, see Daniel Wiessner, “US Judge Says Uber Drivers Are Not Company’s Employees,” Reuters Business News, April 12, 2018, https://www.reuters.com/article/us-uber-lawsuit/u-s-judge-says-uber-drivers-are-not-companys-employees-idUSKBN1HJ31I.
For the clash between Airbnb and local cities concerning regulation, see Scott Zamost, Hannah Kliot, Morgan Brennan, Samantha Kummerer, and Lora Kolodny, “Unwelcome Guests: Airbnb, Cities Battle over Illegal Short-Term Rentals,” CNBC News, May 24, 2018, https://www.cnbc.com/2018/05/23/unwelcome-guests-airbnb-cities-battle-over-illegal-short-term-rentals.html.
For the use of Amazon Echo recordings in a murder case, see Eliott C. McLaughlin, “Suspect OKs Amazon to Hand Over Echo Recordings in Murder Case,” CNN, April 26, 2017, https://www.cnn.com/2017/03/07/tech/amazon-echo-alexa-bentonville-arkansas-murder-case/index.html.
Chapter 3
For the argument that power tools compete with neckties, see Michael E. Porter, “The Five Competitive Forces That Shape Strategy,” Harvard Business Review, January 2008, 79–93.
Chapter 4
For more on the expanded role of “search”—e.g., in creating curated offering—see Stefan Weitz, Search (Brookline, MA: Bibliomotion, 2014).
For more details on the examples in the sidebar on true personalization, see “Cosmetics Industry in the U.S.—Statistics & Facts,” Statista, accessed June 18, 2018, https://www.statista.com/topics/1008/cosmetics-industry/. Also see “Shiseido Americas Announces bareMinerals® First Brand to Launch Customized by MATCHCo Technology with the Introduction of the MADE-2-FIT App for iPhone®,” Cision PR Newswire, June 20, 2017, https://www.prnewswire.com/news-releases/shiseido-americas-announces-bareminerals-first-brand-to-launch-customized-by-matchco-technology-with-the-introduction-of-the-made-2-fit-app-for-iphone-300476833.html. For more information, see Rina Raphael, “Is Customization the Future of the Beauty Industry?,” Fast Company, October 14, 2016, https://www.fastcompany.com/3064239/is-customization-the-future-of-the-beauty-industry. For information on 3-D printing of drugs, see Benedict, “$5K Vitae Industries AutoCompounder Can 3D Print Personalized Drugs in 10 Minutes,” 3ders.org, December 15, 2017, https://www.3ders.org/articles/20171215-vitae-industries-autocompounder-can-3d-print-personalized-drugs-in-10-minutes.html. See also “The Future of 3D Printing Drugs in Pharmacies Is Closer Than You Think,” Medical Futurist, May 4, 2017, http://medicalfuturist.com/future-3d-printing-drugs-pharmacies-closer-think/.
For more detail on the examples in the sidebar on coach behavior wearable sensors, see “Discover Two New Wearable Technologies,” La Roche-Posay, accessed June 18, 2018, https://www.laroche-posay.us/wearable-tech.html; and Michael Sawh, “The Best Smart Clothing: From Biometric Shirts to Contactless Payment Jackets,” Wareable, April 16, 2018, https://www.wareable.com/smart-clothing/best-smart-clothing.
For more details on the examples in the sidebar on automated execution with video games, see Dylan Matthews, “Humans Have Spent More Time Watching Gangnam Style Than Writing All of Wikipedia,” Vox, June 7, 2014, https://www.vox.com/2014/6/7/5786480/humans-have-spent-more-time-watching-gangnam-style-than-writing-all. For information on how long individual players spend playing World of Warcraft, see Pin-Yun Tarng, Kuan-Ta Chen, and Polly Huang, “An Analysis of WoW Players’ Game Hours,” NetGames 2008: Proceedings of the 7th ACM SIGCOMM Workshop on Network and System Support for Games (2008): 47–52, http://www.iis.sinica.edu.tw/~swc/pub/wow_player_game_hours.html. For more information on the gaming industry, see Robert Lee Hotz, “When Gaming Is Good for You,” Wall Street Journal, March 13, 2012. For a classification of player types, see Richard Bartle, “Hearts, Clubs, Diamonds, Spades: Players Who Suit MUDs,” Mud.co.uk, August 28, 1996, http://mud.co.uk/richard/hcds.htm. For the concept of “flow,” see Mihaly Csikszentmihalyi, Flow: The Psychology of Optimal Experience (New York: HarperCollins, 1991).
In medicine, the term automatic hovering was introduced in a New England Journal of Medicine article by David A. Asch, Ralph W. Muller, and Kevin G. Volpp. See David A. Asch, Ralph W. Muller, and Kevin G. Volpp, “Automated Hovering in Health Care—Watching Over the 5000 Hours,” New England Journal of Medicine 367 (2012): 1–3.
Chapter 5
For the number of teachers in the United States, see “Fast Facts,” National Center for Education Statistics, accessed June 18, 2018, https://nces.ed.gov/fastfacts/display.asp?id=372.
For more on the Khan Academy, see “About,” Khan Academy, accessed June 18, 2018, https://www.khanacademy.org/about.
An interview with a Lynda.com executive can be found on our book website, connected-strategy.com.
The Mack Institute report by Christian Terwiesch and Karl T. Ulrich discusses the disruptive potential of online teaching. See Christian Terwiesch and Karl T. Ulrich, “Will Video Kill the Classroom Star? The Threat and Opportunity of Massively Open Online Courses for Full-Time MBA Programs,” Mack Institute for Innovation Management, July 16, 2014, http://www.ktulrich.com/uploads/6/1/7/1/6171812/terwiesch-ulrich-mooc-16jul2014.pdf.
An interview with a Rosetta Stone executive can be found on our book website.
For more information on artificial intelligence and deep learning, see Robert D. Hof, “Deep Learning: Artificial Intelligence Is Finally Getting Smart,” MIT Technology Review, 2013, https://www.technologyreview.com/s/513696/deep-learning/.
For an insightful discussion of how increased connectivity among products and services requires changes within organizations, see Michael E. Porter and James E. Heppelman, “How Smart, Connected Products Are Transforming Companies,” Harvard Business Review, October 2015, 97–114.
For the market share of Amazon, at least when we were writing this book, see Rani Molla, “Amazon Could Be Responsible for Nearly Half of U.S. E-commerce Sales in 2017,” Recode, October 24, 2017, https://www.recode.net/2017/10/24/16534100/amazon-market-share-ebay-walmart-apple-ecommerce-sales-2017.
For more information on the costs of nonadherence for asthma medication, mentioned in the sidebar, see Aurel O. Iuga and Maura J. McGuire
, “Adherence and Health Care Costs,” Risk Management and Healthcare Policy 7 (2014): 35–44; and Adherence to Long-Term Therapies: Evidence for Action (Geneva: World Health Organization, 2013), http://www.who.int/chp/knowledge/publications/adherence_full_report.pdf.
We found the material from the Stanford d.School very helpful in articulating the framework of the how-why ladder. See “Welcome,” Stanford d.School, accessed June 18, 2018, https://dschool.stanford.edu/.
For the study concerning adherence to medication after cardiac treatment, see Kevin G. Volpp et al., “Effect of Electronic Reminders, Financial Incentives, and Social Support on Outcomes after Myocardial Infarction,” JAMA Internal Medicine 177, no. 8 (June 2017): 1093–1101.
For more information on Netflix and a list of Netflix genres, see Rani Molla, “Netflix Now Has Nearly 118 Million Streaming Subscribers Globally,” Recode, January 22, 2018, https://www.recode.net/2018/1/22/16920150/netflix-q4-2017-earnings-subscribers; and “Complete Searchable List of Netflix Genres with Links,” Finder, last modified June 6, 2018, https://www.finder.com/netflix/genre-list.
For the Organisation for Economic Co-operation and Development guidelines, see The OECD Privacy Framework (OECD, 2013), http://www.oecd.org/sti/ieconomy/oecd_privacy_framework.pdf. Also see Anna E. Shimanek, “Do You Want Milk with Those Cookies? Complying with Safe Harbor Privacy Principles,” Journal of Corporation Law 26, no. 2 (2001): 455, 462–463.
For the EU guidelines, see “GDPR Key Changes,” EUGDPR, accessed November 24, 2018, https://eugdpr.org/the-regulation/.
Chapter 7
For data on car2go, see “Get In and Drive Off: Free-Floating Carsharing with car2go,” Daimler, accessed June 18, 2018, https://www.daimler.com/products/services/mobility-services/car2go/. For information on the merger with BMW’s ReachNow, see Nat Levy, “Car2go and ReachNow Car-Sharing Services to Merge in Deal between Auto Giants Daimler, BMW,” Geekwire, March 28, 2018, https://www.geekwire.com/2018/car2go-reachnow-car-sharing-services-merge-deal-auto-giants-daimler-bmw/.
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