Asymmetric information consequences by the Web’s tranparency
Information asymmetry is as an unequality in information, knowledge, expertise, network -etc-, which creates an imbalance where a company can make better decisions than another company.
Asymmetric information imbalances have always been competitive advantages -in any way expressed- for companies’ existences.
The Web’s transparency is changing this for good and worse.
The increasing tranparency of the Web certainly has challenges for companies to keep its advantages over others. Publicly available information which is accessible to anyone is the prime challenge.
The information widely available applicates to competitive intelligence, information on products and services, information on brands, information with regard to target groups, which all can be used to enhance -both- the internal and external processes of businesses.
Web 2.0 forces companies to be open, to be transparent towards the market and the players/customers. If this isn’t done, the consequences might be even worse, due to the co-involvement consumers demand in transactions.
Though, paradoxically, if processes are enhanced and adapted to the opportunities that Web 2.0 offers, bigger asymmetric information imbalance and competitive advantages can be created!
Think of all the information available on social networks, bookmarking sites, Wikipedia’s, blogs, microblogs which can be used to create or enhance business and further increase the asymmetry. Networks of people or companies always have existed which added value to the competitive advantage of business, but the easier access to all this information is being facilitated by the Web, forcing companies to extract intelligence from it easier, faster and with more accuracy.
Because information is out in the open, companies need to be able to learn and adapt faster than their competitors. This is the skill that can be mastered. Learning curves will follow each other quicker, advantages don’t remain as long anymore and information overload is all around us.
Overcome the challenges of the Web’s transparency but at the same way, alter the company to new levels with help of its transparency.
How do you think the Web can contribute to information asymmetry?
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This asymmetry to me seems more like a tear in the “business as usual”. It applies to both strategists and front line workers. After speaking with over 100 companies who did not see the need for blogs or social media, it seems like this technology wave is much bigger than the Internet/Web of 25 years ago. Now there are actual self made networks, this blog would not be on my radar screen unless I read the post description on Linked-IN. These not only change the way people consume information, it changes where they consume it and how they want to be informed. The next step is influence and I think social networks will eventually become marketing tools (not really review as ePinion). Anyway, interesting strategy story. If you want to read about the good and bad of blogging and social networking: http://businessbloggingideas.blogspot.com
@ Ami:
It sure does, but be it sucked in the daily challenges or neglecting this point of view, companies/people (both on strategic and front-line level) do forget what it value and importance it adds to the organization.
If you think this is hard, imagine what Mosses, King Jr. and Ghandi went through. Revolutions are not easy, but they can be exciting and even profitable. It’s the nature of mankind that someone will topple the old way of doing things. If you read any of these people, you will see that you can be calm and productive in the face of change. You can also be understanding in the face of people who don’t want to “com to the revolution” ~ I used this term in my last blog article because in the 1960s and 70s it seemed like a funny way to put things. It seems like it’s not that funny this time. By the way, lots of businesses closed and lost their way of doing things. Ask small town news publishers, lawyers and doctors. For over a century they were the most respected thing in town, now they suddenly became irrelevant (Time and Newsweek came by mail, so did Playboy.)
(Oh add Jeffereson and Washington and maybe even Lincoln to the mix… how about Gorbachev, what happened to him ? ? ? )