This is an in-depth comprehensive summary of all the required readings (5 articles) for week 1 of the course digital business models in the bachelor of business administration from the University of Amsterdam. The five articles summarized are required materials which will be tested on the midterm e...
The social media landscape of ubiquitous connectivity, enabled through mobile devices, in turn, has not only enhanced access to
information but also allowed consumers to create content and amplify their voices
Power - asymmetric ability to control people or valued resources in online social relations.
➔ Asymmetric & online social relations refer to the relative degree of mutual dependences between parties.
➔ In online worlds, if no counterpart existed, power could not arise.
➔ A powerful entity requires a comparison with a powerless one to derive its position.
In social media environments, control over people relates to influence. Influence is a function of
• Reach - the degree of the person's embeddedness in the social network.
• Persuasiveness - linked to the relevance of the content the person creates online.
Control over valuable resources instead refers to the right to dispose of tangible or nontangible assets online (In virtual
communities, status constitutes a scarce resource)
Empowerment – dynamic process of gaining power through action by changing the status quo of current power balances.
The source of influence can be traced back to two types of infrastructure characteristics:
(1) Hard infrastructure characteristics -> determined through the developers' source code in terms of
a) openness of the infrastructure architecture -> the modularity, distributed access, and the value of the collective effort
created as individuals collaborate across online networks.
b) infrastructure interaction designs -> or the availability and restrictions on data types, amount, and directionality of
interactions
(2) Soft infrastructure characteristics -> reflect the social processes built into the platform (social processes that evolve bottom
-p in the form of communal norms or imposed top-down as regulatory mechanisms)
, Four distinct consumer power sources:
1. Demand-based power - resides in the aggregated impact of consumption and purchase behaviors arising out of the Internet
and social media technologies.
- Exerted through purchase or boycott.
- Internet removed geographical and time constraints, empowering consumers through an expanded assortment
(niche/long tail extended) -> more options + downward price pressures.
Individual-based power sources
2. Information-based power – compromised of two facets:
a) Content consumption -> the ease of access to product or service information, which reduces information asymmetry,
expedites market diffusion of information and shortens product lifecycles.
- Consumers can better match their preferences to products and reduce information asymmetry -> Easy access to
product reviews, comparative product specs, performance Data, prices
- leads to better-educated and sophisticated consumers => more demanding and difficult to influence
- shorter adoption cycles produce shorter product lifecycles, which increase pressure on marketers
b) Content production - the ability to produce user-generated content, empowerment by providing self-expression,
extending individual reach and increased potential for individual opinion to influence markets
- Consumers gained the ability to vocalize both praise and complaints through eWOM and explore facets of the self,
and advocate for brands and social causes
- Some barriers to content creation remain, limiting complex content production activities to actors with adequate
technological and financial resources.
- consumer empowerment is balanced by some level of disempowerment -> Firms have access to large amounts of
consumer-produced information
3. Network-based power - the metamorphosis of content through network actions designed to build a personal reputation and
influence markets through the distribution, remixing, and enhancement of digital content
- speaks to the actions by which others can add value, beyond that of the original content.
- content dissemination (e.g., sharing content) content completion (e.g., comments that contribute to previous
content), or content modifications (e.g., repurposing content, such as a meme)
- Openness of the infrastructure plays a big role in terms of determining the accessibility and redistribution of content
while Infrastructure interaction design determines formal constraints on freedom of expression
Network-based power sources
- Soft infrastructure characteristics designed to reward specific types of contributions may indirectly influence the nature
of content transformation and directly impact personal reputation
- Disempowerment -> creates social obligations in the context of virtual environments (addiction) and limits self-
expression (reduced to fragments of info, e.g. status updates)
4. Crowd-based power - resides in the ability to pool, mobilize, and structure resources in ways that benefit both the
individuals and the groups
- reflects a deliberate aggregation of all preceding power bases (demand-, information-, and network-based power) to
align power in the best interests of individuals and larger groups, e.g. virtual communities
- Amplifies demand-based power through communal buying or collective expression of needs.
- Amplifies information-based power through standardization, centralization and provision of easy access for content
consumption (hard infrastructure characteristics) and through the installation of reward- and acknowledgement
systems for content production (soft infrastructure characteristics).
- employs and amplifies network-based power by bolstering individual connections in networks to increase reach and
pool resources across groups
- examples: crowed-creation -> Wikipedia or Sound: Cloud; crowd-funding -> Kickstarter; crowd-sourcing as is used in
Amazon Mechanical Turk; crowd-selling as can be seen with Etsy; or crowd-support in peer-to-peer problem solving
communities
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