Competing With Social Networks

Course Number 1217

Associate Professor Mikolaj Jan Piskorski
Winter
20 sessions
Paper

Career Focus

Competing with Social Networks is a Strategy class targeted at students considering careers in high technology, entertainment, social media or consumer packaged goods. It will be useful for students considering consulting careers, careers inside companies as well as for students who are planning to start their own Web 2.0 companies. Frequent protagonist visits will help students establish relationships required to be effective in this space.

Educational Objectives

The course introduces the network failure framework to help companies that use social networks to build and sustain their competitive advantage. Such companies face two unique strategic problems. First, they compete against a very powerful substitute-real world social network-which potentially undermines their value proposition. The network failure framework addresses this problem by identifying where real-world social networks fail and how to step in to help people establish new relationships, or change their existing relationships. Second, introduction of commerce to social relationships often undermines the latter, implying that firms competing in social industries often run into monetization problems. The network failure framework identifies the kinds of monetization.

Course Content

The course is composed of three modules. The first module establishes the network failure framework using the example of on-line social networks and examining while some succeeded while others failed. Here we examine: LinkedIn, Friendster, Twitter and mixi. We then focus on successful on-line social networks and examine monetization challenges and opportunities by comparing MySpace and its music venture to Facebook Connect and Google's Friend Connect. The second module uses the network failure framework to establish conditions under which adding social networks helps or hinders competitive advantage of existing business models. Among others, we consider a matchmaking company, eHarmony, a peer-to-peer lending company, Zopa, an on-line reviews company, Yelp, and finally, Wikipedia Contributors. In the third module, we apply the network failure model to examine how social networks can be used to make organizations more effective. Here, among others, we examine the Presidential campaign of Barack Obama, Young Presidents' Organization and P&G.

Complements

"Competing with Social Networks" complements with "Managing Networked Businesses." Both courses tackle platform-based businesses offering products that become increasingly attractive as the number of people using them increases. However, the two courses are very distinct from each other. Competing with Social Networks helps you identify what those products should be and identify business models that leverage social networks to deliver substantial returns. Managing Networked Businesses then helps you grow those business and navigate strategic interactions with competing platforms.