BMGT 301 Chapter Notes - Chapter 1: Digital Goods, Microelectromechanical Systems, Transaction Cost

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 301
• Professor: Wei Chen

Document Summary

Digital goods: can be delivered over a digital network (intangible) Cost of producing first unit is basically the entire cost of the product, so the marginal cost of each additional unit is basically zero. Cost of delivery over internet is very low. Marketing costs stay the same, and price can vary a lot. Digital = anything that can be expressed as 1s and 0s (bits) Information goods = anything that can be digitized into streams of bits. With time, new products have fewer atoms and more bits (going from physical to digital) ex: physical newspaper --> news from websites and online journals, physical. Several traditional products are available in digital formats. Explosion of firms focusing on information as their primary business-- creating, gathering, synthesizing, distributing information. Firms have detailed granular information on consumers and use this information to create their strategies and compete.