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Macomber, John, 1.464 E-Commerce and the Internet in Real Estate and Construction, Spring 2004. (Massachusetts Institute of Technology: MIT OpenCourseWare), (Accessed 08 Jul, 2010). License: Creative Commons BY-NC-SA

E-Commerce and the Internet in Real Estate and Construction

Spring 2004

Five dollar bill on a computer keyboard.
A five dollar bill on a computer keyboard. (Image courtesy of Daniel Bersak.)

Course Highlights

This course site features reading assignments.

Course Description

1.464 examines the long term effects of information technology on business strategy in the real estate and construction industry. Considerations include: supply chain, allocation of risk, impact on contract obligations and security, trends toward consolidation, and the convergence of information transparency and personal effectiveness. Resources are drawn from the world of entrepreneurship and "old economy" responses.



E-Business Strategies explores the practical use of e-business concepts in support of strategy. Building on the analytical foundations of Strategic Management (1.46), students explore the ways in which information technology and its e-commerce and Internet components help to provide competitive advantage for companies.

Technologies and related business models include supply chain optimization, 3D solid modeling tied to databases, knowledge management, auctions and procurement, information intermediaries, and multi-party contractual agreements. These will be analyzed through the lens of strategic and financial business planning.

Particular emphasis will be given to examples in construction, real estate, and architecture, which together make up the largest industry in the world and are the domain expertise of the instructor. However, this course is not limited to students in those fields.

Teaching Methodology

The class will use several learning models. The case method will be used to introduce key technologies, the business models that support them, and the underlying contract issues to be addressed. Lectures, student research, analysis, and presentations will also be used. Articles, readings, and on-line content will supplement the materials. The teaching methodology relies more on student research and presentations of original work, than on the analysis of existing case studies. Case studies are still used to illustrate real world applications of the concepts; but they are not used to test learning.

Teaching Intent

This course is intended to cover several key technologies and business models available in e-business strategies for organizations. The materials are generally based on the real estate, design, and construction industry, and on the technologies that have the most potential to change that industry. However, not all the cases are drawn from those fields, and students with other interests will benefit from the course. Strategic Management (1.46) concentrated on the basic strategy tools useful in practice management and career planning for the vast majority of firms for whom strategy is a means to improve how they compete, but who are not seeking to restructure or transform an industry. In this class, we continue these studies with particular emphasis on technologies and models that have transformed other industries, and that might transform real estate, construction, and design. Similarly, most of Strategic Management (1.46) assumes that strategy discussions occur in the context of an ongoing business. This course gives substantially more weight to issues in entrepreneurship and in starting a new business or in commercializing a new technology or business model.


Two problem sets.

One final paper on a project of students' choosing, 10-20 pages.

Students will prepare a final project of 10-20 pages relying on original thinking or research. For example, final projects could include: writing a new case study to help illuminate cutting edge practice; writing a paper for publication assessing how a technology from one industry might be applied to another industry; or drafting a summary business plan for the implementation of a concept. Topics can be of the students' own choosing, or can be suggested by the instructor. It is expected that the group's final work product will be a useful summary of leading edge thinking with respect to E-Business Strategies, particularly in real estate, construction, and design.




Grading will be based on four criteria.

Project - 50%. The most important is the project (see assignments) which will count for 50% of the grade. The projects will be assessed primarily on quality of analysis, and secondarily on originality of topic, presentation of materials, and extent to which the work can stand alone to help future students. The projects can be studies that complement masters thesis work, although the work must be relevant to demonstrating learning from this class.

Class participation will count for 30% of the grade. This means, speaking up in class and doing so in a way that shows thoughtfulness and contributes to the discussion and to the learning of other students. Note that good class participation need not agree with the flow of the conversation and also may freely challenge premises put forth by the instructor.

Problem Sets - two for 10% each. There will be two brief problem sets, each of which will count for 10% of the grade.

Guidelines for Papers

  1. Papers are due at the beginning of class on the days indicated in the course outline.
  2. Papers may not exceed the indicated length including text and exhibits. Typed, double spaced.
  3. Charts and exhibits using the models are strongly encouraged.
  4. Charts can be drawn by hand.
  5. Papers will be graded on the quality of your analysis of the case situation.

Guidelines for Class Participation

  1. Prepare the material and come to class ready to talk about the strategic issues which you see.
  2. Consider the discussion questions which are provided in the text or in advance.
  3. We learn from each other; active participation is encouraged.
  4. Any question or comment is acceptable in this low-risk learning environment.
  5. Comments which advance the discussion or provide new insights are encouraged.
  6. You may challenge the instructor all you want, with no penalty.

Target Audience

This course is intended for students who are interested in further study in strategy, students who want to investigate sources of structural change in real estate and construction, or students interested in any aspects of implementing an e-business idea. The course is open to students who are interested in any vertical market (construction or otherwise).


Strategic Management in the Design and Construction Value System (1.46), or permission of the instructor.


John D. Macomber is CEO of BuildingVision, Inc., a consulting and investing firm focusing on the future of the construction industry. He was founder and CEO of Collaborative Structures, Inc. a venture capital funded pioneer in assisting collaboration in the Real Estate industry. He is a nationally recognized thought leader on information technology and industry change in construction. The current Chairman and former CEO of the George B. H. Macomber Company, a large regional general contractor, Mr. Macomber has also led organizations in information services, equipment rental, and real estate. He has been teaching this course and its predecessors at MIT since 1988.


1 Course Overview: E-Business Strategies

Issues in Real Estate, Design, Construction
2 Industry Value System; Strategy Review

How Information Gives You Competitive Advantage
    Project description due (5% complete)
3 3D Modeling; Scaling Up a CAD Solution  
4 Supply Chain Management and Optimization

Industry Transformation

Disruptive Technologies

Disruptive Business Models
Problem set #1 due
    Project abstract due (20% complete)
5 Knowing a Winning Business Idea When You See One

Writing a Business Plan
6 Aligning Incentives - Part One

Aligning Incentives for Supply Chain Efficiency
7 Aligning Incentives - Part Two

Using Game Theory to Shape Strategy
Problem set #2 due
    Project drafts due (60% complete)
8 Alliances and Franchising Knowledge Management  
9 Procurement and Exchanges

Emerging E-Business Models

Exploiting the Virtual Value Chain

Consideration for Companies and Careers
Final projects due (100% complete)   Tell A Friend