End Of Competition, The: The Impact Of The Network Economy. C N A Molenaar

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СКАЧАТЬ of not being able to see and touch the product and having to wait for delivery are accepted because of the many advantages, such as access to all the desired information, a wide choice on the Internet, price transparency, the right to return items and home delivery. Target groups, a distinctive feature since the 1960s (the Third Industrial Revolution), are rapidly disappearing due to individualisation. A consequence of this is the demand-driven approach aimed at the individual buyer, which contributes to the individual buying behaviour.

      Social economic changes

      And finally, there are also socio-economic aspects to this change, which contribute to the rapid growth of the network economy: increased prosperity, the large rise in single-parent families and singles and the choices made by young people (millennials) that are increasingly based on wellbeing rather than on prosperity. This individual behaviour is determined by the individual wishes and circumstances. Furthermore, this new generation has grown up in prosperity, with technology and has very good communication skills. The focus on oneself rather than on a group has also contributed to this.

      Adjusting to international developments

      For many years, governments have sought to remove trade restrictions. Bilateral and multilateral trade agreements, close collaborations between countries (such as within the European Union, and the European Union with other countries), have led to an increase in global trade and prosperity. The first step, removing barriers, had been taken, but within the old structures (product-based). The second step, as a result of the changing competitive position in the markets, quickly followed. Companies had to meet international norms and international competition conditions. This meant that companies started to strive for both quality improvements and efficiency.

      By responding to these changes and applying new possibilities, opportunities for new business models arose. New communities have been created (such as social networks) where like-minded people can find one another. But this has also led to frictions in companies, which suddenly have to become part of a network, which causes major changes to competitive relationships. This requires changes to a company’s business model, to the organisation and to the company’s focus. Organisations are no longer those independent entities working in a stable and predictable market. The market has become difficult to predict and the changes require constant monitoring and adaptation. Dynamism and speed of change are essential in order to be able to compete in the network economy. This requires not only flexibility from an organisation but also the appropriate expertise and skills.

      Building Blocks for the Future

      • Traditional structures restrict the application of new possibilities.

      • New applications of technology not only lead to collaboration within a network but also create different competitive relationships.

      • Organisations as independent entities have to join a partnership within a network.

      • In addition to the technological changes, it is the acceptance of users, customers and companies that form the basis for disruption.

      • The playing field is no longer limited to a traditional target group or protected market. Competition is now global. Purchases are demanddriven. The demand economy is replacing the supply model.

      • Competition takes place on the basis of algorithms that often lack transparency.

      The traditional platform development is disrupting traditional competitive relationships in a number of ways as follows:

      • It reduces barriers to access.

      • Everyone can start a new platform. Alternatively, a company can become a member of a platform.

      • There is a change in the logic of value creation and value determination.

      • The platforms provide a new series of economic relationships, which are dependent upon the Internet (networks). This leads to an ecosystem that is the basis of value creation. The ecosystem determines the conditions users need to meet in order to participate.

      • Value is determined by a variety of mechanisms, each of which has different implications for the distribution of profits. Platforms transform the work and the relationships or create new categories of work and relationships.

      • It regulates the relationships and provides arbitration in the event of disputes.

      • This means that the platform can be used for arbitration without breaking the law.

      • Small group of businesses and investors work for the platform; it is they who take the risk. They earn very well from this and, if the business is successful, will profit from the value that is activated on the (stock) market.

      • Then there are also (small) companies that deliver goods for the platform. They are in fact mini-operators or consignees. Most of these will not be successful or profitable, though some will be very successful.

      • There will be a number of employment relationships that involve long hours at the office and benefits such as healthcare, but most such relationships will be defined anew, resulting in the creation of jobs with very flexible hours but fewer of the traditional benefits. In the food delivery sector, there will be a large increase in the demand for food deliverers, boys and girls, to deliver these meals. In addition, possibly even a greater demand for cooks to prepare these meals. The deliverers are usually able to choose their own hours, and therefore work very flexible hours, but are hired mainly as freelancers and so do not enjoy many of the traditional employment conditions. We see this not only within food delivery companies but also clearly within transport companies (Uber) and parcel delivery services (post.nl).

      • Repositioning of power in the economic system will happen.

      • The manager or owner of a platform varies per platform. The differences are important as the distribution of the benefits varies per owner of the platform. Platforms such as Foodora and Deliveroo are a third party, but there are also restaurants that have started their own platforms for delivering meals. In such cases where a third party owns a platform, the restaurant benefits from more business. If the restaurant has its own platform, then the restaurant enjoys more commercial benefits as well as the advantage of customers loyal to the platform (Zysman and Kenney, 2016).

      Bibliography

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      Zysman, J. and Kenney, M. (2016). The Next Phase in the Digital Revolution Platforms, Abundant Computing, Growth and Employment, 17 October 2016.

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