increasing returns and the new world of business
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Increasing Returns and the New World of Business. By W. Brain Arthur. Presented by: Alexandra Mezhenina Vladimir Fedotov Yaroslav Pavlov. New reality of economy. Transformation from application of raw energy to application of ideas, from resources to information. Two economical worlds. - PowerPoint PPT PresentationTRANSCRIPT
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Increasing Returns and the New World of Business
Presented by: Alexandra Mezhenina
Vladimir FedotovYaroslav Pavlov
By W. Brain Arthur
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New reality of economy
Transformation from application of raw energy to application of ideas, from resources to information
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Two economical worlds
World of diminishing returns
World of increasing returns
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Diminishing-returns world
Commodities production depends heavily on resources and lightly on know-how
Diminishing returns and nearly perfect competition
Still exists in modern economy in bulk processing
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Increasing-returns world
New rules of the game
Market became unstable, unpredictable…
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The reasons of this phenomena
Up-front cost
Network effects
Customer groove-in
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Factors of new system
Flat hierarchy, mission orientation, flexibility in strategy…
Because: adaptation never stopsevery participant of the process becomes
very important
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Playing the high-tech casino
Discount strategy
Psychological positioning
Cross-company mutual feedback
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Increasing returns in service-industriesServices can also be described in terms of this
phenomena
Two consequences:A lot of small companies concentrated on
one serviceWinner-take-most
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Managing two economical worlds
Do I understand the feedback in my market?
Which ecologies I am in?
Do I have resources to play?
What games are coming next?
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Thank you! Comments
Questions
[email protected] - Yaroslav Pavlov [email protected] - Alexandra [email protected] - Vladimir Fedotov