review of book by gary fields
DESCRIPTION
Territories of Profit: Communications , Capitalist Development and the Innovative Enterprises of GF Swift and Dell ComputerTRANSCRIPT
Territories of Profit: Communications , Capitalist
Development and the Innovative Enterprises of GF Swift and Dell
Computer
- Gary Fields
The Railroad and Telegraph as Commerce System and Market Space
• Communications and Commerce
• Infrastructure Interconnection
– Connecting the Atlantic and Pacific Coasts with wire in 1861 and rails in 1869.
– Single transport and communication medium.
– Twins of the 19th century commerce
• Markets before railroad and telegraph
• Rail and telegraph based trade
– Completion of Galena and Chicago Union Railroad
– East-West Railroad lines
• Advantages
– Speed
– Reliability
The Railroad and Telegraph as Commerce System and Market Space• Increase in livestock shipping.
• Institutionalization of Interregional trade.
– Standards and Futures
• Urban impacts
– Increase in urban population
– Emergence of cities as manufacturing enters.
– Mass Markets and manufacturing
• Govt. Policies
– Single National market
The Business Enterprise of G.F.Swift & Company
• Organization of Swift– Dispersed Branch distribution houses– Pull system– Vertically integrated, Large scale Enterprise– Territorial Spread and localized concentration
• Early Meatpacking– Perishable Nature of Meat– Lack of refrigeration facilities– Long distance transport of cattle
• The Stockyards• Cattle commission houses
The Business Organization of G.F.Swift & Company
• Pooling arrangements between live-stock carrying railroads.– Inedible portion of the animal was also charged.
• Integrated production and distribution strategy.• Refrigeration, transportation, communication and
organization• Improvised refrigerated rail car• Consignment arrangements with the local butchers
The Business Organization of G.F.Swift & Company
• Butcher Aristocracy– Butcher workman Industrial laborer
• Increase in no. of wage earners from 8000 to 70000 from 1870 to 1900.
• By 1903, swift became the largest meat packing firm in the world.• Dressed beef trust• Investments by firms in the cattle stockyards.• Direct system of operations
– Relied on orders from retail butchers– High volume throughput– Customization– Balancing supply and demand – using telegraph
• Vertically Integrated Organization• Ancillary operations– Swift refrigerator transportation company– Ice manufacturing and distribution– Swift fertilizer works
Internet as commerce system and Market Space
• Revolution in communication as a platform fro reorganizing competitive activity.
• Commercialization of Internet– Invention of core infrastructure technology– Transformation into system for delivering profit– Exploitation of the built system
• Infrastructure Users• Users as innovators• Internet commercialization
– Splitting ARPANET into 2 pieces– Local Area networks(LANs)– World Wide Web and Internet Browser
Internet as commerce system and Market Space
• Host Computers– 1984 – 1000+ 1986 – 313,000
• The Web, the Browser and Web Commerce• Web commerce
– “pulled” information channel– Goods Information , user buyer– Explosion of web portals, web hosting-services and search engines.
• Internet commerce and Govt. policy– Telecommunications Act of 1996
• Open competition for construction of internet infrastructure
– Framework for Global Electronic commerce• Predictable legal environment for Internet commerce
Internet as commerce system and Market Space
• Internet retail space– Amazon.com and Internet Market Space– Internet Efficiency and Internet Geography
• Interfirm sales
The Business Organization of Dell Computer
• “build-to-order”• Dell’s process relies on
– Absent intermediaries– Customization– Use of internet for procurement and assembly operations
• Dell accumulates profit as a logistics firm• Levels of inventory
– 1994 – 32 days of inventory– 2002 – 4 days of inventory
• Collaborative relationship – between Dell and its Network partners
The Business Organization of Dell Computer
• Open standards and modularity– Constant technological change, constant downward price pressure
• Indirect channel• Perishable quality of computers – price and time• Inventory problem• Genesis of DELL
– Custom Direct• The company did not stock the retailer and reseller
– Target – corporate customers– Problems with component inventory– Shift in sales mechanism
• Using indirect channels for sale – Value added resellers(VAR)
The Business Organization of Dell Computer
• Online selling– PCs configurable online– Reduction in transaction cost from $50 to $5 per order
• Internet-generated information and communication as substitute to inventory– Central to this was an ERP system by SAP
• i2 business organization– Business with “internet at its core”– All geographical regions use this web-based information system
• Burst Capacity• DSi2 – i2+Burst Capacity
– Global supply planning• Master Production Plan
– Demand fulfillment
The Business Organization of Dell Computer
• Virtually Integrated Firm– Systems Compatible with dell’s i2 system– Organization built on nonmarket foundations
• Geography and the Dell Organization– Centralized form of control– Spatial proximity between key nodes in Dell’s network– Influencing location of network partners
• Geography of Assembly– Locations – Penang(Malaysia), Xiamen (Taiwan), Austin & Nashville
(North America), Eldorado do Sul (Brazil), Limerick (Ireland)
• Geography of supply– East Asia, Mexico, United States
Structural Foundations for e-commerce Adoption : A
comparative organization of retail trade between Japan and
the United States
- Yuko Aoyama
Characteristics of Retail Trade
• The characteristics of trade are historically determined• Sell products available at brick-and-mortar store online – US• Selling products available online at brick and mortar stores –
Japan• Neighborhood stores – access points of e-commerce for
Japanese customers• In Tokyo there are 16 convenience stores/mi2.• Preexisting practices, cultural preferences and Institutional
environment - alter patterns of technology use in consumption.
• Convenience, familiarity and social habits• E-commerce technological requirements
– Computer literacy– PC ownership– Availability of credit cards
• Organizational characteristics of retail trade– Economic variables– Population growth and density
• 55% of food and beverage sales were in small stores in Japan
Evolution of Nonstore Retailing in USA and Japan
• USA :• Direct marketing for import goods
– Horticulture
• Mail order trade• Mass-market based approach to niche markets
– Avg. Household income > $75000 per annum– Well versed with the procedures of receiving refunds, returns and
exchanges.
NonStore trade in Japan
• Japan:• Introduced in 1875• They combined store-front sales with catalog businesses.• Problems faced
– Densely populated spatial structure– Mistrust of merchants– Undeveloped printing technologies and postal system– Limited market size for Japanese catalogs
• 1973 Large Scale Retail Law– For sustaining mom-and-pop stores
• Virtual stand still of Japanese economy and decline in consumer demand.
Convenience Stores in Japan
• Starting market from ground zero• Exchange of cash for goods• Seven eleven Japan• High energy cost – lack of refregiration• Advantages of Convenience store chains
– Assistance from the chain
• Innovation – Locational Strategy– Marketing Strategy– Adoption of IT
• Heavy investment in IT – better supply routes
Convenience Stores in Japan
• Second stage of Informatization
• Delivery of online based services• Alliances between convenience stores and e-commerce
vendors • Easy access and legitimacy to online retailers