Increasing Returns and the New World of Business
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Increasing Returns and the New World of Business Presented by: Alexandra Mezhenina Vladimir Fedotov Yaroslav Pavlov By W. Brain Arthur
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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 Presentation
Transcript of Increasing Returns and the New World of Business
Increasing Returns and the New World of Business
Presented by: Alexandra Mezhenina
Vladimir FedotovYaroslav Pavlov
By W. Brain Arthur
New reality of economy
Transformation from application of raw energy to application of ideas, from resources to information
Two economical worlds
World of diminishing returns
World of increasing returns
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
Increasing-returns world
New rules of the game
Market became unstable, unpredictable…
The reasons of this phenomena
Up-front cost
Network effects
Customer groove-in
Factors of new system
Flat hierarchy, mission orientation, flexibility in strategy…
Because: adaptation never stopsevery participant of the process becomes
very important
Playing the high-tech casino
Discount strategy
Psychological positioning
Cross-company mutual feedback
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
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?
Thank you! Comments
Questions
[email protected] - Yaroslav Pavlov [email protected] - Alexandra [email protected] - Vladimir Fedotov
