Network Strategies for the New Economy

European Business Journal, Vol. 14, pp. 174 - 185, 2002

18 Pages Posted: 13 May 2005

See all articles by Tanya Sammut-Bonnici

Tanya Sammut-Bonnici

University of Warwick - Warwick Business School; University of Malta

John McGee

University of Warwick

Abstract

In this paper we argue that the pace and scale of development in the information and communication technology industries (ICT) has had and continues to have major effects on the industry economics and competitive dynamics generally. We maintain that the size of changes in demand and supply conditions is forcing companies to make significant changes in the way they conceive and implement their strategies. We decompose the ICT industries into four levels, technology standards, supply chains, physical platforms, and consumer networks. The nature of these technologies and their cost characteristics coupled with higher degrees of knowledge specialisation is impelling companies to radical revisions of their attitudes towards cooperation and co-evolution with suppliers and customers. Where interdependencies between customers are particularly strong, we anticipate the possibility of winner-takes-all strategies. In these circumstances industry risks become very high and there will be significant consequences for competitive markets.

Keywords: network externalities, information economy, critical mass, winner-takes-all, competition

Suggested Citation

Sammut-Bonnici, Tanya and McGee, John, Network Strategies for the New Economy. European Business Journal, Vol. 14, pp. 174 - 185, 2002, Available at SSRN: https://ssrn.com/abstract=720205

Tanya Sammut-Bonnici (Contact Author)

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

University of Malta ( email )

Malta

HOME PAGE: http://staff.um.edu.mt/tsam1/

John McGee

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

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