Information technology revolution represented by internet

The information technology revolution represented by the Internet, it not only promoted the upgrading of traditional industries, but also penetrated into various industries and social, economic and life corners, not only changed the way of information transmission, exchange and storage, but also changed the way of communication, information acquisition and utilization, and changed the way of social resource allocation, It has also promoted the transformation of human economic and social organization mode.

Network economy is a new economic form under the background of this technological revolution. The network economy, based on interconnection and cooperation, advocates openness, sharing, mutual benefit, reciprocity and cooperation, and changes the way of resource allocation, production organization and value creation of industrial economy in the past. Over the past more than 20 years, the essence and intension of the network economy has been clear and rich in the business practice, and the network economic theory has become the cornerstone of the restructuring of business rules, the mode of business operation and the change of organization.

1, the industry boundary increasingly blurred

The integration of information technology, Internet and traditional industries makes the original industrial boundary become blurred. In a sense, all industries are information industries. Wal-Mart calls itself an information enterprise and is a marketing enterprise that uses information technology for management. Andy Gloff, a former Intel company president, once said that there would be no internet companies, because every business would be an internet company.

Industrial integration, making cross-border, deviant into the most promising and vitality. Cross-border and deviant, often "unprofessional" "outsiders", they use "disruptive innovation" play, the destruction of the original rules of the game, so that the traditional competitors proud of the advantages of the disappeared. The story of "creative destruction" described by Joseph Schumpeter is constantly being staged, publishing, music, film, television, advertising, retailing, wholesale, finance ...

2. The rise of buyer's power

Since the onset of the 2008 financial crisis, the world is experiencing structural rather than cyclical overcapacity. Huge, liquid capital and credit inflation have led to overinvestment worldwide and overcapacity in many industries. In this age of product abundance, the buyer's market is almost dominant in all industries. In the past, buy never sold the essence, information asymmetry initiative in the enterprise. The internet has given the user the initiative of asymmetric information, and the pricing power has been transferred from seller's market to buyer's.

Consumer sovereignty era, consumers increasingly from the focus on product function to pay attention to emotion, culture, fashion, trends, to pay attention to product experience, value, from popular goods to the pursuit of diversification, customization, personalization. As the book of needs puts it, real customer demand lurks in the interconnectedness of human nature and a range of other factors.

3. Global acceleration of resource allocation

The popularization of the Internet has accelerated the economic globalization. Economic globalization is one of the important characteristics of the contemporary world economy and has become the fact of world economic development. Economic globalization makes the world economy increasingly become a whole, through foreign trade, capital flow, technology transfer, providing services to form a global scope of interdependence, mutual relations, mainly manifested in trade liberalization, production internationalization, financial globalization, science and technology globalization.

Friedman has a famous saying "the World is flat." "Especially since the 1990s, with the promotion of Internet popularization and the development of social productivity to a higher level, the movement of economic activities (production, distribution, exchange, consumption) and various capital forms (capital money, productive capital, commodity capitals) exceed the national boundaries and make resource allocation and flow around the world. Despite the existence of various trade and non-trade barriers, the path of globalisation will continue to stretch.

4. The third hand--the formation of the value network mechanism

Adam Smith in the Wealth of Nations, 1776, said that individuals and organizations in economic life only consider their own interests, by the "invisible hand" driven by the role of division of labor and the market can achieve the purpose of national prosperity. Later, the invisible hand became synonymous with free competition and market mechanisms. The market is like an "invisible hand", under the interaction of price mechanism, supply and demand mechanism and competition mechanism, directing resources to the most efficient aspects of allocation, distribution of goods and services, but also guide the enterprise decision-making.

200 years later, in 1977 Alfred Chandler put forward the argument that the "visible hand" is diametrically opposed to "invisible hand". As the scale of economic activity expands, enterprises in the management of coordination than market coordination to bring greater productivity, lower costs and higher profits, that is, more efficient and more profitable, the enterprise mechanism took over the market mechanism to assume the production and distribution, the allocation of funds and personnel functions. The enterprise and the market are two kinds of different but can replace each other system, the existence of the enterprise will be many originally belong to the market of the transaction internalization. Enterprise mechanism This only "visible hand", it is through the internal integration operation mechanism to reduce transaction costs. Chandler calls it the "corporate governance revolution". An enterprise will continue to expand to internal organization management costs exceed the external market transaction costs. However, with the expansion of enterprise scale and the expansion of transaction internalization, the deployment of various factors of production is more complicated, the management of enterprises is more and more complicated, the management cost is increased greatly, and there is a big enterprise disease, which will make the utilization efficiency of the resources gradually reduced.

Is there a new mechanism, which can take advantage of market mechanism and enterprise mechanism, and eliminate the shortcomings of market mechanism and enterprise mechanism?

The internet has made it easier for information search, communication, negotiation and payment, and has significantly reduced the cost of transactions. At the same time, the Internet has aggregated the power of group creation, users, suppliers, partners and so on more and more participate in the enterprise's value creation activities, significantly reducing the cost of enterprise management. So, between market mechanism and enterprise mechanism, there appears "third hand"--value network mechanism, that is, through the integration of resources rather than integration or simple transactions, with open, sharing, mutual benefit, reciprocity, collaboration, and partners to form a value community share of benefits, together to create and share value.

Value network is the relationship and structure of value creation, realization, transfer, delivery, acquisition and distribution formed by the cooperation between stakeholders, and its essence is collaborative economy. Under the specialization of division of labor, through a certain value transfer mechanism, under the corresponding governance framework, with a certain special assets or resources of the enterprises and related interest groups together to create value for customers. The value of a product or service is created by the members of each value network and integrated by the value network, and the value created by each member of the network is an integral part of the final value. Value networks provide access to information, the new mechanism of resources, market and technology not only reduces transaction cost and management cost, but also plays an important role in developing economies of scale, economy of scope and externality of network, creating greater value space, realizing and delivering customer value while helping enterprises to achieve strategic goals.

These factors are intertwined, interacting, not only to enhance the business environment uncertainty, future unpredictability, business system complexity, but also lead to a destructive, large-scale transfer of commercial power. Global business has entered a new era of structural changes, enterprises create value of the way and logic has undergone a fundamental change, the past well-known mode of operation and familiar management methods are no longer effective.