The New Economy
|
Sandefjord, 2000-09-15. © Florina
|
|
|
|
|
What is all the fuss about? Is there a New Economy at all? If
there is one, how will it affect my business? There are many
questions these days. Perhaps more questions than there are
answers. We will try to answer some of these questions and
provide some clarity about the New Economy.
|
|
|
|
|
|
|
Yes, there is a New Economy.
Existing economic structures are
being recreated into a new shape. Almost every company is
reconsidering its concepts, competitors, and strategy.
But, the New Economy is still in the making. The changes are
going on at this very moment and the major changes are still to
come. The New Economy is not only the Internet Economy,
which accounted for about 5% of the U.S. Gross Domestic Product
in 2000. The changes will have a even bigger impact on
traditional companies: manufacturers and service companies.
This New Economy has three distinguishing characteristics: It
is global. It favors intangible things - ideas, information,
and relationships. And it is intensely interlinked.
The New Economy is about communication.
Communication is the economy. The vulnerability of an enterprise is
proportional to its dependence on manual communication for
doing good business.
|
|
|
|
|
Let us look at some consequences of the New Economy.
- Eroded margins. We have seen this in stock broking and
book sales where web shops sell their products and services
at far lower prices then traditional actors.
- Shortened time frames. Immediate delivery of information,
overnight delivery of goods - that is the trend.
- New competitors. As a book store, your new competitor is
not the other book shop a block away; it is the web shop,
maybe a continent away.
- Deconstructed supply chains. Sub-suppliers or competitors
could take responsibility for a major part of your supply
chain.
- Customer loyalty changes because of
comparability.
- Deconstruction and instability put higher demands on
strategy.
|
|
|
|
|
Guiding Principles.
- Evolution into the new economy is better then
revolution.
- Update your infrastructure for the new economy. Without
a modern ERP/CRM system with e-business functionality,
your business is vulnerable.
- Make communication a natural part of all your business
processes.
- Create organizational culture for the new economy.
- Look over your business: which parts are vulnerable to
competition from new companies who build their platform on
the new economy.
- Take leadership – define the strategies for small and
big moves.
As Peter Drucker taught us: Strategic planning does not
deal with future decisions. It deals with the future of
present decisions.
|
|
|
|
|
This article is free to be used if:
1) reference is made to the source and our copyright is stated, and
2) Florina is informed by email,
and
3) it is used without any changes.
|
|
 |
Florina
