Success Factors and characteristics of the Next Economy
Companies rely on platform technologies to connect with clients, as shown in business models as Uber and Airbnb, creating synthesis between online and offline markets. Whereas concerns as eBay and Amazon form upstream and downstream services around the world.
Expansion is based on two explanations.
First, a broad target group can be reached through barrier-free access via websites and common social networks.
Second, business models of the next economy can be expanded to a broad target group. By owning a smartphone and installing an app, people can become service providers themselves, for example as Uber driver or an association like Lieferando. The user becomes the resource.
It is all about creating benefits such as customer experience, customer value, customer engagement and user experience. Companies that provide a network or/ and a platform for customers increase their value and therefore benefits are created on both sides – this is called “value fusion”.
The next economy is increasingly technology orientated which allows new processes and structures to be rethought and unleashes opportunities and potential.
An example: Conventional publishing and media firms are threatened by news aggregators and facing the loss of clients. Adidas decided to forego advertising on TV in favour of online placement and is planning to invest in digital future technologies such as 3D printing and robotics.
The next economys’ business models are characterized by transformation and disruption potential, which can include individual areas of theirs structures. The use of the permanently mobile Internet-connected smartphone for location and personal marketing or a cultural change which enables employees in service to meet customers individually with more freedom and services.
The creation of eco-systems is fundamental relationship building between business and people. Today’s artificial intelligence is essential for providing platforms to promote exchange and synergy between applications and technologies. Facebook followed this strategy by starting as an original new economy company it is now open to vendors with integrated shop solutions within the Facebook app and uses the service of chatbots.
Established companies are threatened being pushed off the market by new economy companies and have already begun to transform to the next economy. The existence of old, new and next economy at the same time is given through niches and monopolistic positions. Furthermore, tertiarisation of established producers can be observed. As a provider of “advanced and simultaneously less widespread services such as software production, leasing, renting, financing, or operating models”, industrial traders can strategically develop new business fields and generate relevant sales. The mechanical engineering industry, as an example, was forced to focus on hybrid value added models by increasing the manufacturing quality of competitors and international competition, and established early services as a complementary addition to their products.