This essay seeks to
dissect cost structure issues and advance arguments on whether lower
transaction cost positions small firms well to equally compete in an ecommerce
environment with large firms in supplying information goods and services. In
addition it looks to explain how network externality affects firm operating
strategies.
In the contemporary business world, large firms often
dominate markets in the supply of goods and services. The aforementioned is not
limited to only commodity market as it is also evident in information market
where information goods and services are often supplied by large firms. Often
at this state, small firms are locked out of the market as large firms have
huge capital base and are able to survive from low profits. However, given low
pricing of information goods and services, small firms are unable to meet their
costs of production. Yes, Low transaction costs in ecommerce will position
small firms well to compete with larger firms
(Gangopadhyay, 2002). The aforementioned is relatively because the
transaction costs will be similar across the market and small firms will be
able to meet their production costs.
According to Hirschey
(2008), network externality is change in either a benefit or surplus
that is accrued by an individual from a good or service given that the number
of other individuals consuming the same commodity changes. Network externality
often has adverse effects on a firm operating strategies and cost. For example,
given that popularity of a given good produced by a firm increases, the good will
relatively increase in values as more consumers will be willing to use it.
Here, a firm will be forced to relook into its strategies and align it well
with the market changes. For example, the prices of the good will be adjusted
upwards, production of the good will be increased (Gangopadhyay, 2002).
References
Gangopadhyay, A. (2002). Managing Business With Electronic
Commerce: Issues and Trends. Pennsylvania: Idea Group Inc (IGI).
Hirschey, M. (2008). Managerial Economics. New York:
Cengage Learning.
A better gadget for the economics is present here in this area. You can really define the new field where anyone can grasp the knowledge or the information. You can also read this post and can make your work more good.
ReplyDeleteA new blogspot of the students is waiting for you here. You can get the assignment for the economics here and can settle your life with the better positions. You can get the deal with the continued offers without wasting any time.
ReplyDeleteSee the area of the medical terms where you can find the new deals of the task force with this link of the happiness. Get the link of more with the new area of growth and get the new feature to make your life more good.
ReplyDeleteVery informative and great article with good research references ideas here. It is good information for the builders who build structures and wants to have good building material.
ReplyDeleteThese are lovely and super adorable! I am in love with the idea of creating your own and it is more budget friendly https://www.characterletter.com/our-services/character-reference-letter-for-court/! There are many useful and creative ideas to try on your blog.
ReplyDelete