September 30, 2011

The modular Economy

Roland Berger Strategy ConsultantsSource: 

The division of labor in the world economy continues apace. Small, agile, networked entities are increasingly successful, but big industrial giants are also profiting from the de-linking of the supply chain. In many sectors, clearly defined interfaces make cooperation with suppliers and service providers much easier than it used to be. The age of business ecosystems has begun. It is an age of collaboration between companies of very different sizes, and resurrecting one of the oldest questions in business: "How big should my company be?" There is no one-size-fits-all solution; rather, there are many different approaches to answering it.

Small versus big?

A whole new army of Davids is on the rampage, some Goliaths are being slain, and small is the new big. US journalist, law professor and star blogger, Glenn Reynolds, has raised this subject a couple of times on his blog, During the middle of the last decade, he pointed out that digital technology and the Internet were creating new opportunities for small businesses. Geeky students could run flourishing online businesses from their dorm rooms, and microbreweries were taking significant market share from giants like Miller and Budweiser. 

Reynolds described how 20th-century mass production, with its obsessive quest for economies of scale, no longer met the needs of 21st-century customers. Small was suddenly cool and, as he pointed out somewhat immodestly, a small blog founded in 2001 could attract more readers in a day than many big local papers attracted in a week.  READ MORE


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