Fed EX

12 Pages 2943 Words

Literatures

1. The new economy requires innovation to gaining competitive advantage

When we talk about the new economy, we're talking about a world in which people work with their brains instead of their hands; a world in which communications technology creates global competition - not just for running shoes and laptop computers, but also for bank loans and other services that can't be packed into a crate and shipped; a world in which innovation is more important than mass production; a world in which investment buys new concepts or the means to create them, rather than new machines; a world in which rapid change is a constant; a world at least as different from what came before it as the industrial age was from its agricultural predecessor; a world so different its emergence can only be described as a revolution. The Characteristics of the new economy include:
· Significant levels of technological innovation, investing in innovative activities with new product/services or developments in existing product/services continually coming on stream;
· Schumpeterian competition
· High fixed costs in relation to variable costs
· Fixed costs often sunk costs
· Potentially long lived assets
· High levels of uncertainty over the size and longevity of the market for any given product or service
· Multiple products/services manifesting economies of scope as well as economies of scale.
· Some degree of vertical integration for at least some firms in the industry
· Investment in innovative products, and
· Subsequent pricing strategy (product life cycle pricing)
. The primary challenges are:
· Accelerating rates of change
· Increasing levels of competition
· The globalization of business competition
· Rapid technological change
· Amore diverse work force
· Resource shortage
· The transition from an industry to a knowledge-based society
· Unstable market and economic condition
· Increasing demands of const...