Business Models in the Era of Network Economy

Abstract

This article presents an analysis of business models that emerged in the conditions of network economy. Turbulent changes in competitive environments caused it that traditional business models – which had proved effective in stable environments – have lost their power. As a result, new businesses and business branches have come into being. Their competitive advantage is no longer defined against the physical assets of a business organization, but is dependent on its intellectual capital, networked business processes and new, flexible organizational structures. An additional factor that has dramatically transformed the traditional business models is the rise of electronic communications and the growing business use of the Internet. Summing up, it is evident that network economy has given rise to completely new business models, i.e. methods in which companies gain their incomes and generate profits. Apart from the issues mentioned above, this article touches upon the problem of the typology and classification of Internet-based business models. Also discussed is competitive warfare employed by these business models. It is demonstrated that from the point of view of business opportunities created within network economy, the “leapfrog strategy” becomes one of the most attractive marketing warfare strategies. For contemporary businesses, the ability to design and implement a holistic model for e-business – with all its boundary conditions defined – becomes strategic from the point of view of their need to generate value for network customers and collaborates.