Product details

Develops a framework for exploring the question, "How does service affect the economics of Internet organizations?" Development of the framework requires an understanding of the different forms service takes in organizations that conduct business through the Internet. These forms are described as "virtual" (either pure information or automated) and "physical" (requiring some degree of human intervention). Because the nature and quantity of physical service necessary to deliver value to customers influence the quantity of human intervention required, they also influence a firm''s ratio of variable to fixed costs, which alters its "scalability." A paradox occurs: many venture capitalists and proponents of Internet business view reduced scalability negatively; yet the cause of that reduction in scalability, human intervention, often helps a firm to differentiate its offering to customers, thus providing a source of competitive advantage. Also illustrates that scalability alone is insufficient to generate profit.; Enables participants to understand how service affects the economics of Internet organizations. Illustrates the important role of human resources for most services using the Internet for delivery of their core service encounter. Shows how a few services with high scalability enjoying network effects can use the Internet to increase dramatically their organizational efficiency and customer effectiveness simultaneously.