Robust E-Marketplace Exchanges – A quick check
On one hand, this business model best suits the asset intensive business – factories, truck fleets, data centers, networks to achieve high utilization rates and therefore their returns on invested capital. On the other hand, it helps the entrepreneurs and companies scale up their business with quick access to these assets at no fixed investment cost and hence achieve a competitive equity. In effect business are getting to run on the variable costs with no/less fixed costs and hence keeping their balance sheets light.
All is well as long as these leaders can match up their supply with the demands. However what happens when the demand exceeds the supply, will the single supply chain powerhouse be able to promise indefinite/endless supply capacity to its suppliers & eco system. A competitive advantage through scale may be hard to maintain when many players, large and small, have equal access to resources at low marginal costs.
Comments
When demand exceeds supply at least we will be able to sell our products but think of the other case when supply exceeds the demand?? Worse will be such a kinda scenario. May be the supply chains have to be more demand driven and adaptive rather than flexible assuming constant demand which is near to impossible in the real world.
Posted by: Senthil | September 8, 2008 2:09 PM