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TERRA ECONOMICUS

INDUSTRIAL ENTERPRISES: ELECTRONIC VS. TRADITIONAL BUSINESS MODEL

TERRA ECONOMICUS, , Vol. 16 (no. 4),

The most important reasons for choosing a business format are access to resources (including technologies) and a response to market signals. If a company already exists, its possibilities for change depend on various stimulating and restrictive factors. The article discusses the features of the transformation of traditional industrial enterprises business models. The methodological basis of the study is the concept of business models. We also use a problem oriented approach that allows for the specifics of industrial enterprises. Based on the systematization of structural elements, we distinguish between four types of business models: traditional, technological, service and digital. There are two possible strategies for changing the traditional industrial enterprise: technological and service business models. Traditional industrial enterprises should move from scale effect maximization and material assets optimization to network effects and the development of technological systems. We examine the case of the Siemens AG that describes the transition from the traditional business model to the technological and service business model. The author looks at the motivational mechanisms for changing the business model of traditional industrial enterprises through the prism of the increasing returns phenomenon. We characterize the types of business models by different ways of achieving increasing returns. Our research also proves that the main peculiarity of the transition speed is technological standards, which can be achieved through the use of a platform business model and the creation of a digital shadow. The research results can serve as the basis for studying the costs and benefits from a traditional industrial enterprise’s transformation, as well as from the development of new industrial policy mechanisms.


Keywords: business model; industrial enterprise; electronic markets; digitalization; technological standard; increasing returns

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606