CLASS 8 - Virtual Corporations
Virtual
(Defined):
Possessing powers
or capabilities of something else.
Producing the
impression of existing anytime and at any place (pervasive).
Virtual Corporation:
An ad hoc organization composed of
teams from various companies, suppliers, customers, etc., brought together to
accomplish some specific project. Virtual
corporations are a result of the development of office and communication tools
that allow several people or groups to work on a project from various
locations, each providing his or her skills or services without necessarily
meeting personally. Virtual corporations are loosely developed
"arrangements" of different people or companies who work together on
a project, to deliver a service, or to create a product, and then (once that
project is finished), disband, and move on to other projects and form other
"virtual corporations". In essence, a special informal corporation
has been formed with each member providing what he or she does best, with the
result that all members of the "corporation" benefit.
The concept of virtual corporations can redesign the way staff
work and the space in which they do so. It is a movement toward a more fluid
structure. It can take down "walls" and encourage more interaction
between staff members. This is not just about making staff members
telecommuters, but about changing the way they work. Through the concepts of
virtual corporation a group can be formed to customize a product for a specific
client's needs -- mass customization, rather than mass production, to meet the
needs of the future.
Virtual
Product (physical or service):
Formerly
well defined structures begin to lose their edges, permanent things start to
continuously change, and products or services adapt to match our desires.
Available at any
time, in any place, and in any variety.
Provides instant
gratification to consumer
Made possible by
innovations in information processing, organizational dynamics, and
manufacturing systems
Examples of Virtual Products and
Services:
eMail
Photographs
(Polaroid, 1 hour developing)
Video Cameras
(action and still)
Desktop
Publishing
Jiffy Lube
(service)
Travel
Reservations
Telecommuting
Banking
Transactions via ATMs
FAX
Consider how Internet technologies
have/will facilitate the growth of the “Virtual” concept.
Virtual products may actually
exist before they are produced. Their
concept, design, and manufacture stored in the minds of cooperating teams, in
computers, and in flexible production lines.
A perfect "Virtual" Product can never
actually exist, however, they can come close.
Example: Japanese Car Manufacturers are striving to virtualize automobile
production by putting manufacturing systems in place that will produce cars to
domestic order in just seventy-two hours.
Characteristics of Virtual
Corporations:
Common
partnership or affiliation
Common identity
among all members
Common
technologies
Common
methodologies and procedures that ensure consistency and quality of services
and products
Complementary and
non-competing capabilities and goals
Back to the definition of the
VC: Customers are integral to the
concept. Alvin Tofler in "Future
Shock, circa 1980, talked of "prosumers" (consumers who produced what
they consumed), and "de-massified" production.
Customers of the VC must be
integrated into the design, manufacturing, and distribution process on a
real-time basis.
In the VC, the customer plays a
role that may, at times, be indistinguishable from that of their supplier.
Workers in a VC may find massive
changes to the culture of their traditional work environments. For example:
Greater
responsibility and individual control whether they like it or not
Lack of a
familiar "status-quo" because there no longer is one
Forced
interaction with customers, suppliers, management and membership in ad hoc
teams
Demand for
greater levels of education and technical capability
Innovation is
becoming the key to success and VC's will be very
innovative. Example:
Beneton: Rather than knitting sweaters in different colors, they knit
sweaters in neutral colors and dye the completed garment to meet current market
demand. When coupled with a real-time
reporting system from retailers, response to color demand becomes instantaneous
and obsolete inventory is minimized.
Quick Response (QR) Chains are
becoming the leading production improvement initiative in the textile and
textile related manufacturing, distribution/retailing industry. QRs:
Rely on
multi-directional, real-time information
Pass sales and
inventory status to suppliers and manufacturers instantly
Trigger JIT
activities up to the retail level
Services in the Virtual
World: A good is an object, a device, a
thing; a service is a deed, a performance, an effort ..... It is whether the essence of what is being bought is
tangible or intangible that determines its classification as a good or a
service (Texas A&M's Leonard Berry).
All Virtual Products are service
like in that they:
Are not inventoried, rather they
are produced for immediate consumption
Are produced with a high degree of
customer involvement
Customer competence yields higher
quality products
Marketing challenge:
Value marketing will replace
Strategic marketing. (Define Value
Marketing)
Relationships with customers will
be developed that enable them to obtain maximum value from the product they
have purchased (and probably helped produce)
Customer satisfaction must be
absolute, not nearly perfect.
Customer expectation will drive
product performance.
Government Influence on VCs:
Tax and Government
climate must encourage long-term investment
Education must be
superior to current levels
Resource
conservation must be encouraged
Research must be
incentivized
What do you think
about the concept of Virtual Corporations?
Some Links to Articles about
Virtual Corportations:
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