by Olga Annushkina

SDA Professor of Strategic and Entrepreneurial Management

• Profilo
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• Altri Post (16)

Digital platforms are creating anxiety among “traditional” incumbent businesses. “What if Google enters our business…?” is a common quest emerging from participants at a certain point of the scenario planning exercises we run in our classrooms. Every single business “household” in every single industry and in every single location seems to be threatened by these approaching massive waves of linked and networked clients and suppliers. Not only Airbnb it threatening the hotel business, taxis with Uber or Lyft and retailers with Amazon and Alibaba and the like, also the producers of industrial goods are watching closely Nest, Samsara, Greenwave systems and many others.

The platforms operate via a two/multi-sided market business model, connecting suppliers and buyers or providers of a service and its users, like Alibaba, Uber, or Taskrabbit. The financial sustainability of the business models based on platforms is related mainly to the economies of scale and to network effects. Once the core technology and business processes are in place, the cost of adding any new user to the platform is negligent, therefore contributing to strong economies of scale effect. In particular, once the “chasm” is crossed, the economies of scale continue persistently creating value for the platforms except for the moments when the growing amount of users is requiring the sequential production capacity updates. The network effect is enhanced by every new user (or supplier) that is making the service or the product more valuable to the existing or potential users. The scale economies and the network effect are both pushing the platform-based companies to grow, domestically and internationally.

by Olga Annushkina

SDA Professor of Strategic and Entrepreneurial Management

• Profilo
|
• Altri Post (16)

Growing abroad in the food services industry is challenging: local tastes and flavours, local food rituals, local religious and cultural constraints, local legislation on safety and quality. Add the perishability issue, high transportation costs and constantly changing cross border tariff and non-tariff barriers and you receive a perfect recipe of a business context for “fortune favours the bold” type of people. Exactly how I would describe Alexander Blanc, a Russian-Israeli, whom I met in 1999 in Milan when we both worked in management consulting.
Today we discuss the differences of doing business in three different locations – Moscow, Singapore and Bucharest – for Culinaryon, an international culinary school, the “Disneyland of culinary schools”.

by Olga Annushkina

SDA Professor of Strategic and Entrepreneurial Management

• Profilo
|
• Altri Post (16)

Offshoring and subsequent “coming back home again” reshoring choices by multinationals are once again raising doubts about the quality of long-term strategic decisions in both larger and smaller firms. A decision to outsource and relocate production in China and then, following the state incentives, to transfer it back to the US or Europe might be interpreted as a sign of excellent organizational flexibility, if we don’t take into account all the implicit and explicit costs related to the implementation of such important alterations to the firm’s operations and, not the least, the impact such decisions have on a firm’s reputation, research and development capabilities, perceived quality of its products and services.

by Olga Annushkina

SDA Professor of Strategic and Entrepreneurial Management

• Profilo
|
• Altri Post (16)

In the previous post we spoke a lot about differences related to doing business abroad. Different language, culture, economic and industrial structures, legal environment – all these barriers are forcing companies to the adaptation of their business models.
Research shows, however, that successful economic adaptation is not all. In our strategy courses we keep on arguing that companies are competing with their people rather than with products: “Management is about human beings”,  said Peter Drucker. And people across the globe are managed with similar principles even if with different practices: “What managers do in West Germany, in Britain, in the United States, in Japan, or in Brazil is exactly the same. How they do it may be quite different.” Attention to people and society, people directly or indirectly linked to the company, is becoming crucial in achieving the sustainability of foreign operations, in particularly in emerging markets.

by Olga Annushkina

SDA Professor of Strategic and Entrepreneurial Management

• Profilo
|
• Altri Post (16)

We do arbitrage all the time. Our daily routines consisting of private and work-related decisions are all about measuring and comparing the differences. An online purchase of a car insurance via a quote calculator: price arbitrage. Choosing a certain restaurant with a dinner with friends: benefits arbitrage. Using public transport vs. car: time arbitrage. Delocalization of an assembly line to an emerging market: labour cost arbitrage. Delocalization of an R&D centre close to a university hub: knowledge arbitrage.

To large extent, globalisation processes are all about arbitrage too – resources, products and services are shifted among countries in attempt to capture the opportunities arising from the differences among markets.
Digital networks, reducing barriers to international markets and connecting companies at the global level, have become a major catalyst of cross-border arbitrages.