Differences Between Old Economy and New Economy

DIFFERENCES BETWEEN OLD ECONOMY AND NEW ECONOMY BASIS

OLD ECONOMY

NEW ECONOMY

MARKETS

Economic Development

Steady and linear and quite  predictable

Maret !hanges Economy #ifecycle of $roduct and %echnology &ey Economy Drivers

Slow and linear Supplier driven #ong #arge 'ndustrial firms

Scope of !ompetition !ompetition + ame of the (ame Mareting + ame of the (ame

#ocal Si-e + %he .ig eats the Small Mass Mareting  

$ace of .usiness Emphasis on .usi .usine ness ss Deve Develo lopm pmen entt /pp /ppro roac ach h Success Measure 0rgani-ation of $roduction &ey Drivers to (rowth &ey 3esources of 'nnovation

&ey %echnology Drivers

Main Sources of !ompetitive /dvantage

Scarce 3esource Decision maing 'nnovation $rocesses

Slow

Volatile  –

extremely fast change, with explosive upsurges and sudden downturns, and Chaotic  – the direction of economy’s change is not  perfectly clear  "ast and unpredictable !ustomer driven Short 'nnovative Entrepreneurial &nowledge and Service based firms (lobal )yper*competition Speed + %he fast eats the Slow Differentiation

ENTERPRISE

/pplicably faster with ever rising customer expectations Stability !hange Management Stra Strate tegy gy $yr $yram amid id + vis visio ion, n, miss missio ion, n, 0pportunity driven, Dynamic goals, action plans Strategy $rofit Maret !apitali-ation 1the maret  price of an entire company2 Mass production "lexible and #ean production 1doing more with less2 !apital $eople, &nowledge, !apabilities 3esearch 3esearch, Systemic innovations, nowledge management, integration, new business creation, venture strategies, new business models /utomation and Mechani-ation 'nformation and communication technology, e*business, computeri-ed design and manufacturing /ccess to raw materials, cheap labor Distinctive capabilities + 'nstitutional and capital for conversion 4 cost excellence, moving with speed, reduction through economies of human resources, customer scale  partnership, differentiation strategies, strategies, competitive strategies "inancial capital )uman capital 5ertical Distributed $eriodic, #inear !ontinuous, Systemic 'nnovation

$roduction "ocus

'nternal $rocesses

Strategic /lliances with other firms

3are , 6(o /lone7 mindset

0rgani-ational Structure

)ierarchical, functional, pyramid structure

.usiness Model

%raditional + !ommand and !ontrol

Enterprise –wide business process management and entire value chain %eaming up to add complimentary resources 'nterconnected subsystems, flexible, devolved, employee empowerment, networed structure ew .usiness Models + 3efocused on people, nowledge and coherence

WORK FORCE

#eadership

5ertical

8or force !haracteristics Sills Education 3equirements Management* Employee 3elations Employment

Mainly Male4 )igh $roportion of semi*silled or unsilled Mono*silled, Standardi-ed / sill or a Degree !onfrontation Stable

Employees seen as

Expense

Shared + Employee Empowerment and Self*#eadership  o gender bias4 )igh proportion of graduates Multi*silled, "lexible !ontinuous #earning !ooperation, %eam wor  /ffected by Maret 0pportunity 93is "actors 'nvestment