Network Economy Business Management Strategy Of Choice

Being the representative of new economy, internet economy was developing rapidly in recent years and even more faster in late 90s of this century. Internet has pervaded to the whole economy and the traditional models of economy have been greatly changed by the progress of internet technology. To the enterprises in the internet economy, their decision on business management strategy is becoming more and more important for their future development.In this dissertation, firstly the writer reviews the classic theory of business management strategy to prepare for later analysis. It is focused on the steps of strategy management, the assort of strategy and the evaluation of different strategy. Secondly, the article discusses the economics theory of internet economy and its main features. Then through the actuality of internet companies, the typical problems in the strategy making are prompted. Beginning with these problems, this article demonstrates in detail the choice of business management strategy. The methods of case analyzing and theory research is adopted during the argumentation.Below is the main points of view of the article.Comparing with traditional economy, internet economy can greatly reduce the information cost which is very high and shows high mobility. The variable profit mostly comes from information profit. Internet economy is the best way to reduce information cost and information risk.From the point of view of macro-economics, the development of internet economy can increase the national economy and employment, restrain the inflation, and finally, smooth economic cycle.Unfortunately, during their development, some internet economy companies did not choose the correct strategy. This made the enterprise meet many kinds of difficulties, which include:Over emphasizing the scale of the company, raise the cost greatly.Not having clear target market, cause keen competition among companies.Not understanding what are really needed by the customer.Competing malevolently, break the rule of market. Because of these reasons, very few of internet economy companies can make profit. According to the theory of strategy management, some key factors are necessary for making proper strategy decision:First, clarifying the tenet of company. Internet is only artifice not purpose. Second, analyzing the environments of internet economy. Comparing with developed countries, the market economy of China has many shortcomings, i.e., the law system is not perfect, and our people have little knowledge of internet. The internet industry is obviously over-invested and shows strong decentralization. Their customers are too young to provide enough profit, while their provider, China Telecom, monopolizes the telecommunication market and makes their cost very high.Third, analyzing resources holding by the company. Presently, most internet companies have relatively plenty of money, well-educated and skilled employee. But they are short of either skilled commercial administrators, or the experience to integrate internet with their business. Most of them do not have modern storage and delivery systems. This increases the cost and decreases the service quality.Finally, we can come to the following conclusion: the internet economy companies have advantage in technology, employee, equipment and information, and have disadvantage in paying system, delivery system, cooperative system and experience of commercial activity.Therefore, the proper strategy for the internet economy companies are:Innovation strategy (product/service innovation and market innovation), is the requirements of both company itself and the individuation of customers.Merge strategy, it is not the merge between internet companies, but between internet company and traditional economy company. This kind of merge will overcome the shortcomings of both companies and reduce the operation risks. This strategy has special meaning for the reform of our national enterprise. To those companies that can not practice the str...