Affiliations: Fordham University, Schools of Business, New York, NY, USA
Correspondence:
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Corresponding author: Evangelos Katsamakas, Fordham University, Schools of Business, 113 West 60th Street, New York, NY 10023, USA. Tel.: +1 212 636 6192; E-mail: [email protected]
Abstract: A defining feature of digital transformation (the digitization of business and economy) is that networks of firms, instead of individual firms, are competing with each other. While competition shifts from the level of firm to the level of networks, it is not well understood how value networks compete. This article makes a conceptual and analytical contribution to this gap in the literature. Introducing the concepts of overlapping and non-overlapping network competition, the article analyzes network competition in a setting where firms invest in intangibles or non-contractibles, such as knowledge sharing and innovation. One main finding is that as non-contractibles become more valuable to end-consumers the industry structure is more likely to shift to competition among non-overlapping value networks. The paper proposes that IT affects network competition through the reduction of cost of investment in non-contractibles and the evolution of consumer preferences.
Keywords: Value networks, network strategy, strategic networks, technology platforms, business ecosystems, buyer-supplier relationships, incomplete contracts, information sharing, knowledge sharing, digital transformation
