Increasing Returns: Competing for Customers in the Global Market

Vandermerwe, Sandra
December 1997
Journal of World Business;Winter97, Vol. 32 Issue 4, p333
Academic Journal
This paper discusses emerging, increasing returns notions, comparing it to the diminishing returns model of the industrial era, with the consequent implications for the global manager. Increasing returns, it is argued, comes from a different set of management premises: capitalising on the time value of individual customers in new "market spaces, " rather than from making and moving more "things" in traditional product/market categories; leveraging intangibles, abundant and infinite, which increasingly deliver the value to customers; and sharing markets, resources and technologies with others in new "competitive spaces, " rather than adopting proprietary behaviour, in order to get critical market mass and lock in. These premises, if consciously managed and translated into strategy, the paper argues, lead to an accumulating advantage and disproportionate returns for corporations.


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