Virtual Service and Goods Provision, The Next Phase Of Business Operation Across All Industries
Over the years, the world has witnessed several changes in different systems and procedures, which are primarily advanced to help in valuation creation for the stakeholders involved. Through this, it worth noting that the majority of the technologies used in the early 20th century have been completely phased-out in the 21st century. The primary drivers of these changes include constant technological innovation and invention as well as globalization that has been witnessed from the late 20th century. Similarly, the impact of demographic changes over the years on the reigning systems and procedures cannot be downplayed. All these factors influenced the changes the world has undergone over the years.
Through all these, businesses must maintain effective competition through enhanced operations in a cost-effective manner. A good number of large corporations including Coca Cola Company and Royal Mint Company among others have survived through all the changes witnessed over the years. Collis & Rukstad (2008), identifies that such companies actively and accurately predicted the future relating to the existing systems and processes they use. Predicting the future not only ensures effective business performances but also drives an individual business to acquire an essential competitive advantage and pioneer different changes affecting systems and processes used around the globe; hence create value to all stakeholders involved. In consideration of this, the study explores virtual service provision
Virtual Goods and Service Provision as the Next Phase of Business Operations across All Industries
Prediction of future business operations
In presenting this prediction, the study is set to deploy context analysis technique in deconstructing two articles, which include David Staut’s Use and Abuse of Scenarios and Scot and Clayton’s By Predicting Change. Additional articles that will be considered in this study include Porter’s What is strategy and Alstyne, Parker & Choudary’s Pipelines, platforms, and the new rules of strategy.
According to Anthony & Christensen (2005), the disruptive theory holds that businesses have opportunities for spurring their growth by bringing disruptive innovations to the market place. The value propositions embedded within such innovations will determine the level of success businesses derive. The value proposition offered might be new or be an improvement on the already existing ideas. However, the disruptive innovation approach faces the challenge of producing too expensive or highly enhanced products that provide exceeding value to consumers, thereby resulting in wastage of resources. The main reason in this regard is that businesses have the capacity to ensure faster innovation than the rate at which the lives of individual consumers change.
Though the future is uncertain, assuming a strategic approach always ensures a significant containment of such uncertainty. Stout (1998), observes that a strategic approach in predicting the future should be inclined to influencing it rather than responding to events. Through this, individual businesses should have in place a proactive mode rather than a reactive mode in which their micro-actions should correspond to the existing macro-actions within their environment with the primary focus of creating value for all stakeholders involved. Predicting the future also requires a creation of a viable mix between strategic positioning and operational effectiveness for success.
Why virtual provision of goods and services will form future business operations
The emergence of the internet of things (IoT) and cloud computing– the internet of things and cloud computing are lining up to be essential systems for effective data handling within the contemporary world. Though these systems are currently facilitating proper management of bid data among different organizations, the full potential and capacity of these systems are yet to be exploited (Narula & Jain, 2015). The few industries that have deployed virtual service provisions like telecommunication and gaming industries have enjoyed much success and have laid down the framework through which other industries should provide goods and services to their consumers. The emergence of IOT and cloud computing as essential systems in the contemporary world illustrates how the provision of services and goods are to be shaped in the future.
Changes in tastes and preferences among consumers- the contemporary world is witnessing a significant shift in relation to the tastes and preferences of consumers, which has resulted from the emergence of generation Z and generation Y to form a dominant consumption force (Berber & Đurić-Kuzmanović, 2017). These two generations were born and raised in an era of intense technological use; hence appreciate technology-intensive services and goods. The appreciation of technologically intensive goods and products will not end with these two generations as they will be key in informing future generations. The constant technological innovations witnessed in the contemporary world will also be in influencing future consumption trends; hence the move from physical provision of goods and services will be phased out in the future to allow for the virtual provision of goods and services.
The covid-19 pandemic– if there is one thing individual businesses have learned from the covid-19 pandemic is the need for adoption of the virtual provision of goods and services. The pandemic hit the world in a time when the majority of businesses operated on a face-to-face basis. As a result, a significant number of businesses ceased their operations as the healthcare framework advised against using physical contact with people or with goods (Bartik, Bertrand, Cullen, Glaeser, Luca & Stanton, 2020). Consequently, workplaces were closed and the lockdown protocol initiated by different governments ensured consumers had a restriction on their consumption options. As a result of all these, a significant number of businesses experienced a considerable drop in the level of revenue they generated. Individual businesses that are already using virtual service provisions experienced only a slight reduction in the revenue they generated.
Analysis of how these impact the need for virtual service provision
The close consideration of tastes and preferences among individual consumers is an essential aspect of effective strategic business operations. Creating value to individual consumers in relation to providing exactly what they want gives businesses a competitive edge that ensures effective competition (Alstyne, Parker & Choudary, 2016). Similarly, businesses should ensure they keep tabs with every emerging technology to enhance their level of competition and create value for their stakeholders. While doing all these businesses should also be wary of emerging macro-economic factors including pandemics like the covid-19, which have the ability to cause significant economic disruptions.
Profitable exploitation of new technologies like virtual service delivery heavily depends on the market size, cultural factors, social circumstances, and economic circumstances as well as consumer appetite. Effective business operations in the future will highly depend on these factors as well as the capacity of an individual business to provide virtual goods and services as a result of the earlier observed factors (changes in consumer tastes and preferences, the disruption caused by the covid-19 pandemic and the emergence of IoT and cloud computing as essential systems)
Before the covid-19 pandemic, the majority of businesses operated on physical contact basis considering that there was no need for providing virtual goods and services since several world systems and procedures were not ready for that, which could have resulted in wastage of resources. The pandemic was a source of surprise that shook the world and revealed how service providers in the future will look like. It demands a reactive approach from the whole world in which individual businesses have to adopt virtual service provision to enhance their competitiveness.
Theory Comparison from the articles
In explaining how Apple Inc. has dominated the telecommunication industry to control almost 94% of profits from less than 4% Alstyne et al., (2016), asserts that the contemporary world has experienced a shift in consumption patterns in which information technology has resulted in less need among consumers to own physical assets and infrastructure. The creation of virtual communities by exploiting the network effect forms an essential aspect of business operations in the contemporary world. On the other hand, Porter (1996), also asserts that achieving market positioning and operational effectiveness is not a strategy in the highly dynamic contemporary world’s business environment. These two are necessary elements but not sufficient in the end as they result in temporary competitive advantage, which is not sufficient in the long run. Through all these, Porter (1996), suggest the incorporation of operational effectiveness and positioning into the generic strategies like cost leadership, market targeting, and differentiation. Similarly, Collis & Rukstad (2008), also propose that strategy must define the objective in relation to the mission and vision of an individual organization, it must define the scope, and define the advantage to be used in creating value to stakeholders. Generating such a strategy statement helps individual organizations to acquire a strategic sweet spot. A strategic sweet spot helps in meeting the needs of individual consumers, as well as ensure effective competition and exploitation of the company’s capabilities.
All three articles provide insightful advancement that relates to the effective prediction of the future and enhanced business performance. The incorporation of positioning and operational effectiveness to generic strategies provides a cautious innovative approach with long term effectiveness. Such is necessary for effective prediction of future business operations and execution. On the other hand, the acquisition of strategic sweet spot and the creation of virtual communities give room for rapid innovation without considering the life span of such. Generally, these three ensure effective business operations in the future and provides different frameworks through which individual organizations can adopt the virtual provision of goods and services. However, the virtual community framework through the exploitation of the network effect seems to surpass all the others in achieving this mission.
Virtual service and goods provision model
All these inspired the virtual goods and service delivery framework advanced by this study. There are three elements that must be put in place for the effective operation of this model. These include structural, integrational, and infrastructural systems. Structural systems include service product interface, capacity planning, and technological equipment. The infrastructure system includes people, policies, processes, and performance systems while the integration system includes service supply chain, operations organizations, and coordination as well as learning and adaptive mechanism. The interaction between consumers and the organization during service executing is closely monitored with an enhanced feedback system to assess consumers’ perceived value of the total service concept. The model allows assessment of gaps and filling of such by enhancing the overall system as illustrated in figure one.
Figure 1 virtual service delivery system adopted from Narula & Jain (2015).
Case Study Application: Amazon Inc. As One of the Companies That Predicts the Future by Pioneering Virtual Service and goods Delivery
It is essential to highlight the steps that have been made towards realizing the virtual goods and services delivery by providing an example of a company that has successfully deployed virtual service delivery. The company chosen to illustrate this is Amazon Inc. Amazon Inc. is an American based company that primarily focuses on e-commerce. The company uses cloud computing to offer on-demand services to consumers (Narula & Jain, 2015). Through this, the company has created a virtual service delivery system that provides different goods and services to consumers across the globe.
Constant innovations and inventions have seen the company develop a system facilitating doorstep delivery of goods through the use of enhanced drones (Zulu, Ogudo & Umenne, 2018). Similarly, the company has also created a virtual community in which different businesses interact with potential consumers. These kinds of service and goods delivery systems informs the future systems and procedures to be used in goods and services delivery. The amazon web service (AWS) cloud computing is also considered as one of the most secure cloud computing platforms, which also gives the company a significant competitive advantage in this era of cybersecurity threats.
Conclusion
The future of the provision of goods and services heavily relies on the virtual service delivery system as seen in the case of Amazon Inc. in which the company has created a virtual community and effective and efficient virtual service and goods delivery system. The company has optimally exploited network effects and created a virtual community that not only informs the current business operations and shape the future. It has delved operational effectiveness and market positioning to achieve a long-lasting competitive edge in its industry. Moreover, the company aims to continually increase the level of customer experience by using the internet and technology in helping consumers find, discover and buy anything, as well as in empowering businesses and content creators to maximize their success. This has enabled the company to acquire a strategic sweet spot. On the same note, with different factors like changes in demographic structures and increase technological inventions and innovations as well as emerging catastrophes like the covid-19 pandemic the future of service and goods provision heavily relies on virtual systems and procedures.
References
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Narula, S., & Jain, A. (2015, February). Cloud computing security: Amazon web service. In 2015 Fifth International Conference on Advanced Computing & Communication Technologies (pp. 501-505). ieee.
Zulu, L. L., Ogudo, K. A., & Umenne, P. O. (2018, December). Emulating Software Defined Network Using Mininet and OpenDaylight Controller Hosted on Amazon Web Services Cloud Platform to Demonstrate a Realistic Programmable Network. In 2018 International Conference on Intelligent and Innovative Computing Applications (ICONIC) (pp. 1-7). IEEE.