Academic journal article Journal of Economics & Management

Plug and Play Firms in the TNCs' Virtual Value Chain

Academic journal article Journal of Economics & Management

Plug and Play Firms in the TNCs' Virtual Value Chain

Article excerpt


Computerisation and informatisation of various fields of economy and society have significantly changed the conditions of the business' functioning in recent years. Companies are no longer viewed as single entities, but as a part of an integrated network of organisations, where information and communication environment plays a key role.

The growing virtualisation of a value chain is a manifestation of the implementation of ICT solutions in international business represented by TNCs. This creates new possibilities for enterprises to enter the value creation chain [Porter 1985, pp. 33-61]. Companies integrating the value chain, known as plug and play, are a reflection of this. Although a growing number of researchers are interested in virtualisation of economic activity, its analysis from the perspective of units integrating a value chain, i.e. plug and play, is not widespread, especially in Polish literature. An article is thus an attempt to present a new approach to value chain virtualisation - through the prism of its new integrators and connections. Given the above considerations, the objective of the study is to identify the role of plug and play firms in the transnational corporations' virtual value chain and their influence on the TNC's strategic decisions within the framework of value creation by the chain's new units.

The undertaken issues have a general character, systemising the research area and in no way deal with all its aspects. It is the introduction to the discussion on the role of plug and play companies in the TNC's value chain, focused on creating competitive advantage in the conditions of activities' fragmentation and its integration in the international scale.

The study involves a deepened literature analysis, basing the conducted research on the genetic method used for explaining the reasons of a studied phenomenon within the range of economic activity digitisation and value's creation chain virtualisation combined with literature analysis systemising theoretical approach to the discussed problematics. The analysis was based on foreign sources and to the smaller degree on Polish ones (due to their limited character).

1. Digitisation of the economy - implications for international business

1.1. Digitisation of the economy - conditions, symptoms

The information revolution entails a number of consequences that create a specific environment for the growth of the New Economy, involving the creation of knowledge, innovation and creativity and the use of information technology for the development and sales of new products and services. Physical distance is no longer as important as in the era before the IT revolution and the death of time leads to the emergence of new market segments. This creates new opportunities for development of trade and distribution of products through the digitisation of products and the development of the service sphere.

The turn of the XX and XXI century witnessed a massive development of self-organising techno-human networks due to information technology popularisation. Thanks to the Internet a user has an access to a complex infrastructure that enables him the so-called "cloud computing", i.e. using the network without the knowledge about the necessary technology [Kotler & Caslione 2009, p. 34]. With this type of networks, companies can reach the customer regardless of his place of residence, meet his needs and enable him to actively participate in the co-creation of the final product. At the same time there is a growing pressure from the client, who wants to have easy-to-use applications that allow them to compare the products' characteristics, their prices, transactions' execution and distribution. As a result companies operating on the international level, need to handle the following problems:

* increased price competition,

* the need to adapt to international standards in terms of the presentation of products, forms of payment (e-payment), distribution, after-sales service, etc. …

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