AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Web revolutionizes business models, pricing structures
Reminiscent of a million-dollar California cliff-top home splintering apart as it slides into the ocean, tradition-bound business assumptions are falling apart under the relentless push of the electronic marketplace.
Mainstream industries, ranging from retail to chemicals, are transforming in order to compete in an electronic-commerce economy in which the main component is the dynamic pricing model.
Companies are losing control of their pricing; It has become a random variable that can no longer be built into the business model, said Edward Yardeni, chief economist at Deutsche Bank Securities, in New York.
"If you can't manage prices, you have to make risky decisions about cost cutting, the use of new technology, increasing productivity, and introducing innovative products and services to give yourself a cushion in the eventthat your pricing gets weaker," Yardeni said.
The chemical industry, a $1.6 trillion sector that represents 10 percent of world trade and 10 …