Are "webs" a new strategy for the information age?The key question: should you adapt or shape?How much ofthe wealth do you share?Managing the dynamics of increasing returns
John Hagel III
I would like to thankEric Beinhocker.Dick Foster, Joe Heel.Will Lansing. TetsuyaMori, Mike Nevens,Patil Sagawa. OlivierSibony, Jayanl SInha,Chuck Stucki. andSoimi Subtamaniamlor their contributionsto the thinking on webstmlcgics. In addition.McKinsey's StrategyTheory Initiativeand the MultimediaPractice have activelysupported thedevelopment of theideas presented inthis article.
havealso benefited fromthe writings of, andconversations with,Brian Arthur andStuart KaulTman ofthe Santa Fe Institute.
is aprincipal in McKinsey'sSilicon Valley office.Copyright 'C 1996McKinsey & Company.All rights reserved.
HAT DOES IT MEAN when oiie
theworld's biggest matiufacturers of
personal computers fitids it difficultto stay itidependent? In the old days, biggermeant more powerful - and often a highmarket multiple too. Butnow,just the oppositemay be true.Think of Netscape, a company that barely existed18 months ago, and even today numbers onlya couple of hundred employees. Is Netscapeovervalued? Perhaps. But if you consider howquickly it has mobilized other eompanies to sup-port and implement its technology, you begin tosee why the excitement may
justified.Netscape exemplifies a new form of industrialstructure. "Webs" are clusters of companies thatcollaborate around a particular technology.Probably the best-known is the Microsoft andIntel personal computer
in which hardwareand component makers, software developers,channel partners, and training providers com-bine to deliver the overall value proposition of
Windows PC. Other webs have formed aroundNovell's PC networking systems and SAP's inte-grated enterprise IT solution for manufacturers.
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