Network commerce in a globalized economy

Before you read

Which of the items in A do you associate with each of the two headings in B?

A.
start-and-end Amazon.com cybernetic
mechanism
linear buyers and sellers ongoing commercial
come together and relationship
then part

lost productivity sellers and buyers business

between two relationship likely to
exchanges be sustained in the
future

access to the use of non-linear providers and users

goods/services in replace sellers and
extended time buyers
segments
conventional you pay for the time the World Wide Web
relationship for which you have used to make the
access to a purchase
product/service

24/7 relationship rentals and the physical product

with the client memberships is exchanged
information can be separate market products/information
updated transactions get obsolete within a
short period of time

B.

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 the conventional/discrete the continuous / network
model model

While you read

Scan the text on pages 3-4 to check your ideas about the items on page 1.
Group the questions in the box below by paragraphs they refer to in the text.

____ Is Amazon.com listed as an example of the old or the new

market model?

____ How does the role of the client change?

____ What is the alternative to ordering an individual compact

disc?

____ In which way does the conventional market operate?

____ Does the new network model which does not deal with
physical products
eliminate property?

____ Explain the transition from selling to providing.

____ What is the effect of new communications technologies on

todays markets?

____ What does a client in the new market model pay for when it

comes to music?

____ What eventually makes such markets obsolete?

____ Why does Encyclopaedia Britannica sell far fewer physical

books?

____ What seems to be the most valuable resource at the

moment? Why?

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 ____Find two reasons to explain why music companies prefer
commercializing an
ongoing relationship with the user.

____ What are the two major changes concerning the

conventional role of sellers and
buyers and the exchange of goods?

As you read, insert the missing prepositions in the text.

1. Markets are linear, discrete and discontinuous modes

of operation. Sellers and buyers come together for a
short moment of time to exchange goods and services,
then part. The elapsed time between the completion of
one exchange and the introduction of the next exchange
represents the lost productivity and added cost
_______doing business that eventually make markets
obsolete.
2. The new communications technologies,
_______contrast, are cybernetic, not linear. They allow
_______continuous activity. That means that the start-
and-end mechanism of market exchanges can be
replaced _______ the idea of establishing an ongoing
commercial relationship between parties over time.

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3. For example, consider the Amazon.com way of selling
_______ the new music company models for marketing
music. Amazon.com operates in a conventional market-
exchange relationship with customers even though the
computer and World Wide Web are used to make the
purchase. The buyer pays for an individual compact disc,
and the seller ships it by mail. By contrast, in the new
network model used by music companies, the user pays
a monthly subscription fee that gives him unlimited
access to the music company's library, including current
playlists _______ different celebrities. In the old
Amazon.com model, the physical CD the property is
exchanged between seller and buyer, whereas in the
new network model, the user is paying for the time
_______ which he has access to the music.

4. In pure networks, property still exists, but it stays

_______ the producer and is accessed in time segments by
the user. Subscription, memberships, rentals, licensing
agreements etc. become the new medium of exchange.
The music company creates a 24/7 relationship with the
client, making him part of the user network. Now the
user is paying for access to the music when he is asleep,
awake, working, as well as when he is listening to the
music. The music company prefers commercializing an
ongoing relationship with the user _______ a period of
time, rather than having to sell each CD _______ a
separate market transaction. It's a matter of time and
cost. The music companies also favour the network
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model _______ discrete market transactions because the
relationship with the user is more likely to be sustained
in the future. Consider another example. While
Encyclopaedia Britannica still charges $1,395 for its
twenty-two-volume set of books, the company sells far
fewer physical books. Instead, the company puts the
books' contents on the World Wide Web, where
information can be updated and accessed continuously.
Users now pay a subscription fee to access the
information over an extended period of time. The
company has thus made the transition from selling a
physical product to a buyer _______ providing the user
access to a service over time.

5. In a world where everyone is connected _______

cyberspace and information is being exchanged _______
the speed of light, time not materials becomes the
most scarce and valuable resource. In pure networks,
providers and users replace sellers and buyers, and
access to the use of goods in extended time segments
substitutes _______ the physical exchange of goods
between sellers and buyers.

(Source: J. Rifkin: The European Dream: How Europe's Vision of the Future Is Quietly Eclipsing the American
Dream, 2006)
After you read
Look at the items on page 1 again. Complete the table so that you create pairs of
corresponding items.
The missing items are marked with (*). The first example has been done for you.

the continuous / network the conventional/discrete

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 model model

24/7 relationship with the client *conventional

relationship
OR ongoing commercial
relationship
* products / information get
obsolete within a short period
of time

*
sellers and buyers

access to the use of *

goods/services in extended time
segments

OR ______________________________ /

rentals and memberships

business relationship start-and-end mechanism /

likely to be sustained in buyers and sellers come
the future / together and then part

non-linear / cybernetic linear /

** _______________________________ /
separate market transactions

2. Developing an argument: Sentence connectors

A. Adding another (similar) point AND

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 In pure networks, providers and users replace sellers and buyers, and
access to the use of goods in extended time segments substitutes for the
physical exchange of goods between sellers and buyers.

Also
As well as
In addition
Besides
Furthermore (slightly formal)
Moreover (formal)
What is more (formal)

B. Adding a contrasting / opposing idea

The buyer pays for an individual compact disc, and the seller ships it
by mail. By contrast, in the new network model used by music
companies, the user pays a monthly subscription fee.

While Encyclopaedia Britannica still charges $1,395 for its twenty-two-

volume set of books, the company sells far fewer physical books.

Amazon.com operates in a conventional market-exchange relationship

with customers even though the computer and World Wide Web are used
to make the purchase.

But
Whereas (slightly formal)
While (slightly formal)
Unlike
In comparison with
By contrast

Yet
However
Although
Even though / Even so
Despite
In spite of (the fact that) (slightly formal)
Nevertheless (slightly formal)

C. Cause / result

In todays world everyone is connected and information is being

exchanged at the speed of light. As a result, time not materials
becomes the most scarce and valuable resource.

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 Because
Since
As
Due to
Owing to
Because of
As a result of
Therefore
For this reason
Consequently (formal)
Thus

3. Practice.

Task 1. Identifying the relationships between arguments.

Use linkers in A / B / C above to put the following arguments together:

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 How do multinationals operate in todays global economy?
Vietnam gives us a clue.

- infrastructure is poor
- there is a shortage of skilled workers
- Intel has opened a plant in Ho Chi Minh City
- in the domestic market in Vietnam itself, current sales are
low
- most people can only afford a cheap desktop PC using
unbranded components
- with a population of over 80 million
- information-hungry youths filling the internet cafs
- there is a lot of potential

Task 2: Owning vs. renting

2.1. Providing arguments for buying vs. renting

Brainstorm the reasons for / against renting /owning ICT resources (hardware /
software).

Read the text Owning versus renting: The Hidden Costs of Owning Technology on
the following page. How do your ideas compare with arguments presented in the text?

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 Owning versus renting: The hidden costs of owning
technology

The actual costs of buying and owning equipment are much

greater than just the price tag at the store. The TCO (Total
Cost of Ownership) of a computer is estimated between 3 to
4 times the purchase price. These are a few of the factors to
take into account when making a rent-versus-buy decision:

Maintenance costs: The rental contract always covers full

maintenance of hardware. You won't need a technician,
spare parts, repair tools or maintenance records.

Obsolescence costs: Technology becomes outdated quickly.

Renting overcomes obsolescence because we stock the
latest technology with advanced features for engineers,
graphic designers and power users.

Disposal costs: When it's time to get rid of used

equipment, owners incur the expenses associated with
selling used equipment or disposing of hazardous materials.

Downtime costs: When rented equipment breaks down, we

offer overnight replacement. You won't lose precious time
while equipment is in for repair.

Warehousing or storage costs: Return idle equipment

rather than using space to store it. When you don't need it,
it's out of your way! This convenience especially interests
businesses who operate in small offices with low overhead.

Taxes and license costs: Personal property taxes and

license costs don't apply to rented equipment.

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 The next time your company needs technology, consider
renting instead!

2.2. Collocations (Word partnerships)

Find the missing words in the collocations below.

cover ________________________ incur ________________________

become ______________________ lose _________________________

stock __________ with __________ return _______________________

overcome _____________________ ________________ do not apply

dispose of hazardous ________________costs

materials

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Task 2.3. Using connectors to join / expand arguments

Use the text on page 9 and expand the arguments in table B below. An example is given in
table A.

A.
1. Choose a 2. Find an 3. Expand the sentence
sentence appropriate linker to by using a part of the
from the list. expand the sentence text on page 9 or your
(addition / cause / own argument.
result / contrast ...)

The actual costs BECAUSE there are many other costs

of buying and involved, such as maintenance
owning costs.
equipment are
much greater AS A RESULT, many companies are
than just the
price tag at the
store.

B.

BECAUSE AND BUT SO

AS A RESULT HOWEVER SINCE BECAUSE OF THAT EVEN
THOUGH ...

a. Technology becomes outdated quickly.

b. You should consider returning idle equipment.

c. Certain costs do not apply to rented equipment.

d. You wont incur the expenses associated with disposing of

hazardous materials.

e. We stock the latest technology with advanced features.

f. The TCO of a computer is estimated between 3 to 4 times

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 the purchase price.

g. When rented equipment breaks down, overnight

replacement is provided.

h. The next time your company needs technology, consider

renting!

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