"Classic examples of ‘network industries’

Definitions

What is actually network industry? There are many definitions by various reviews, academics, journals by different authors. According to (Claude Crampes, September 1997), there is a strong heterogeneity in the population of the so-called network industries and the frontier with other types of industries is somewhat fuzzy. That electricity, telecommunications or postal services must be studied as networks is not questionable. In contrast, food-retails, newspapers or insurance services, although they possess some similar features (e.g. multi-point distribution), often are not called networks. (Claude Crampes, September 1997)

The essence of a network is that (almost) every pair of nodes can be linked by more than one line. Consequently, the path between an initial node and a terminal node is generally not unique. This allows important organizational advantages, but it may also imply some costly drawbacks when the flows cannot be perfectly controlled. This characteristic of multiple potential links explains why many economists enlarge the notion of network to informal organizations, such as the set of the users of VHS video-recorders or the users of PC-type computers. Their common feature is that flows of products or services can be easily transmitted between any two points in the network, with or without the help of a material infrastructure. (Claude Crampes, September 1997)

Network outcomes occur whilst the fee of a services or products to a purchaser is contingent on the quantity of different humans using it (Farrell & Saloner, 1985, 1986; Katz & Shapiro, 1986, 1994). For instance, the value of an internet public sale website online such as eBay to its customers, significantly hinges at the number of buyers and sellers using it. Network consequences form opposition in a huge spectrum of markets in our economy, from technology sectors including video games and software to extra conventional groups inclusive of HMOs, credit score playing cards, and actual property (Eisenmann, Parker, & van Alstyne, 2006; Gupta, Jain, & Sawhney, 1999).

The below figures shows the two different types of network which used by the users in different ways for different purposes. 

Figure 1: different computer network types

(Source: Google images)        

                                   Figure 2: social media network

(Source: Google images)   

In the stream of social media, there are many social media sites that people can connect to each other from all over the world. Facebook is the most popular social network site which people use for many purposes. Other social media such as: LinkedIn, Instagram, Twitter also used by the users all over the world to stay connected via loved ones. According to (Anon., n.d.), it has clearly stated about tis social media networks in separately in a manner. Like with content marketing, because of the constantly developing net marketing industry, there are infinite virtual media and social networking web sites, all of that have a unique characteristic and motive. As a part of an introduction, right here are some social community examples,

Facebook is the most important and arguably most powerful social community inside the global with 1.55 billion active monthly customers. Regardless if you are a startup or fortune 500 enterprise, you need to be on Facebook and start engaging together with your consumers.

Twitter is called the ‘‘within the second’’ platform and boasts a deferential 255 million energetic monthly customers. Twitter is a great on-line advertising and marketing device for organizations that need to reach out to human beings (and are ready for a respond). (Anon., n.d.)

Instagram is a visible platform designed for customers to submit, share, comment and interact via virtual media. As the old pronouncing goes, a photograph is really worth one thousand phrases. (Anon., n.d.)

LinkedIn is seemed as the professional social networking website online. LinkedIn in large part specializes in b2b advertising and marketing instead of b2c. (Anon., n.d.)

The other network type in the industry most of the people using is “social media networks”. It has been defined in many ways by different authors, journals and other academic resources. Social Media has been defined as websites which allow profile creation and visibility of relationships between users (Boyd & Ellison, 2008); web-based applications which provide functionality for sharing, relationships, group, conversation and profiles (Kietzmann et al., 2011). Social media has been referred to as “social media sites” (Diga & Kelleher, 2009), or a set of information technologies which facilitate interactions and networking (Kapoor et al., 2017; Oestreicher-Singer & Zalmanson, 2013). However, there appears to be a broad agreement that Web2.0 technologies played a significant role in the development and adoption of social media.

Another definition of social media refers to “Internet-based applications built on Web 2.0, while Web 2.0 refers to a concept as well as a platform for harnessing collective intelligence” (Huang & Benyoucef, 2013 p. 246). Social media, such as Facebook, Twitter, and LinkedIn, provide people with a pervasive network connectivity (Asur & Huberman, 2010).

Key distinctions between the network industry and non- network industry

Theoretical basis of the network industry depends on certain factors literature reviews has stated in numerous ways. In certain industries the value of a given product or service to a consumer is contingent on the number of other consumers of the same product1 (Farrell & Saloner, 1985; Katz & Shapiro, 1986). Examples include telephones, fax machines, electronic mail, and online auctions. In these “pure” network industries, there is virtually no value for the product in the absence of other consumers, and the value of the product increases exponentially with the number of fellow users of the product. The cumulative number of users at any given time in the product’s life (i.e., the network size) is its installed base. Because consumers desire compatibility with others, a product with a large installed base should be favored over one with little or no existing installed base.

Sources value another factor, which can be explained in the network industry. In network industries, consumers derive value from two aspects of a given product. First, these products have some degree of network value or the value stemming from other consumers already using the product. For example, for certain computer applications, consumers gain value from the ability to interact and exchange files with a compatible network. Second, such products also have a stand-alone or network-independent value that is retained in the absence of a network, such as a graphical interface computer application that offers intrinsic simplicity and intuitive features in its use (Brynjolfsson & Kemerer, 1996). More generally, network value is a reflection of the benefits associated with a large cohort of fellow adopters (installed base) for the product, whereas network-independent value represents benefits conferred by inherent, “physical attributes embodied in each unit of the good” (Bental & Spiegel, 1995).

In addition to these direct network effects, network value is also influenced by indirect network effects. Indirect network effects occur when complementary products are critical to the use of a given product and its value stems indirectly from the volume and diversity of available complements (Venkatraman & Lee, 2004). For example, video game consoles have little value without corresponding software titles, and the value of a console increases with the number and variety of complementary titles (Schilling, 2003; Venkatraman & Lee, 2004). Concurrently, game developers must decide which consoles to target when developing new titles. The platform with the larger installed base offers a larger potential pool of adopters for the game, over which the developer may be able to exploit economies of scale in production. Thus, consumers enjoy indirect benefits from a large and diverse set of complements to the core product.

Network industries are the large significant, and often fast-growing part of the world economy. A key network industry is telecommunications, providing voice data services, including the internet and the World Wide Web. Another key industry is computer software and hardware. (Economides, n.d.) These two sectors, telecommunications and computers, have been the engines of fast growth of the world economy. In the news and entertainment sector, network industries include broadcasting and cable television, which in recent years are reaching into traditional telecommunication services.in transportation, networks include airlines, railroads, roads, and shipping and the delivery services that “live” on these such as the postal service and its competitors. In the financial sector, networks include traditional financial exchanges for bonds, equities, derivatives clearing houses, B2B and B2C changes, credit and debit card networks, as well as automated transactions banking network, such as ATM network. (Economides, n.d.)

According to (Economides, n.d.), beside traditional network industries, many of the features of the networks apply to virtual networks. A virtual network is a collection of a compatible goods that share a common technical platform. For example, al VHS video players make up a virtual network. Compatible software and hardware makes a virtual network. More generally, networks are composed of complementary components, so they also encompass wholesale and retail networks, as well as information networks and servers such as, telephone yellow pages, MSN, Google and yahoo. (Economides, n.d.)

In previous years, server virtualization reigned because the primary driving force behind network selection-making via an extensive margin. In truth, almost half (49 percent) of IT professionals stated it as their top initiative in 2016. This is sincerely not the case within the 2018 study, just years later. (Zulch, 2018)

According to EMA, software defined data facilities (SDDCs), public cloud or infrastructure as a carrier (IaaS), and private cloud initiatives are actually the most influential drivers in the back of community control decision-making. This shift makes experience. As these technology upload a number of recent efficiencies and complexities to the community management strategies, organizations would require answers that may offer a holistic, deep view into community performance. (Zulch, 2018)

As community complexity grows, so does the complexity of knowledge and resolving overall performance issues. A single transaction can take a round journey through wireless, stressed out and virtual networks, ending up back at the foundation. Only with visibility into each segment of network transactions as they traverse physical networks, virtualized environments, and the cloud can we effectively discover, troubleshoot and solve network issues, irrespective of their beginning. (Zulch, 2018)

According to (Shapiro, 1994),In systems markets, even more so than in other markets, firms with hooked up reputations, well-known emblem names, and prepared seen get entry to capital have aggressive benefits. These are the companies which can be less possibly to choose an open-device strategy. (Shapiro, 1994)

One might anticipate the promotional strategies identified above for a monopoly community for use quite aggressively in structures opposition. For instance, dramatic penetration pricing might also become the equilibrium final results, as every company seeks to establish a hooked up base and gain management in a systems market. If the final results goes to be considered one of tipping to a single machine, the companies are successfully bidding for destiny monopoly earnings. At the identical time, it is crucial to recognize that simply staring at a firm with a role of market dominance does not suggest that the company is earning first rate regular profits: the firm's quasi-rents may additionally simply replicate costs incurred in advance to gain the placement of market leadership. (Shapiro, 1994). 

Why distinction is important?

Non –network industry is importance of the key distinctions also states in this review, another situation in which consumer coordination is vital arises when consumers must choose durable hardware, as when they purchase a device to play a new format of prerecorded music. In making such a choice, each consumer will have to form expectations about the availability of software (in this example, the availability of recordings in that format). In the presence of economies of scale in the production of software, the availability of software will depend on what other consumers do, which gives rise to positive-feedback effects. This a key distinction of non-network industry. Economical state they also have an impact on the network industry as well. (Shapiro, 1994).

According to (Saxton, G. D. and Wang, L. (2014), social media is important distinction they have new ways of crowdrise offer over new ways for nonprofits and engage in community service in fundraising events. It happens because of the network industry. A social network effect takes precedence over traditional economic explanations. Facebook donors do not seem to care about efficiency ratios, their donations are typically small, and fundraising success is related not to the organization’s financial capacity but to its “Web capacity.” Moreover, online donors are prone to contribute to certain categories of causes more than others, especially those related to health. Given the growth in social media-driven fundraising and the increase in crowd funding, slacktivism, impulse donating, and other new practices this entails these findings carry notable theoretical and practical implications. (Saxton, G. D. and Wang, L. (2014) 

According to (GANDAL, 1992)Another importance key distinction is that software market which has known to be non- network industry, is providing the advantage of the market share but not only that. Technology, but also the number of networks that will exist in equilibrium. If no software is forthcoming, a technology will have no sales in equilibrium and there will be de facto standardization: all consumers will be on the same network. However, if sufficient software is provided for the two platforms, then both technologies will have sales in equilibrium. It is found that the profitability of providing software for a platform depends on two effects. As the number of compatible software products available for a technology increases, the value of the technology is enhanced. This leads to more hardware sales (a larger network), which increases market demand for software and enhances software profitability. (GANDAL, 1992)

 Conclusion

There are several social media networks in the world. As the technology is getting developed day by day, in the network industry it is combined with the social media networks as well. Facebook, Instagram, Linkedin, and Twitter are some of the classic examples of the social media networks which people use mostly to connect with their friends and family. Networking is also has become an economic trend which is also can be used as a marketing trend. There is a key distinction between the network and non- network industry. But these two industries are associated with the technological- oriented environment. Key factors of the network and the non-network industries are clearly stated that, they have become essential routine of the people.

Since the industry has two ways of industry types, there is a major difference between the two network industries. It was clearly stated in the theoretical reviews from different views. As they are differ from each other. But their key factors always expects to the higher market penetration, technology based, economic trend, social media marketing concepts etc. and many more things were carried out in the process of network industry.

Technologies can be different for software and hardware and other network technologies. But their market share, social connections and other sources will be there to handle the network industry. And other major factor is that cellular network industry also has been a vital role in this network industry. Their market share and other factors also very useful to the following written essay.