A machine bureaucracy is a knowledge-based organization where goods and services depend on the expertise and knowledge of professionals

Low number of customers

Product differentiation

New market entrants

Traditional competitors

Low number of suppliers

Divisionalized bureaucracies

Professional bureaucracies

Machine bureaucracies

Entrepreneurial structures

Adhocracies

To create synergies with its suppliers

To estimate each guest's profitability and give additional privileges to profitable customers

To lower its operating costs

To take advantage of network economics

To benchmark its progress against competitors

Business processes

Environments

Politics

Culture

Structure

Creating new opportunities for building loyal customer bases

Enabling the development of new services

Lowering transaction costs

Making information available to everyone

Making more products available

It helps reduce internal management costs

It helps reduce transaction costs

It helps reduce agency costs

It helps firms expand in size

It helps firms lower the cost of market participation

Value webs operate in a less linear fashion than traditional value chains

Value webs involve highly synchronized industry value chains

Value webs involve a collection of independent firms that use information technology to coordinate their value chains

Value webs are inflexible and cannot adapt quickly to changes in supply and demand

Value webs are more customer-driven than traditional value chains

A clothes manufacturer expanding its offerings to new styles

A department store creating specialized products for preferred customers

A bookseller selling an e-book reader that reads only the bookseller's books

A restaurant chain analyzing local sales figures to determine which menu items to serve

A car manufacturer's website that lets you customize the features on the car you are purchasing

Network economics model

Demand control model

Competitive advantage model

Agency costs model

Competitive forces model