Network effects of increasing the competitiveness potential of business models of trade enterprises

Abstract

The purpose of the article is to theoretically generalize and substantiate the mechanisms through which network effects increase the competitiveness potential of business models of trade enterprises, as well as to form practical guidelines for managing these effects. The object of the study is business models of trade enterprises that are formed in the environment of network interactions between customers, partners, suppliers and digital channels. The article reveals the role of network effects in increasing the competitiveness potential of business models of trade enterprises in the context of platformization of trade, omnichannel sales and increasing the value of data as a management resource. The content of the network effect for the sphere of trade is defined as the increase in utility, trust and convenience for customers and partners, which is formed with an increase in the number of participants and the density of interactions, in particular through recommendations, reviews, ratings, user-generated content, as well as through the accumulation of data on demand and behavior. Direct network effects are characterized, when the growth of the customer base enhances the value for other customers, and indirect network effects, when the expansion of one group of participants increases the attractiveness for another group, for example, buyers and sellers in multi-party models. It is established that the highest increase in value occurs when the enterprise transforms individual transactions into a managed ecosystem of services, including logistics, returns, support, personalization and loyalty programs, which mutually reinforce repeat purchases and organic engagement. It is proven that the competitive advantage in such logic is based on the effect of accumulating trust and reducing the costs of engagement through recommendations and reputation mechanisms. The need to combine network scaling with quality control is justified, since uncontrolled growth generates negative network effects, including support overload, a drop in delivery quality, an increase in the share of unscrupulous sellers, and information noise in reviews.