An In-depth Analysis of the Wikinomics Business Model

This report provides a detailed analysis of the Wikinomics business model, focusing on its application and impact, particularly within the FMCG industry. It explores the core principles of Wikinomics, including openness, peering, sharing, and acting globally, highlighting the benefits such as enhanced collaboration and innovation through mass participation. The report also examines potential risks, such as security concerns and challenges in information management. Furthermore, it emphasizes the crucial role of the internet and social technologies in facilitating the Wikinomics model, enabling efficient information sharing and fostering connections with suppliers and customers. The report uses figures and matrices to illustrate concepts like the adoption matrix and the wiki solution ecosystem to show how companies can enhance value creation. The conclusion summarizes the key findings and offers recommendations for effectively implementing the Wikinomics business model in a competitive business environment.

Information technology

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
FINDINGS AND ANALYSIS........................................................................................................1
Benefits of Wikinomics business model......................................................................................2
Risks associated with the use of Wikinomics business model....................................................3
Role of the internet when using the wikinomics business model................................................3
The use of mass collaboration in a wikinomics business environment.......................................5
CONCLUSION AND RECOMMENDATION S...........................................................................7
REFERENCES................................................................................................................................8

LIST OF FIGURES
Figure 1: The main role of Internet and social technologies..........................................................4
Figure 2: Adoption matrix...............................................................................................................6
Figure 3: Wiki Solution Ecosystem.................................................................................................7

INTRODUCTION
In digital era, most of the enterprises are concentrating on effective use of new emerging
technologies in their business functions to attain success and growth. The main aim of the
present report is to provide detail about the concept of wikinomics. In addition, report provides
information about potential risks and/or benefits of the wikinomics business model in FMCG
industry. In order to understand concept of Wikinomics business model, example of the use of
mass collaboration in a wikinomics business environment was taken. Openness, Peering,
Sharing, and Acting Globally are the four major pillars of business model which helps
enterprises in growing very quickly in all over the world. At the end of the study, investigator
would be able to analysis different elements of Wikinomics and role of the internet when
using the wikinomics business model in a significant manner.
FINDINGS AND ANALYSIS
Wikinomics concept: This term is used to explore the effects of extensive collaboration and user-
participation on the marketplace in dynamic changing arena. The mass collaboration term plays
an important role in the context of understanding current trend in business to outsource in a
competitive business environment (Cardoso, 2015). Besides that, for resolving different work
related issues and establishing proper integration between internal business functions to other
business entities, this concept plays a crucial role in FMCG sector.
Principles of Wikinomics: This concept is based on four principles that can be enlisted as
follow.
 Openness: Open standards, content and financial transparency are the major benefits
associated with the use of this principle. In addition, this concept also provides detail
about an open attitude towards external ideas and resources as per the changing business
conditions (Pistoni and Songini, 2015).
 Peering: It is a more collaborative forum that harnesses the collective intelligence of the
investment community. This principle replaces existing hierarchical models of traditional
business practices because it emphasizes on increasing participation of employees in
decision making process.
 Sharing: This term is considered as less proprietary approach and deals with different
business aspects including intellectual property, bandwidth and scientific knowledge
(Palma and Hong, 2014). This principle is beneficial for enterprises in term of sharing of
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large amount of data associated with target consumers. For example, FMCG companies
are generally using this principle to improve efficiency of business and attainment of
corporate goals in an adequate manner (Marjanovic, Fry and Chataway, 2012).
 Acting Globally: This principle of Wikinomics is embracing globalization and ignoring
physical and geographical boundaries to enhance business efficiency and productivity of
an individual employee in competitive arena effectively.
Benefits of Wikinomics business model
Traditionally, most of the enterprises were conducting business meeting by various
approaches such as conference call, even a convention center and meeting room. In such of kind
of situation, wikinomics concept emerges to enhance collaboration between different business
entities. In digital era, the Internet is moving into a new phase and mass collaboration is
encouraging individuals to share information and ideas to grasp better market opportunity
(Cardosoand Pina-Cabral, 2014). It brings flat organizations and open platforms for enterprises
so that can establish better communication to other business entities effectively. For example,
wikis, blogs and social network etc. In modern circumstances, bankers and business leaders are
looking towards solution to the chronic problems undermining the financial services.
Apart from this, by applying this concept, enterprises are able to overcome the gap
between producers and consumers. In addition, it also helps companies to share product related
information and reduces issues related to swap tips, tools and product hacks in a proper way. In
virtual world of dotcoms and software, Wikinomics emerges as a business tool that helps
companies to manage wide range of business operations as per the current market trends and
reduces cost of deregulation (Cummings and et.al., 2013). Even in traditional industries like
FMCG, mass collaboration was applied to enhance innovation and enhancing involvement of
customers in the value creation process in FMCG effectively. But today’s, the new concept
emerges as an important role in creating trust based relationships with external collaborators and
create value more effectively than hierarchically organized businesses (Zhang, Williams and
Polychronakis, 2012). By using this concept, an individual can access authenticate information
from different sources which is continuously up-dated.
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Risks associated with the use of Wikinomics business model
Along with several business advantages, some drawbacks also associated with the
deployment of the Wikinomics in current business practices. The main issues of this model can
be defined as follow.
 Security Issues: Open collaboration with others can create issue related to steal sensitive
information and misused them for illegal purposes.
 Fear, Uncertainty and Doubt: By sharing information openly and establishing
collaboration with anyone can create problem of reducing management control and
success of a specific business plan (Priftis, Bondolfi and Boisselier, 2014).
 Prioritize information: Wikinomics opens new business opportunities for organizations
to share wide amount of information but, due to excessive information, difficulty will be
created for managers to filter and prioritize information as per the business needs
effectively.
 Political and Cultural Issues: Due to different regulations and issues (political and
cultural) which are associated with mass collaboration and sharing information,
enterprises and individual can face problem in sharing information freely (Lee and Kwak,
2011). In addition, improper regulations associated with mass collaboration and joint
decision-making kinds of issues also occurred and affect performance of FMCG business
entities. For example, in China communist political structure is followed and restrictions
are applied on communication media by government regarding to share any kind of
information among society.
Role of the internet when using the wikinomics business model
Earlier, companies were using tradition approaches to collaborate with various companies
like way to one communication, telephone and many more. These techniques were taken more
time and huge amount of cost were also associated with the use of this method. But now, through
the emergence of the internet, it is easy for organizations and individuals to share information. It
also provides business opportunity to establish connection with various suppliers and customers
and meets their expectations effectively (Hu, 2011). In addition, social networking sites provide
opportunity to enterprises to establish communication with their customers in long term
perspective. Apart from this, internet or digital economy helps in supporting infrastructure and e-
commerce applications to carry out day to day business operations in proper way (Aiello, 2014).
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The main role of Internet and social technologies in improving organizational functions can be
understood with the help of below figure.
Figure 1: The main role of Internet and social technologies
(Source: Dobbs and et.al., 2012)
By using internet, companies are able to create a knowledge-based society where
everyone including consumer, employees and suppliers can share information without any
interruption. Internet can help enterprises in creating pool of the talents and experts to solve a
problem or build a public access treasury of information. As compared to traditional information
sharing models, wikinomics business model is more advanced and it emphasizes on effective use
of Internet to improve collaboration within and/or beyond corporate boundaries (Tapscott and
Williams, 2007). Along with this, it also helps companies to break down the essential
relationship between insiders and outsiders and allows specific people to participate in particular
work tasks. In the context of FMCG industry, this business model can bring vast opportunities
through sharing unexpected perspectives, ideas, and connect different knowledge points together
(Mai and Zhang, 2011). Besides that, by using this model, firms can enhance greater flexibility
for the participant’s in terms of time management and contribute to problem-solving, solutions in
the modern world.
Apart from this, Crowdsourcing approach can be employed to establish good
relationships with consumer, employees and suppliers in fast moving consumer goods industry.
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Through using information technology such as internet, web services and enterprise 2.0 kinds of
tools etc., companies can assess contact details of different suppliers and meets the business
objectives within stipulated time (Lee, 2013). Despite of that, combination of distributed
networks and inexpensive digital tools can also be helpful for organizations in order to facilitate
wide range of open source software and services without spending so much amount of cost. In
this regard, Open source software can be beneficial for organizations because it is freely
available and efficient in term developing public collaboration (Norman and et.al., 2011). FMCG
enterprises can acquire wide range software through internet and promotes their products to wide
community without any interruption in a quick manner as per the distinct business needs.
The use of mass collaboration in a wikinomics business environment
In FMCG sector, Mass collaboration is encouraging companies to increase awareness
among customers and share information and ideas in a quick way. Many companies of UK like
Mondi and SABMiller etc. are using this mass collaboration concept which allows their
customers to post a blog on a topic of their interest and edit an entry in Wikipedia. They allow
them to post a video on you-tube and post a picture on Flickr to increase involvement of
customers in the value creation process in the virtual world (Zhanga, Lichtensteina and Ganderb,
2015). In this regard, Amazon can also be taken which had created Amazon Mechanical Turk
online platform where users can express their ideas about products and services offer by
company to them in the virtual world.
After collecting comments of users, firm incorporates the answers into their software
applications to understand their views and attain different business objectives effectively.
Besides that, enterprise also uses artificial intelligence and web 2.0 techniques on the web site to
collect responses and solves any queries properly. Mass collaboration within wikinomics
business environment can be understood with taking example of GlodCorp, which was facing
several difficulties in its business such as lingering debts, locating gold and high production
costs. In the context of reducing such kind of issues, enterprise was uploaded several years of
data and find gold against the prize (Dobbs and et.al., 2012). The positive impact of this model
can be seen in form of assessing competitive advantage over other companies and establish
relationships with various other suppliers and individuals as per the distinct business
requirements. Apart from this, for increasing innovation in processes and spread wide range of
data associated with the business objectives, this approach can be beneficial for companies. With
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help of Adoption matrix, wikinomics and mass collaboration can be mapped in a two
dimensional matrix.
Figure 2: Adoption matrix
(Source: Ariyur and et.al., 2008)
The mastery dimension of matrix emphasizes on realizing the benefit and ability
dimension concentrates on understanding technical aspects of the package. On the other side,
awareness concepts concentrate on knowledge of the solution as a concept in the digital world.
However, different types of barriers such as time available to contribute, knowing what to
contribute and learning new tools are also associated with the implementation of this matrix. In
this regard, collaborative systems and coordination and cooperation between large numbers of
people are required to assess more external support and competitive advantages effectively (Lee,
2013). By considering this matrix, FMCG companies would be able to enhance an individual and
group progress in a proper way. In the serial paradigm era, managing a long linear product
development process and strengthening the value chain, enterprises can also adopt Wiki Solution
Ecosystem to speed up and maximize value creation (Aiello, 2014). By using this model,
enterprises would be able to better respond in a timely way to customer needs and speed up and
maximize value creation in a proper way.
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Figure 3: Wiki Solution Ecosystem
(Source: Ariyur and et.al., 2008)
CONCLUSION AND RECOMMENDATION S
On the basis of present essay, it can be concluded that Wikinomics and Internet play an
important role in terms of handling of mass collaboration culture and executing business
operations in a significant manner. By applying the principles of business model including
Openness, Peering, Sharing, and Acting Globally, enterprises would be able to establish better
communication with other business entities and increases participation of employees in decision
making process effectively.
After evaluates different aspects of Wikinomics, it is suggested that FMCG companies
should have to carry out security, privacy and transparency concepts while information is
generated from different sources. In this regard, it is necessary for management of enterprise to
apply innovative tools with maintaining reliability and authenticity in information gathering and
sharing (Hu, 2011). By considering security measures and intellectual property act, management
of companies can be able to attain competitive edge over other companies and improving
decision making process effectively.
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