What is the Keiretsu Concept in E-commerce?
Keiretsu in e-commerce is a Japanese model of intercompany collaboration that enables a network of companies to cooperate to create a competitive advantage. It involves a series of relationships between companies that are mutually beneficial and create a symbiotic
relationship.
Significance of Keiretsu Concept in E-commerce
Keiretsu is an important tool in e-commerce, as it helps to facilitate collaboration between businesses and create a more efficient and effective marketplace. The benefits of using Keiretsu include the following –
- Companies can benefit from economies of scale, increased access to resources, reduced marketplace fragmentation, and improved customer service by creating a network of businesses.
- It can provide a more secure platform for conducting business online, which is especially important in the digital age.
- Keiretsu allows businesses to form strategic alliances and partnerships, and it can help eliminate the need for costly mediators and create economies of scale.
- It can reduce risk, as businesses can share resources and expertise. This can result in reduced costs, improved quality, and customer service.
Prerequisites to Calculate Keiretsu and How It Works
The prerequisites cover –
1. Knowledge of the financial relationships between two or more companies
2. Understanding of the business structure
3. Knowledge of the market
4. Understanding of industry trends
5. Ability to analyze data
Once all the necessary information is available, the next step is calculating the Keiretsu. This is done by adding up the total ownership stake held by each company and then dividing it by the total number of companies involved. This will give a percentage representing the Keiretsu.
Use Case With Keiretsu Concept
Suppose a company XYZ wishes to establish a stable and long-term partnership. They can incorporate Keiretsu concepts into their company to create a powerful online presence. By leveraging the collective strength of a network of companies, the overall strength of the network gets greater than the sum of its parts.