Directly owning and managing every aspect of its product or service end-to-end, together with all the ancillary services, the complete company has been steadily eroded over the last forty years. The concept of the hollow company, if not the reality, is of a similar age. The development of e-business has accelerated the transition from one to the other and encouraged the wide use of a newer label, the virtual company. Professor Garelli of Lausanne University summed it up at a conference on Global Resourcing as 'access not ownership'. We are moving from a world where the aim was to accumulate assets to one where the aim becomes to access assets, not to own business channels, but to access them.
A true virtual company has limited tangible assets and few, if any, staff. Entry costs for entrepreneurs are low. Facing no geographic boundaries and not recognising a nine to five day, it automates the mundane and celebrates creativity. Its primary strength is its intellectual capital and its capacity to operate is based on a complex and continuously changing network of allies. For example Monorail Inc. in Georgia, USA was set up as a computer manufacturer with no factories, warehouses, help desks or call centres. It was founded on the principle that, competitively, business models are more important than products. Other examples are Dell's direct to the customer model, Compaq's dealer network and Gateway 2000's" targeting of first time buyers. Monorail treated computers as fashion products - a concept that will increasingly apply to many other, traditionally more measured, purchasing decisions such as cars or even mortgages. Their focus was on process, starting at the retail interface with customers. An order goes to a contract manufacturer, working from a Monorail-specified parts inventory, who ships direct to the retailer to arrive within a few days of the original order, while another partner handles customer billing and credit approval. Partners also handle subsequent help desk and upgrade requirements. For this virtual company its only core resources are the experience of its senior executive team and its capacity to build and maintain partnerships.
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