Virtual enterprise: Benefits and its quantification

Abstract

The time period led to a situation, where the business networking was required by circumstances mainly because virtual enterprises offer their members wider options. The influx of foreign investment and aid from public and European sources goes to attractive regions and potentially profitable area, so it is possible to find a various kind of business networking in European regions where the pursuit to strengthening of traditional industry is. This typical case may be seen throughout the world. What has changed? Globalization shows that competition is gradually converted to the need for cooperation. The essence of business networking functions is the current impact of two strategies - cooperation in a competitive environment; it is a phenomenon that cannot function without strong leadership and mutual trust. Together they create a positive synergy that will help them create value chain with maximum efficiency. Intended purpose of this article is to clarify the possibility of virtual enterprises. Active exploitation of the possibilities offered by a business networking, leads to greater competitiveness of participating companies. Cooperation within a virtual enterprise brings numerous benefits and limitations like any other. This article focuses on the benefits that accrue to the initiator of a virtual enterprise that is connected in this business network and defines the process of their quantification. The aim is to define a process for quantifying the benefits for initiator of the virtual enterprise. Companies that are considering the initiation of virtual enterprise emergence should be aware of the benefits and limitations in order to assess whether it is for them to cooperation within the business network sufficiently beneficial. It is the way to motivate especially Small and Medium Enterprises to improve their competitiveness and efficiency through business networks without having to resort to drastic solutions such as production cuts or employees layoffs. The greatest potential for the exercise in this form of business network is offered for small and medium enterprises which have limited resources, where through involvement in these business networks can help create its own influential market position.