{"id":1584,"date":"2018-03-26T12:24:10","date_gmt":"2018-03-26T12:24:10","guid":{"rendered":"http:\/\/mitmgmtfaculty.mit.edu\/jsterman\/?page_id=1584"},"modified":"2018-04-05T13:45:15","modified_gmt":"2018-04-05T13:45:15","slug":"limitstogrowth","status":"publish","type":"page","link":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/","title":{"rendered":""},"content":{"rendered":"<div id=\"pl-1584\"  class=\"panel-layout\" ><div id=\"pg-1584-0\"  class=\"panel-grid panel-no-style\" ><div id=\"pgc-1584-0-0\"  class=\"panel-grid-cell\" ><div id=\"panel-1584-0-0-0\" class=\"so-panel widget widget_mit-pf-wysiwyg widget_mit_pf_wysiwyg panel-first-child\" data-index=\"0\" ><h2 class=\"widget-title\">Limits to Growth in the New Economy: Exploring the &#8220;Get Big Fast&#8221; Strategy in e-commerce<\/h2><div class=\"textwidget\"><div>\n<p>R. Oliva, J. D. Sterman and M. Giese (2003) Limits to Growth in the New Economy: Exploring the \"Get Big Fast\" Strategy in e-commerce.\u00a0<em>System Dynamics Review<\/em>, 19, 83-117.<\/p>\n<p>DOI:\u00a0http:\/\/doi.org\/10.1002\/sdr.271<\/p>\n<p><strong>Abstract<\/strong><\/p>\n<\/div>\n<div>\n<p>Many ebusinesses have pursued a 'get big fast' (GBF) strategy, pricing low and marketing heavily to build their user base, in the belief that there were significant sources of increasing returns favoring early entrants and large players. Until early 2000 the capital markets rewarded the GBF strategy, but since then market values have collapsed and scores of new economy firms have failed. The rise and fall of the dot coms is not merely a case of a speculative bubble. Many firms stumbled when they grew so rapidly that they were unable to fulfill orders or provide quality service. GBF proponents focus on the positive feedbacks that create increasing returns and favor aggressive firms, but have not paid adequate attention to the negative feedbacks that can limit growth, e.g., service quality erosion. The faster a firm grows, the stronger these negative feedbacks may be. We address these issues with a formal dynamic model of competition among online and click-and-mortar companies in B2C e-commerce. The model endogenously generates demand, market share, service quality, employee skill and retention, content creation, market valuation, and other key variables. The model is calibrated to the online book market and Amazon.com as a test case. We explore growth strategies for e-commerce firms and their sustainability under different scenarios for customer, competitor, and capital market behavior.<\/p>\n<ul>\n<li><span style=\"text-decoration: underline;\">For Access to This Paper<\/span>\u2014If you are a student or faculty at another institution and would like a final copy of this paper, please email my assistant Jocelyn using the button below. Jocelyn will send you a final version of the paper <strong>for your personal use only.<\/strong> When emailing, please include the title and DOI number of the paper you are requesting.<\/li>\n<li><a href=\"https:\/\/www.dropbox.com\/s\/y0nw370f1y3igkn\/Sterman-JN-2003-Limits-to-Growth.zip?dl=1\" rel=\"noopener\"><span style=\"text-decoration: underline;\">Download Model [Vensim]<\/span><\/a><\/li>\n<li><a href=\"https:\/\/www.dropbox.com\/s\/4fwayxdymwngksr\/Sterman-JN-2003_documentation.html?dl=1\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline;\">Download Technical Documentation of Model<\/span><\/a><\/li>\n<\/ul>\n<\/div>\n<\/div><\/div><div id=\"panel-1584-0-0-1\" class=\"so-panel widget widget_mit_social_widget panel-last-child\" data-index=\"1\" ><h2 class=\"widget-title widget-title--eyebrow\">Request a final version of this paper<\/h2><ul class=\"social\"><li><a href=\"mailto:jcliment@mit.edu\" target=\"_blank\" class=\"vcex-social-link social-link-email\"  title=\"Email\"><span class=\"fa fa-envelope\"><\/span><\/a><\/li><\/ul><\/div><\/div><\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>Limits to Growth in the New Economy: Exploring the &#8220;Get Big Fast&#8221; Strategy in e-commerce R. Oliva, J. D. Sterman and M. Giese (2003) Limits to Growth in the New Economy: Exploring the &#8220;Get Big Fast&#8221; Strategy in e-commerce.\u00a0System Dynamics Review, 19, 83-117. DOI:\u00a0http:\/\/doi.org\/10.1002\/sdr.271 Abstract Many ebusinesses have pursued a &#8216;get big fast&#8217; (GBF) strategy, [&hellip;]<\/p>\n","protected":false},"author":126,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"class_list":["post-1584","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.0 (Yoast SEO v25.8) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>- John Sterman<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:description\" content=\"Limits to Growth in the New Economy: Exploring the &#8220;Get Big Fast&#8221; Strategy in e-commerce R. Oliva, J. D. Sterman and M. Giese (2003) Limits to Growth in the New Economy: Exploring the &quot;Get Big Fast&quot; Strategy in e-commerce.\u00a0System Dynamics Review, 19, 83-117. DOI:\u00a0http:\/\/doi.org\/10.1002\/sdr.271 Abstract Many ebusinesses have pursued a &#039;get big fast&#039; (GBF) strategy, [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/\" \/>\n<meta property=\"og:site_name\" content=\"John Sterman\" \/>\n<meta property=\"article:modified_time\" content=\"2018-04-05T13:45:15+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/\",\"url\":\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/\",\"name\":\"- John Sterman\",\"isPartOf\":{\"@id\":\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/#website\"},\"datePublished\":\"2018-03-26T12:24:10+00:00\",\"dateModified\":\"2018-04-05T13:45:15+00:00\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/#website\",\"url\":\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/\",\"name\":\"John Sterman\",\"description\":\"MIT Personal Faculty\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"- John Sterman","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/","og_locale":"en_US","og_type":"article","og_description":"Limits to Growth in the New Economy: Exploring the &#8220;Get Big Fast&#8221; Strategy in e-commerce R. Oliva, J. D. Sterman and M. Giese (2003) Limits to Growth in the New Economy: Exploring the \"Get Big Fast\" Strategy in e-commerce.\u00a0System Dynamics Review, 19, 83-117. DOI:\u00a0http:\/\/doi.org\/10.1002\/sdr.271 Abstract Many ebusinesses have pursued a 'get big fast' (GBF) strategy, [&hellip;]","og_url":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/","og_site_name":"John Sterman","article_modified_time":"2018-04-05T13:45:15+00:00","twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/","url":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/","name":"- John Sterman","isPartOf":{"@id":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/#website"},"datePublished":"2018-03-26T12:24:10+00:00","dateModified":"2018-04-05T13:45:15+00:00","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/limitstogrowth\/"]}]},{"@type":"WebSite","@id":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/#website","url":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/","name":"John Sterman","description":"MIT Personal Faculty","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/pages\/1584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/users\/126"}],"replies":[{"embeddable":true,"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/comments?post=1584"}],"version-history":[{"count":19,"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/pages\/1584\/revisions"}],"predecessor-version":[{"id":3026,"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/pages\/1584\/revisions\/3026"}],"wp:attachment":[{"href":"https:\/\/mitmgmtfaculty.mit.edu\/jsterman\/wp-json\/wp\/v2\/media?parent=1584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}