Internet Entrepreneur’s Innovative Reshaping Industrial Organization

Since the 1990s, with the rapid development of communication technology, especially the Internet application and popularity worldwide launched a huge transformation, is another wave of innovation after agricultural revolution and industrial revolution. The impact of the Internet on society and the economy is unprecedented, this effect has caused tremendous economic and social changes in the macro-level and micro level, so that the competitive environment filled with huge variables. Purpose of this paper is to discuss how companies can maintain sustainable competitive advantage and Internet entrepreneur plays role of innovation in the enterprise development process and the reshaping of the industry organization formed in the era of the Internet economy. This article select Internet entrepreneur innovation perspective to research the remodeling mechanism of industrial organization, trying to explain the entrepreneur is the driving force and the main innovation of the market, innovative entrepreneurs can reshape the industry organization.Based on the theory of scale economy theory, transaction cost theory and the theory of network externalities, the Internet entrepreneur’s product innovation, market innovation and organizational innovation combine to illustrate remodeling mechanism of industrial organization. First, from the beginning of product innovation, product innovation is the first step in Internet entrepreneur innovation, provides a network platform for future innovation, and opens up the pattern of market innovation. The second step is to market innovation, Internet entrepreneurs in order to adapt to the special economic laws in internet era and then aimed at expanding the size of the market, companies only in subscribers exceeded the critical point and then to achieve a positive feedback effect when the network can generate revenue. The third step of the innovation organization is the former two innovations to further deepen, and relations between enterprises from the traditional vertical or horizontal relationship to a business ecosystem which many SMEs around the core enterprise and get collaborative development, such a business ecosystem is made up of several related businesses and organizations which in breaking the geographical location of the link with the Internet and becoming complementary advantages and resources can be shared, and under the premise of saving transaction costs have a functional part of the market, the formation of an alternative on the market to some extent.Business ecosystem through its impact on organizational relationships between enterprises and market structure caused a remodeling of the entire industry organization. Inter-organizational relationships in the ecosystem no longer confined to the relationship between horizontal or vertical relationship, and each is incorporated into the ecosystem of companies have a clear position and role in the ecosystem while generating synergies can play to their competitive advantage formation overall competitiveness ecosystem. In addition, the emergence of an ecosystem make Internet giants across a number of different industries, to form a single oligopolistic market structures utilizing overall service differentiation. Such a market structure is a breakthrough to traditional industrial organization theory and four classic theory of market structure has not effectively explain this market phenomenon. Therefore, this article from the perspective of internet entrepreneur innovation analysis the business ecosystem remodeling mechanism of industrial organization, and certainly the market value of the business ecosystem.Finally, this paper with the case of Alibaba Group’s, from the perspective of the Internet platform innovation to analyse business ecosystem of Alibaba’s remodeling mechanism on e-commerce industry, which confirms the point of view of this paper, and make relevant policy recommendations.