The winner takes it all—Competitiveness of single nodes in globalized supply networks
Fig 5
Sketch of the effect of a single (new) customer for a node. With the new customer production increases and the production costs per unit decrease by aD (economies of scale). This compensates larger transport costs for nodes further away from the supplier. Consequently, the supplier becomes competitive in a larger range and can potentially attract additional customers. The blue disks indicate the distance that is compensated by the decrease in production costs due to one customer (two customers). (a) For small a, the change in production cost is small and likely has no immediate effect [compare a = 10−4 in Fig 4(a)]. The nodes have to compete at all length scales. (b) For intermediate a, a single customer may reduce the costs sufficiently to cause additional nodes to change their supplier. In this case, nodes have to compete at a local scale until they reach a size sufficiently large to take over the global cluster. (c) For large a, a single customer definitely reduces the costs sufficiently to cause a cascade of purchasing decisions and the first node to attract a customer takes over the whole cluster. Here, only the immediate neighborhood of a node decides about its success [compare a = 1 in Fig 4(a)].