Final answer:
Information technology has been a game changer for businesses, enabling small firms to expand globally while also fostering larger 'winner-take-all' firms like Microsoft and Amazon. Technology enhances product value through increased efficiency, personalization, and new business models, shaping the future of the market.
Step-by-step explanation:
The role of information technology in transforming products and the structure of firms has been a significant point of discussion. Advances in technology have made it possible for small firms to expand their reach beyond local markets into state, national, and international territories. This could suggest a shift towards a market with a multitude of small, yet competitive businesses. Conversely, there is a notion that information and communications technology could lead to winner-take-all markets, where giants like Microsoft and Amazon dominate sales. With such technologies, the management of multiple operations becomes more streamlined, potentially favoring the growth of larger corporations.
When it comes to adding value to products, information technology has played a crucial role in enhancing efficiency, improving customer engagement and personalization, and creating new business models. For example, online bookselling revolutionized by Amazon leverages data to suggest books to users, thereby adding significant value and reshaping the buying experience. Overall, technology is at the heart of product transformation and business growth, influencing economic models, consumer interaction, and the global market landscape.