Internet Studies

New technologies keep changing business plans so our business plan should be clear, concise and well thought out plan in a dynamic changing market.

“Thus, many … were particularly concerned with leadership, people problems and team spirit.” - Many times your project success–traditional or e-business–depends on the leader and how he/she leads their team. It’s all basically human management or “psychological methods of people manipulation.”

In a traditional business, managed teams are limited by physical, geographic locations. This is different on the web. And we now enter the age of un-managed teams.

“If you can find a way to explain how you will control project costs using a bottom-up approach then it would be easy to convince not only entrepreneurs but big corporations also.”

“…the chasm between Industrial Age thinking and Information Age thinking…How will you control project costs using a bottom-up approach?…you needn’t worry about monitoring and controlling costs with the Information Age solution.”

I just understood that because your production costs are minimal with digital media.

A paradox: “You control the costs in an Information Age solution by not controlling the costs.”

And another:

“…Industrial Age projects have a reasonably predicable environment to work in. There may be constant change…intense competition but systems are designed to work within a known or estimated range of predictability where there are adequate tools, techniques and methods to cope with the variables….In the Information Age, chaotic and disruptive changes cannot be avoided; they are the norm rather than the exception.”

So, how can you have solid plans when the environment constantly changing and is dynamic?

And one last quote:

“In the fast-changing chaotic environment of the Internet, the controlled and regulated systems of the Industrial Age are like the Titanic.”

They will sink if they are not ready for the changes.

Resource:

Small, P., (2000), The Entrepreneurial Web: First, think like an e-business. Great Britain: Pearson Education. (pp 246-251)

No comments

The Internet allows quicker feedback on experiments with specific strategies in a very controllable market segments. With e-business, a very high market transparency exists. Everything happens quicker, with higher quality and bigger transparency.

Market Analysis Questions:

• Who are your competitors?
• What’s their value proposition?
• How fierce is their competition?
• Regions
• Languages
• Multimedia
• Partners
• Customer interaction or self-service
• Cost structure
• What market segment?
• How big are they?
• What’s their marketing budget?
• Strengths/Weaknesses
• How do they differ?
• Approach: “Me Too” or are we going to provide an improved value proposition?

Analysis of the various dimensions of the competition:

• Communication Speed—Check if the competitor is faster, more convenient or more complete
• Costs—direct sales can eliminate the middle man and his commission. If the competitor’s structure is leaner, copy his approach or improve it to make efficiency gains
• Freebies—before you offer anything for free, there should be a good idea of how to generate revenues
• Changing boundaries—if you can join them as allies instead of competing with them to expand the network and contribute to your propositions.

Positioning

• Specific and focused presentation
• Immediate confirmation and sometimes immediate delivery
• Quality offering and flexibility
• Specific added-value services
• Targeted loyalty programs
• Speed, convenience and price

Gaining Market Share by using Internet Tools

• Search engines registrations and techniques
• Mailing lists and offers
• Free Offerings
• Infotainment

Compiling competitive data:

Top-down approach: refer to publicly available information and pragmatically pick the available data that comes closest to your needs.
Bottom-up approach: focus on a small number of direct competitors and estimate their market share.

“Initially, a one- or two-year planning should be sufficient” and try to “get big fast”

Market Position:

Pioneer/Leader vs. Follower
Market Leader—you should anticipate how much it takes a competitor to build up a similar organisation…you either have to have the next improvement to your own offering ready or your margins will be under pressure.
Follower—you can build on the experiences of the first player…avoid some of his mistakes…with a clear focus on expenditures, costs and streamlined back office processes. And you need to be ready for price fights.

Points to consider:

• Languages
• Legal requirements
• Payment habits
• Permanent risk assessment
• Continuous business re-design for higher effectiveness and better convenience
• Be pro-active and drive your innovations based on your strengths

A price fight: streamline your operation…but if you are proactive in making your sales and production more and more effective, you have reserves you can use once a competitor challenges you.

…it doesn’t pay off to fight competition everywhere.

Marketing Mix

• Differentiate yourself from the competition—have few solid selling points
• Decide whether a quality leader or a price leader
• Test your story with some prospects
• Pilot a small test market
• Ask your customers

Maintain Awareness

• Encourage risk identification
• Implement loyalty—“Gold Club Members Only”—allow only your good customers to access some specific added value information
• Perform regular assessment of the competitors

Resource:

Morath, P. (2000). Chapter 5 “Know your competitor” in Success @ e-business: profitable internet business and commerce. London: McGraw-Hill. (pp 79-96)

No comments

Questions to ask:

• Customer service and future needs - does it meet customer’s needs for today and tomorrow
• Value proposition - what capabilities needed to create rich experiences?
• Resources - internal or outsource?
• Organisation structure
• Function or process oriented?
• Selling method - sales force, reseller or direct sales?
• Distribution channels
• How do we go once we decided?

Roadmap Steps

1. Self Diagnosis
   • New ways to do business?
   • Be aware of changing customer expectation
   • Challenge industry assumptions to create innovative product
   • Is the plan flexible and adaptive enough under current market conditions?
   • Can we get low operating costs while making complex applications?
2. Reversing the Value Chain—by understanding customer needs and making them a priority. Decide what they need and then make it happen. “In an outside-in approach, the strategy revolves around the customer.”
3. Choosing a Narrow Focus—choose excellence among the following:
   • Service—to give superior value to a small niche market and making a concerted effort to serve them well. Trying to anticipate target customer’s needs.
     Strive for: Self-service, relationship marketing and value
   • Operations—quick, error-free and cheap.
     Strive for: customised solutions, outsourcing and process effectiveness.
     Key principles:
     • Efficient use of resources
     • Speedy transactions
     • Sales intelligence - know what’s selling
     • Monitoring all processes
     • Meeting customer expectations
   • Continuous Innovation—push performance boundaries. Results in product leadership.
     Strive for: culture of innovation, market education and constantly delight the customer.
     Key principles:
     • Risk oriented
     • Acquisition of new products (example: Google and Yahoo!)
     • Educating the market/users
     • Reward experimentation (example: Google)

“…established firms can be early adopters and compete successfully with small, fast-moving innovators.”

Sounds like the writers are on the big firms’ side. I would rewrite it to:
Small and big companies can compete successfully by being early innovators.

The Internet and within it e-business = “…the biggest stories in modern times: the transformation of society.”

I liked that sentence:

“…in its heyday refused to believe consumers would prefer air transportation to railcars.”

Without getting into the debate of Microsoft vs. Apple, I believe it is Apple that tries to understand what the customers’ needs and then Microsoft copies Apple inventions.
But in regards to word and office applications, Microsoft have won the battle with other competitors are not even close to its market share and reach.
But anyway …

“The creation of an e-business is inextricably linked to the management of change.”

Resource:

Kalakota, R., Robinson, M., (1999), e-Business, Roadmap for Success, Addison-Wesley

No comments