3 Tips for Preserving Company Knowledge

Do you have an employee with an ambiguous job title? Think of someone who has been with the company for countless years and does a great job, even if you are unsure of what they do. Now imagine losing that employee.

Many companies exist in this kind of limbo-stage, where they are highly reliant on a specific employee, but don’t fully understand their entire job purpose until the employee retires or moves on. As an employer, it is critical that you identify the qualities and tasks put on these employees before you lose them. Continue reading “3 Tips for Preserving Company Knowledge”

Making the Right Energy Choices Can Benefit Your Business

Whether you’re looking to benefit your company’s bottom line or your overall image, energy and the choices you make pertaining to its use and generation can make a big impact. There are a lot of things businesses can do to be smart about energy use, especially when you consider that most businesses use a lot of energy in comparison to a single residence.

Everything from embracing green energy solutions to conservation programs can help drive down your expenses each month, and you might get some added PR if you let people know what you’re doing.

Start with a conservative mindset

The easiest way to make an impact on your energy expenses each month is to institute a conservation plan. It can be as simple as leaving lights off in areas of the building that aren’t constantly in use, or as aggressive as keeping the air conditioning system a few degrees warmer in the summer. You don’t want to generate a mutiny from your employees, but a few new policies that are easy to follow won’t create too much of a stir.

This conservation can even spread to other areas of the business. Are you using a lot of paper on a daily basis? Maybe it’s time to switch to an all email system for memos. Are you providing Styrofoam cups in the break room? Encourage your employees to bring in their own ceramic mugs to cut down on waste. No matter how small a conservation project is, it will add up.

Consider pursuing green energy solutions

Is your business in an area with a deregulated energy market? If so, going green is easier than you think. Sites like www.texaselectricityproviders.com make it simple to find energy suppliers that offer green energy options. Even if you aren’t located in a deregulated market, there are ways to embrace green energy solutions.

Thanks in part to how affordable green energy technology is today, there are many businesses across the country that lease green energy infrastructure. Depending on the size of your operation, leasing equipment may be more viable than purchasing your own solar array but either way, having onsite infrastructure is a big step.

Onsite green energy infrastructure means that you’ll be actively reducing your business’ energy bills each month, usually at a rate that will allow your investment in the technology to pay for itself within a few years. In terms of PR, having a solar array visible gives your company a bragging point. It shows that you care about your impact, and you’re smart enough to save yourself money on the energy you know your company is going to use. Just think about it.

Other ways to promote energy conservation

If the majority of your workforce drives each day, consider incentivizing the closest parking spots. Designate the best spots for those who carpool or drive hybrid cars. You could even further encourage carpooling by creating a bulletin board where employees can find rideshare opportunities across the business.

In the end, controlling your business’ energy consumption is one of the easiest ways to make a significant impact on your bottom line, and the public’s perception of your company. Consider implementing some of these suggestions, but know that there are plenty of other ways to achieve the same goal.

Comparison of Business Strategy Frameworks

Strategic management literature has established multiple popular frameworks which are used by decision makers to develop a roadmap for business strategy. Some of the popular frameworks for business strategy are Porter’s 5 forces model, BCG / GE McKinsey MatrixPEST analysis and the Ansoff Matrix. However, all these frameworks focus on factors which are external to the firm. In this article, however, we focus on the frameworks which are a mix of the external view of the macro-environment and the internal view of the strengths and weaknesses existing within the firm, namely the Industry Structure view, the Resource based view and the Relational view of the firm.

The Industrial Structure view is somewhat more macro-industry focused. It postulates that firms operate in an environment of competitive forces of rivalry and forces involving barrier of entry (even exit). In general industry structure refers to the distribution of firms in an industry. The existence of a large number of firms in an industry both reduces and increases opportunities for coordination among firms in the industry. Depending on the degree of consolidation or fragmentation in the industry, the macro-economical dynamics affect the firm’s competency in how it deals with the forces of competition.

In contrast, the Resource based view is somewhat more internal focused. It stresses that the competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the firm’s disposal. To transform a short-run of competitive advantage for a firm to a sustained competitive advantage is like winning both the battle and the war. It requires creation of resources which are heterogeneous in nature and not perfectly mobile across competing firms. This again translates into the fact that the value of these resources arise from the criticality that they are neither perfectly imitable nor substitutable without great effort.

Similarly, the Relational view is a theory for considering networks and dyads of firms interlinked within the daily intercourse of business transactions, as the unit of analysis to study and frame strategies for sustainable competitive advantage. The relational view argues that idiosyncratic inter-organizational linkages are the sources of competitive advantage, whereby relationships play a major role in development and exploitation of competencies in an industry that is traditionally highly competitive.

In the next diagram, a comparative analysis of these important theories has been presented., which present how these theories are not only different, but also complement each other by taking a different lens to view the competitive landscape for a strategic decision maker.

Do let us know, if you have any query regarding more details on this article. We value the feedback from our readers very highly.

BSC – The Balanced Scorecard

The Balanced Scorecard (BSC) is a framework for strategic management, used to monitor and align performance of an organization or a division of the same. It is a semi-standard yet more or less structured report, supported by some established design methods and tools, that can be used by management executives to keep track of the execution of plans / assignments by the staff within their control and to evaluate the possible consequences arising from the execution of these plans. Introduced by Robert Kaplan (Harvard Business School) and popularized by Bain & Company, the Balanced Scorecard has become one of the most popular frameworks for project monitoring and management and align the same to the vision and mission of the organization, be it an industrial, government, or nonprofit organization.

Ref: Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System”, 1996, Harvard Business Review, Vol. 76.

Balanced_Scorecard

There are 4  major process that needs to be balanced in BSC:

  1. The Learning & Growth process
  2. The Business process
  3. The Customer process
  4. The Financial process

The learning and growth process involves all the plans and programs an organization or a department is undertaking in terms of training and development related to both individual and corporate self-improvement. It extends the concept that in a knowledge based organization,people or the human resource is the most critical resource to organizational development.  This section posits the use of metrics to evaluate performance, progress and development of the human resources of an organization.

The Business Process takes into consideration to develop metrics to measure the performance of the internal processes of an organization. It helps to map development in process efficiencies with incremental changes in internal processes. Process management metrics and workflow management metrics are used in this process to evaluate performance vis-a-vis improvements. Incremental improvements the the processes in terms of meeting targets (say process efficiencies) are measured and how the implementation of plans to meet such targets were conducted, is scrutinized in this process.

The customer process takes into account the philosophy of customer orientation in an organization. In current times, there has been an increasing realization of the importance of customer focus and customer satisfaction in any business. The focus in this process is predominantly Customer Lifetime Value management and in the next stage, harness the Customer’s network value. Incremental improvements in each objectives in terms of meeting targets is measured and how the implementation to meet such targets were planned, is scrutinized in this process.

The financial process is another crucial dimension in the BSC. Although managers using the BSC do not have to rely solely on short-term financial measures as the most important indicators of the division’s performance, financial measures are none the less, extremely relevant and are often recognized as the most critical process by many practitioners. Measures such as financial ratios, total revenue from sales, total cost, cost structure improvements, and indirect sources of revenue are scrutinized against their targets, in this process.

These processes are mapped against each other to check how the organizational vision and mission are being adhered to within a division while implementing ploys and strategies. These help in providing a way to construct a concrete step-by-step path of development for the executives of a division or of an organization.

However, the limitation of the Balanced Scorecard is that it has been severely criticized by scholars  for its inability to link a company’s long-term strategy with its short-term ploy. It has become overused in many organizations, sometime not in the most desirable way, as it was conceived when developed.

 

industry, government, and nonprofit organizations

PEST Analysis

PEST analysis stands for “Political, Economic, Social, and Technological analysis“. It is a framework for Strategic analysis of markets to evaluate macro-environmental factors used in the environmental scanning component. Some analysts add the Legal factors to the analysis.

Thus when the PEST analysis is expanded to incorporate legal and environmental factors; this is called a PESTLE analysis or a PESTEL analysis.

  • Political factors pertain to how the government intervenes in the economic functioning of the country (market) and more specifically how it affects the firm strategic decision making. Political factors such as tariffs, tax policy, labor laws, trade restrictions,environmental law, and political stability. Political stability is a major factor which affect the firm’s strategic decision making and overall legal framework.
  • Economic factors consists of interest rates, government bond rates, risk free rate of interest, economic growth, inflation rate (adjusted) and exchange rates.  These factors have major impacts on how a firm can operate in a market. Inflation rate and potential GDP affect the demand and prices of goods.
  • Social factors include the cultural dimensions of the population in which the firm will operate and include gender consciousness, gender based product/service bias, population growth rate, age spread, health consciousness, career attitudes and risk appetite of the target segment.
  • Technological factors consists of factors such as research and development focus in general industries, intellectual property protection laws, technology adoption rates, change assimilation culture, automation and the rate of technological change. They affect entry barriers, technology enabled products and service assimilation,  product prices, quality, and innovation.
  • Environmental factors consists of factors like ecological and environmental aspects such as forestry  and  climatic conditions which may especially affect industries such as tourism, farming, and insurance.
  • Legal factors focus on discrimination laws, intellectual property protection laws, labor laws, consumer laws, antitrust laws, employment laws, health laws, safety laws and social security laws which can affect how a firm operates, its bottom-line (cost structure) and the demand and distribution for its products and services.

The PEST framework has been recognized as an extremely popular framework for market analysis. It is a part of the external analysis conducted while demonstrating an in-depth strategic analysis during new market entry or doing market research for a new product launch or even sometimes during a product extension, and gives an overview of the different macroenvironmental factors that the company has to take into consideration. It is a useful theoretical tool for estimating market growth or decline, business position, potential and direction for operations.

It is an important complementary extension of the Marketing Mix strategies and often it is used as an alternative analytical tool for Porter’s 5 forces model (although not appropriate for the same).

 

Services marketing strategy

Typically marketing of services is done following the services marketing mix using the 7 Ps framework unlike the marketing of products for which the marketing mix involves the 4 Ps framework. Today, marketing has evolved over time into a discipline of its own. Over time marketing managers have realized the sustainability of pull marketing than the traditional approach of push marketing strategies.

The initial movement in marketing strategies was from a direct marketing scenario to brand marketing. In direct marketing, the marketing managers typically had a role of sales managers and the most important strategic focus was to ensure a incentive structure for the sales force, both internal salesmen and external salesforce (dealers, retailers, distributors) such that the one-to-one marketing could be done at the point of sales. However, it was realized that if a fraction of the sales force deviated or moved to another firm, the entire customer segment was lost to the business. The face of the product or service was essentially the sales force. Now as services gained in importance, it was realized that the differentiation of services was even more difficult based on tangible features like that of a product. This was when brand marketing started getting its due importance, where a pull strategy was implemented so as to “pull” the customer to the product or service based on his perception of the quality of the same.

However, with services gaining prominence over time, it was realized that the very definition of services was evolving as more and more services were being focused on internet or info-tech based services where direct interaction with the customer was lost. While branding definitely ensured that the customers develop a brand association with the service, sometimes the nature of the service is such that the essence of the service is a transactional one. So brand marketing focus gradually started to shift towards customer engagement and the benefits of social networks started getting conceptualized. This paved the way for the next generation of marketing, namely marketing using social media.

Since services cannot be differentiated purely based on features on offer, the major differentiation to create a brand association and thus customer engagement, is through tapping the social networks. In the internet economy, social networks are getting increasingly dominated by social media and thus marketing managers of even larger traditional “brick and sell” firms have started recognizing this fact and focusing their efforts on social media marketing.

The 7 S framework for digital marketing started gaining in prominence for services marketing strategists. While the dynamics of a pure internet marketing strategy is slightly different, the essence of the same has been captured in more comprehensive frameworks on digital marketing, which have been derived purely through the theories based on economic rationality.

Over time, it was realized that social media is perhaps the biggest tool today to lead a brand marketing strategy for many of the services and product categories, since in both cases, the target segment often uses the internet as a source of information (through websites or though the personal social network) while deciding on a service vendor. It is at the point of information search that social media marketing can create the largest impact and thus builds its reputation for having a high impact on “brand recall” at the “point of purchase”.

Do let us know if you have any feedback regarding this article.

Customer Lifetime Value management

Today “customer is the king” is the mantra for success for all marketing managers. But for actual decision making, the marketers (especially the relationship managers) are often poised with a simple challenge. They cannot meet the needs of of all the customers equally and satisfy them all.  So how should they prioritize how to satisfy the needs of the customer and by what means to select such customers?

The answer lies in the estimation of the customer’s lifetime value. Customer lifetime value ( CLV or CLTV ), or lifetime value (LTV), or lifetime customer value (LCV) is the net present value of the economic benefits (monetary returns in terms of cash flows) attributed to the relationship with a customer throughout his relationship with the company. The focus on customer lifetime value as a marketing metric is for placing a much greater emphasis on relationship marketing for improving customer service and long-term customer satisfaction, rather than on maximizing short-term sales.

So then, comes the big question, how do one estimate the Customer Lifetime value? The answer is presented to you diagrammatically below, in a simplified manner.

So what should be done to maximize the value from CLTV management? Let us discuss the same in this article step-wise.

  1. First estimate your customer lifetime value for your entire customer base. This would enable you to make an estimate of the total revenue that the customer is likely to provide you if he/she stays with you throughout the estimated life-cycle of the product.
  2. For each customer, estimate the possible churn probability at each stage and discount the CLTV value for each customer.
  3. Segment the customers based on the discounted CLTV value into high net-worth individual (HNI) customers, medium net-worth individual (MNI) customers and Low net-worth individual (LNI) customers
  4. Now, allocate your budget for marketing and relationship management likewise for each customer segment, to maximize the retentivity of every customer in the segment. Do remember that normally, every new customer acquisition is 5 times costlier than retaining an old customer, as had been found out through research. However, if the cost of retention of a singular customer (based on a case-to-case analysis) is more than the discounted CLTV, incentivising his churn is often a good strategy to optimize the negative effects of his network value and negative word of mouth viral effects.
  5. Always try to ensure a greater deal of attention for maximizing customer satisfaction. A fully satisfied customer is likely to provide 5 times more economic value to the firm than a customer with a mid-level satisfaction level. It is also important to remember that it is better to let a customer with low satisfaction level churn rather than attempting to retain him, since such a customer has a negative return to the firm, from the customer’s network ( remember Customer Network Value? )

These are few of the necessary steps to ensure customer lifetime value maximization and optimal management of the same, through better resource allocation. Do let us know if you have any queries, we would be happy to resolve your problems.

Ansoff Matrix

The Ansoff Growth matrix is a tool that helps firms decide their product and market growth strategy based on objective analysis of industry structure and product type. It is one of the more popular tools for strategic management analysis, in the scenario of deciding the case for a related diversification of businesses and firms, which itself is a highly risky strategic decision. Continue reading “Ansoff Matrix”

Michael Porter’s 5 forces model

Porter’s 5 forces model is one of the most recognized framework for the analysis of business strategy. Porter, the guru of modern day business strategy, used theoretical frameworks derived from Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. This theoretical framework, based on 5 forces, describes the attributes of an attractive industry and thus suggests when opportunities will be greater, and threats less, in these of industries.

Attractiveness in this context refers to the overall industry profitability and also reflects upon the profitability of the firm under analysis. An “unattractive” industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition”, from the perspective of pure industrial economics theory. It is important to note that this framework is not for the analysis of individual firms but for the analysis of the industry.

Despite its limitations in the technology enabled business era, Porter’s 5 forces model is still the leading framework for the analysis of industry attractiveness. The limitations of the Porter’s 5 forces model induced the introduction of the 6th Force, namely the Complementors.

This model comprises of an analysis dependent on 4 entities external to the firm and the fifth force: the Industry structure. These forces are defined as follows:

  1. The threat of the entry of new competitors: This encompasses the challenges surrounding if new competitors were to enter the same industry, how would the profitability be affected? This is measured by the indicators which are detailed subsequently and is a proxy measure for the degree of attractiveness of the industry. Factors couls be issues surrounding economies of scale, proprietory product differences, brand identity, switching costs for the customers, capital intensive nature of the industry, access to distribution channels, absolute cost advantages, government policy surrounding new entrants and potential retaliation or fallouts. Higher is the threats of entry of new competitors, lower is the industry attractiveness.
  2. The intensity of competitive rivalry: This is captured by a number of metrics like the growth rate of the industry, the ratio of cost structure to the value added, cost of over-capacity, degree of output differences among competitors, impact of brand and its conversion to sales, switching costs, concentration among the leading players (Herfindal Index), Information flow and complexity, diversity of competing businesses and exit barriers. Higher is the intensity, lower is the industry attractiveness.
  3. The threat of substitute products or services: This is captured to understand to what extent there is a possibility of the industry’s product or services being substituted by some other category of products or services. Factors which predominantly matter in this force are the relative price advantage of the substitutes, relative functional performance advantage of the substitute, switching costs of the customer for moving to the substitute and the customer’s propensity to substitute.
  4. The bargaining power of customers / buyers: This force tries to estimate the degree of bargaining of post-facto relationships that may be empowered due to the dynamics of the relationship. This could be captured through some metrics like the buyer’s concentration as compared to the Industry’s concentration, customer’s volume vs industry output, customer’s switching cost, price sensitivity, degree of product differences, buyer’s profits and decision maker’s incentives. Higher is the bargaining power of the customer, lower is the industry attractiveness.
  5. The bargaining power of suppliers: This force tries to explore the impact of the bargaining power of the industry’s suppliers and how much they can force the industry to share the benefits of value creation through this bargaining power. Factors are covered in terms of differentiation of inputs, switching cost of the suppliers, relationship specific investments required, presence of substitute inputs, supplier’s industry concentration, importance of volume to the suppliers, cost relative to the total purchases in the industry, impact of supplier’s inputs to overall cost structure or differentiation, threats of forward integration, and potential for backward integration. Higher is the bargaining power of the suppliers, lower is the industry attractiveness.

A detailed explanation of what these forces comprise of is provided in the diagrammatic representation of these 5 forces next.

The 5 forces model has been developed as a response to the SWOT analysis of competitiveness of firms, and has continued to remain the most popular framework in business strategy.

The individual dimensions of the 5 forces has been described in details in the diagrammatic representation of the five forces model. The individual scores on theses dimensions may be mapped to a 7 point Likert Scale. Likert scale basically is an ordered, one-dimensional scale from which respondents choose one option that best aligns with their view.The linguistic values for the same would be Very Strongly agree, Strongly agree, Tend to agree, Neither agree nor disagree, Tend to disagree, Strongly disagree and Very strongly disagree.

These responses on the Likert Scale can then mapped quantitatively to -3 to +3 on the extreme points. The mean of the score can be reconverted in the linguistic variables on the Likert Scale and then expressed as whether the particular force is Very Strong, Strong, Slightly strong, Neither strong nor weak,  Slightly weak, Weak, Very Weak.

Although the Porter’s Five forces model is very popular in terms of usage, one must be aware of the limitations of this framework. No framework can be comprehensively understood unless its limitations are understood as well.

By the way do you know what framework you should consider while deciding on a market entry strategy?

Marketing Plan – Blueprint for Marketing Strategy

Today when so much investments are dependent on the outcome of a marketing plan, the same needs to be scrutinized very deeply so as to minimize the risks of non-performance. One such way is to ensure the proper implementation using a marketing strategy plan or a blue-print of implementation for your strategy. So what is a marketing strategy plan?

Basically, it encompasses all the activities in details that needs to be done to ensure that a campaign is successful.

  • For a marketing plan to be successful, the primary importance is understanding whether its adherence to the main marketing mix (4 Ps) is done in a well planned manner. If your objective is to deliver a service, then the 7Ps of Services Marketing needs to be checked out for planned adherence.
  • If you are focusing on extensive usage of technology, are you having ample focus on how you are leveraging the usage of technology vis-a-vis the competencies within your team? Did you take care of the Basics of Digital Marketing Strategy?
  • Have you given the implementation a thought? Is there a structured sequential blueprint to your Marketing Plan which you are planning to operationalize?
  • What is the targeted returns you are expecting from your campaign? Do a cost vis-a-vis outcome-benefit break up for the entire blue-print stage wise. Does each stage commensurate the Expected Returns on Investments (ROI) figures?
  • Last, not the least, does it go hand in hand with the internal competencies of the team that will be implementing your strategy? A great strategy may fall flat without due importance given to the implementation and the competencies of the team.

Do let us know if you need any clarification. Hope you enjoyed reading our articles. By the way, do check out PrintmeIt.com, they create wonderful flyers and brochures which you can you for your advertising campaigns.

Did you read these related articles? They have drawn a lot of attention from readers of similar articles as this one and had been shared extensively in professional networks like LinkedIn.

Digital Marketing – Theories, Strategies and Frameworks

Digital Marketing is basically promotion of brands using all forms of digital advertising mediums to reach the target segment. This now includes Radio, mobile, Internet, Television, social media marketing and other less popular forms of digital media.

While the talk of the day is internet marketing, the latter is only a subset of digital marketing. While digital marketing does involve many of the strategies involved in Internet Marketing, it extends beyond this by including other channels with which to reach people that do not require the use of the Internet. As a result of this decreased reliance on the web based media, the field of digital marketing expands to include media such as cellular media(sms/mms/phone calls), digital signage (digital banner ads and digital outdoor signboards), and other media like television and radio,  it is thus a much more comprehensive methodology to reach out and engage your target audience, and with a higher conversion rate for most product categories.

Previously seen as a stand-alone marketing strategy because of its extension on mediums which it covers, it is currently visualized more as a marketing effort that covers most, if not all, of the more traditional marketing areas such as direct marketing by providing the same method of communicating with an audience but in a manner using the development of science and technology and thus optimizing resources. The spectrum of digital marketing is now being expanded to support the “servicing” and “engagement” of customers, and thus cover not only customer acquisition but also customer retention.

So how should firms go about planning their marketing strategies for a successful digital marketing program? While there is no such common strategy which fits the requirement of all firms like a glove, there are few generic strategic and economic issues that firms need to keep in mind while designing their marketing program.

The first grid has three elements of your proposed strategy. Does your strategy match with the vision and mission of your firm? Does the strategy assembling platform match with the knowledge that is within your marketing team? Is that knowledge formally managed using any platform? Then comes the question of how you are delivering the value transfer from the production of value, to the assembly of value to the end value consumption in a value chain. Is your firm geared to take charge of such a business model?

As in the second half of the architecture, the business model dimensions need to be evaluated based on the digital marketing capabilities. Most important dimension for serious consideration is whether your organization structure is geared to handle the marketing methodologies you are planning to implement.  The dynamics of knowledge distribution also needs to be looked into based on this framework.

7-S-Digital-Marketing

Hope this helps your company to chalk out a successful digital marketing program. Do let us know what you think of the article, with your valuable comments.

Have you read our article on the 4 P’s on Social Marketing?

Also did you read our article on the The 4 P’s of Marketing – The Marketing Mix strategies?

These articles are highly popular posts in our educative blog.

A business that makes nothing but money is a poor business

Henry Ford never said something more meaningful. A business has more implications on the society and environment in which it functions. Its not only the philanthropic activities which matter but activities like “Go Green” paves the way for a sustainable development and a better future for generations to come.

Understanding what an organizations Corporate Social Responsibility may be, may turn out not just an attempt for brand building in the long run, but a survival strategy, in the changing era of government intervention and policing.

CSR policies today, more than ever function as a built-in, self-regulating mechanism whereby organizations would monitor and ensure its support to law, ethical standards and even international norms or expectations. Consequently, today organizations are embracing responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere, just to ensure a humanitarian face towards the ecology within which they thrive. Furthermore, CSR-focused businesses would proactively promote the public interest  by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: people, planet, profit.

Today, CSR is not just a thing that companies may choose to do, but it is gradually turning out to be strategic inclination of major MNCs getting positioned for a better future. Today it has become a key component while evaluating a brand value and its recall value. Considering this take by the MNCs, can even the smaller and medium sized enterprises neglect whatever CSR is possible, in their disposition?

Complexity and Adaptivity of Buyer-Supplier Networks

Buyer-Supply networks are composed of multiple numbers of firms from a variety of interrelated industries. Such networks are subject to shifting strategies and objectives within a dynamic environment, guided by (micro factors) internal factors of the individual firms and also by the (macro factors) industry dynamics of the same. Today, supply chain management  involves adapting to changes in a complicated global network of organizations. As a result, buyer-supplier network decisions and the optimization of the same have become the center stage and concerns the scrutiny of the top level managers.

Two emergent challenges that managers frequently have to address when making these decisions are the structural intricacies of their interconnected supply chains and the need to learn and adapt their organization in a constantly changing environment to ensure its long-term survival. Complex interconnections between multiple suppliers, manufacturers, assemblers, distributors, and retailers are the norm for industrial supply networks. When decision making in these networks is based on non-complex assumptions problems are often hidden, leaving plenty of room for understanding and improving the underlying processes.

Along with managing the complexity inherent in the inter-connectivity of their supply networks, organizations have also started to learn the benefits of being adaptive in their behavior. Because organizations exhibit adaptivity and can exist in a complex environment with myriad relationships and interactions, it is a natural step to identify a supply network as a CAS. Research indicates that that supply networks should be recognized as CAS by providing a detailed mapping of each property of CAS to a supply network.

  1. A CAS consists of entities that interact with other entities and with the environment by following a set of simple decision rules (i.e., schema). These entities may evolve over time as entities learn from their interactions. In contrast to relational modeling, which tries to use one set of variables to explain variation in another set of variables, CAS examines how changes in an individual entity’s schema lead to different aggregate outcomes.
  2. A CAS is self-organizing. Self-organization is a consequence of interactions between entities. Self-organization is defined as a process in which new structures, patterns, and properties emerge without being externally imposed on the system. Because the behavior in complex systems comes from dynamic interactions among the agents and between the environment and the agents, the changes tend to be nonlinear with respect to the original changes in the system.
  3. A CAS coevolves to the edge of chaos, just like coevolution, positing that a CAS reacts to and creates its environment so that as the environment changes it may cause the agents within it to change, which, in turn, cause other changes to the environment.
  4. A CAS is recursive by nature, and it recombines and evolves over time. Furthermore, from a macroeconomic viewpoint, it can be posited that industry supply networks are interrelated within a national or international context and interact together as a CAS in a larger context.

Supply chain research has gained a lot ever since the conceptualization of buyer-supplier networks was done through CAS. What do you think should be the way ahead?

adapted from pathak et al.,2007

Growth Strategies of Web Based New Generation Firms

The cyber world has really come alive with the onslaught of WEB 2.0 technologies. Today, many start ups are being formed by students and entrepreneurs across the world. The web based firms with often no brick and mortar presence have been generating enviable returns, considering the low investments made on them. No wonder, students and young entrepreneurs have started viewing these businesses as endless oceans of opportunities. These firms share some very common characteristics, which are as follows:

  • Being led by young leaders, their culture is essentially fun. The job nature often is based on interactions with others (say for instance in the numerous SEOs springing up).
  • The concept of flexi-work or work from anywhere, anytime has really caught up. Most of the start ups consists of students in their engineering and graduation level.
  • The need of initial investments being very low,  savings from pocket money is often sufficient to start these ventures. ROI, if properly strategized is often very high. In fact, being web-based only, these start-ups do not have the burden of making huge investments on physical infrastructure.
  • A major trend in such start ups is their dynamism of defining their business. Often the fixed costs or investments are such that they would apply to various businesses. So if one business flops, there is always a backup plan easily available. So many web based businesses which may start as sites to sell software may end up doing affiliate marketing for some other products.
  • These firms also have the benefits of having the ability to take small risks which can generate huge rewards, in terms of returns on investments. The very nature of defining their business according to changing needs and trends, makes the business risky, yet provides a great opportunity to generate a huge return.

A major problem for these firms is how to decide upon a proper growth strategy. Most such endeavours begin with a lot of enthusiasm, but the same dies out, when the owners fail to generate the expected income from the same. A few generic points which could be kept in mind while trying to build upon the business are given below:

  • Being essentially web-based, you must have visibility on the web. To ensure that, the first thing you must ensure is a decent traffic to get a decent alexa rank. Now here, many start ups thrive on exchanging links for promotion. While this ensures some traffic to your website, one should remember that you are not actually reaching out to your target segment.
  • After some degree of visibility on the web is obtained, it is required to ensure that there is visibility amongst search engines. Most depend on the umpteen so called SEO companies (Search Engine Optimization) to do this job for them. Problem is these SEO firms ensure a decent alexa rank for your site by exchanging links and promotions amongst themselves only. So depending overtly on them is suicide. The only thing that creates visibility among search engines is quality content. In the WEB 2.0 era, content is the mantra to success.
  • Use of content management sites help in the promotion and visibility of your site. But always remember, not all content management site is suitable for all needs. Expending effort and resources on the correct content management site is crucial for your visibility amongst your potential customers.
  • Try reaching out to your targeted customers. Use a sustainable advertising means for that, like a facebook fan page or twitter. Always remember, it is better to reach out to 100 customers really interested in your product that to 10,000 people who don’t care about your existence. Segmentation, Targeting and Positioning are your success mantra.
  • WEB 2.0 is all about differentiation from your competitors. Are you simply doing things differently or are you able to present yourself as doing different things too?
  • Use videos and pictures to make the site as interactive as possible. Your customers may not always have the time or patience to go through textual content.

These are just few pointers on the few aspects the new generation web based firms must look into for success. These aspects form the core of all the businesses yet when one launches his own business, these very simple yet much needed points are often forgotten.

By the way, have you read our article on Value Creation Strategy and Business Models?

Also you can check out our article on the Business Strategies while setting up an e-Commerce Portal.

The GE-McKinsey matrix and its Limitations for Business Portfolio analysis

A business portfolio is defined as a collection of Strategic Business Units, commonly called SBUs, that make up a firm or a corporation. The optimal business portfolio (a dream for all organizations) is the combination of multiple SBUs such that it helps to exploit the most attractive industries or markets, keeping in mind the competitive strength and weaknesses of the parent corporation or the firm. A SBU can either be an entire company or a division of a large firm, that formulates its own strategy and has separate objectives from the parent organization.

The major objectives of a portfolio analysis of SBUs is to achieve the following:

  • Analyze its current SBU portfolio to decide which SBUs must receive more or less investment
  • Develop growth strategies for adding new SBUs
  • Decide which SBUs must no longer be retained by the parent organization

For the same, BCG Matrix was first proposed by the Boston Consulting Group.  Due to the simplicity of the model, it had its own set of limitations, which was further addressed by the GE-McKinsey matrix.

Based on the location, the strategy flow diagram depicts the actions to be taken by the organization, post analysis with the BCG matrix or the GE-McKinsey matrix.

Typically Market Competitiveness of a SBU is estimated by analyzing the market size of the SBU, the market growth rate, the market profitability, the competitive intensity / rivalry, the overall risk of returns in the industry, the entry barriers, the pricing trends,  opportunity to differentiate, demand variability, segmentation,  distribution structure and the technological development. Similarly Competitive Strength of the SBU is estimated by factors such as strength of assets and competencies, market share, market share growth potential, brand strength, customer loyalty, relative cost structure, relative profitability, distribution strength, production capacity, record of innovation, management strength and access to financial and other investment resources.

Now the GE-McKinsey model, like all generic strategy models has its own set of limitations.

  • A major assumption behind the GE-McKinsey matrix is that it can operate when the economies of scale are achievable in production and distribution. Unless the same holds true, the concept of leveraging the competencies of the firm and the SBU falls flat.
  • Also some of the factors of competitive strength and market competitiveness may be extremely important for a particular instance, while another instance may even require even other factors. The top management of the organization should decide upon these factors very carefully as there is no generic set of factors with which all SBUs may be evaluated.
  • The relative weightage given to each of the factors of competitive strength and market competitiveness is often arbitrary. While some methodology such as the Analytic Hierarchy Process may be used to compute the relative importance of such factors, such is mostly not done. Thus the overall position of the SBU on the matrix could come under criticism.
  • The core competencies of the firm or the corporation are not represented in this analysis. The core competencies may be leveraged across SBUs and can be a deciding factor while judging the competitive strength of the SBUs

If you feel there are any more points which I could incorporate in this explanatory article, feel free to comment and let me know.

By the way, have you read our article on Value Creation Strategy and Business Models?

Also, you may find the article “Growth Strategies of Web Based New Generation Firms” interesting.

FIFA 2010 the other side

Madness. That’s the only word to describe FIFA World Cup 2010 South Africa. Making the headlines have been the big strikers, players who in days will become larger than life personalities & coaches with their strategy. All of a sudden football fanatics have left hearing Pink Floyd or Metallica and drudging themselves downloading the Kaans football song. From T-shirts of once favorite footballer to wrist bands and bandanas. People debating their hearts out over football statistics. Its all happening here. When wise men proclaim of football being the religion I can evidentially understand why.

The world cup for the first time is being hosted on African soil. More reason for South Africa to rejoice over Morocco & Egypt who also were in the run to host the world cup. But lets look at the other side of this entire event. The side less talked about, the economic side.

FIFA 2010 the other side

In choosing South Africa to bring the World Cup to Africa for the first time, FIFA was not only looking at what the country already offers – world class transport, telecommunications, tourism and sporting infrastructure, and people renowned for their passion and hospitality. They were looking ahead.

South Africa is reported spending in the tunes of R5 billion on building and renovating the ten stadiums where the games are to be staged and R5.2 billion on airport up gradation and R3.5 billion on improvement on road and rail network. The country has also put in significant efforts to ensure that the Gautrain, a high- speed rail link between Johannesburg, Pretoria and Johannesburg International Airport is completed.

Consulting reports speculate that the World Cup will inject approximately R21.3 billion into the South African economy, while generating as estimated R12.7 billion in direct spending and create an estimated 159000 new jobs. This sure is to do South Africa more good than just for the game.

With the estimated 3 million visitors for the tournament, the tourism industry will be on a all time high. This apart all the infrastructural developments carried on are benefiting the various constructions and engineering companies in the region. They all will get a slice of the cake.

The huge injection in the economy has been good but what is more meaning full is the indirect benefits that the region will experience. This will help in a sustainable economic lift in subsequent years. This event will change the perception that a large number of foreign investors hold of South Africa and Africa as a whole. This event will not only contribute hugely to South African socio economic growth, but to the development of the continent as a whole.

This merely is not just going to a sporting event where 90 minutes decide the fate of a team. Where impulse run high, adrenaline starts pumping when at the last minute the striker takes a shot at the goal. Beyond all this high tension entertainment that will merely last for 1 month is a strong economic connotation. It is a way to bring economic prosperity to a country or more so a continent as a whole that has been neglected for ages now.

How to Curb Gray Markets

Gray markets are a perennial problem in some industries and even some of the biggest of companies are searching for a solution to this problem. While no fool-proof plan has been devised yet, below I have shared some ideas which may work in many cases, especially in the technology industry. Below I have mentioned some of the methods, followed by the expected results:
During the Product Launch/Market Skimming Stage:
•    Monetary targets and discounts to salespersons  and distributors rather than volume targets

  • Incentive to sell at volume discounts,  when product prices are at its peak, is low as it reduces profitability

•    Don’t price similar products vastly different in different markets without tangible or intangible benefits to the consumer for the price differential

  • Reduced price differential along with transportation and government duties make gray market activity much less attractive

During the Market saturation/Volume Trading Stage:
•    Maintain Sales records and note abnormal spikes and make distributor relations more transparent

  • Unauthorized gray market sales can be caught both by data and by affected distributors. Repeated malpractice by the same party can be detected

•    Ignore gray market activity if there are no complaints or in areas not covered by the distribution-network

  • Volumes are most important in this period of low margins. If a distributor’s network is strong he will out-perform the gray marketer, else company might think of replacing him

During the Servicing Stage:
•    Performance over the previous 2 periods determines the servicing opportunity of the authorized dealers. Company should maintain separate service centers for gray market sales, which should be more costly compared to the conventional channels

  • Products sold by unauthorized people have no chances of making it to the distributors, adds to the disincentive of selling to them. Company maintains its profit and brand name by still providing service to genuine products. However the higher costs involved makes the customer averse to products obtained from gray markets

Apart from the above steps Continuous Involvement in the following ways is also expected of the manufacturer:
•    Create awareness among consumers of difficulties with gray market products. Educate customers about brand-offerings. Like “Cheap is Bad” for high-end exclusive products. E.g. HCL

  • Awareness even in case of undifferentiated products will increase. Only successful branding can overcome price-sensitivity. Brand won’t be held responsible when customers suffer on buying gray market products

•    When reaching the masses is important, increase dealers and check on underperforming dealers. Allocate orders based on past-performance

  • More distributors mean lesser volume discounts for them and lesser untapped area for gray market to develop. Most competitive distributor can grow at the cost of less competent ones, reducing chances of underperformance

•    Continuous Monitoring of Distributor performance and transparent target setting and dialogue. Make distributors increase beats to stock the retailer before the gray marketer can

  • Sales data and distributor relationship are 2 efficient ways of controlling gray market influence. Gray marketer survives on thin margins, if his sales are badly affected once, he will think twice before repeating his ways

•    Monitor own salesperson performance strictly and take necessary steps in case of mal-practice to set an example

  • A company which itself resorts to malpractice has very little bargaining power over malpractising distributors

•    Survey Markets regularly, audit distributor accounts on suspicious gray activity. If action needs to be taken, take before it hurts

  • Without sufficient information no action can be taken, so the route to gray market needs to be tracked. The key against gray marketing is to strike early, strike fast and strike hard

•    Identify hidden reasons behind gray market success and analyze if something can be done by the company

  • Gray market activity can point at some weaknesses on the part of the manufacturer. They can also identify untapped markets and help in expansion and segmentation

How the internet affects Porter’s generic strategy models

In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. Michael Porter (1980) has argued that a firm’s strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus. These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent.

Research has indicated how Porter’s generic strategies would work in the light of ICT enablement of businesses. By applying cluster analysis, researchers were able to differentiate 5 strategy types, which would be significant in e-businesses.

  1. The first strategy, which they call the “Hybrid Strategy”, was pursued by firms which were engaged in diverse market domains with diverse products, take advantage of online specific differentiation factors, and at the same time, pursue cost advantage.
  2. The second strategy that firms focused on had a positive and distinctive value only on the cost leadership dimension.
  3. The third strategy type occupies a less than even mediocre position on every strategic dimension and these firms have only a poor focus on internet specific differentiation. This may reflect lack of clear strategic direction and resource commitment.
  4. The fourth strategy type resembles Porter’s differentiation strategy. This type scores high on market leadership and product proliferation dimensions, indicating an emphasis on staying sensitive to customer needs through diverse products with short life cycle.
  5. The last strategy type is high on both the focus and Internet-specific differentiation dimensions, while also ranking very low on the other dimensions.

These firms do not appear to be concerned with price competition or overall market leadership. Instead, they appear to aim at a small segment of online customers, emphasizing Internet-specific factors such as transaction security and payment convenience. This strategy type is labeled “Online Focus.”  Based on their study, they concluded that, among e-business firms, a hybrid, integrated strategy is a must, and that a traditional cost leadership strategy is unlikely to be associated with success. They also suggest that focused strategies – those that are either narrowly defined differentiation strategies or those that focus on Internet-specific characteristics such as security and convenience of transaction – may have a better chance of success than cost leadership strategies.

Marketing Strategies: Selling Sand In The Desert

Have you ever heard the saying: “A bad salesman couldn’t sell water in the desert”?

Honestly, there is a lot of truth behind that statement. Personality plays a huge role in your effectiveness as a marketer. If others perceive you to be untrustworthy, incompetent or lacking confidence, they won’t want anything you have.

Marketing is all about connecting with your target audience.

It has very little to do with the product. There is always going to be a fan base for what you are selling. It’s just a matter of making a good enough impression on your prospects.

You may have what they want, but if they don’t feel comfortable purchasing from you as a result of your personality, they WILL seek out your competition. Don’t let this happen. Ensure your future in the world of marketing by developing your people skills and understanding how your prospects want to be treated.

So do you think a great salesman could sell sand in the desert?

Absolutely.

A great marketer has great sales/conversion rates because they have both charm and knowledge when it comes to making connections and forming relationships with people.

Marketer or not, you know how you would want to be treated by a salesman. If you don’t like being called various times a day with offers and business opportunities, don’t do it to your potential clients. Before you contact your prospects, take a moment to think about your approach. Questions whether or not you want you would appreciate this same contact from a sales representative.

Self branding and attraction marketing are what separate the Top Earners from everyone else. You know who they are, you see their face and you’ve heard their story. Their personality and marketing experience has allowed them to form strong, personal relationships with people they’ve never met. Their prospects appreciate their character and guidance and trust their recommendations.

Take the first steps towards ensuring your future in the world of marketing by doing the following:


1. Re-evaluate Your Marketing Techniques

Examine how you’ve been marketing lately. What’s been the most effective strategy for you? Why do you think that is? Double check to see if you are doing anything you wouldn’t appreciate having done to you.

2. Find A Mentor

Find someone in the industry who’s achieved the level of success you’re striving for and listen to their trainings and advice. Find out what they did when they were first starting out in the business. This will also introduce you to new marketing techniques to implement.

3. Choose 1-3 Strategies to Master

Depending on your time freedom, elect 1-3 marketing strategies and learn all you can about them. Once you master a technique and all of your systems are in place, learn something new. There is always going to be something new to learn in the world of marketing, but there are the basics.

How the internet affects Porter’s 5 forces model

In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development.

Porter, the strategy guru, used concepts developed in Industrial Organization (IO) economics to derive five forces which determine the competitive intensity and therefore attractiveness of a market. This model describes the attributes of an attractive industry and thus suggests that opportunities will be greater, and threats less, in these kinds of industries. Attractiveness in this context refers to the overall industry profitability. An “unattractive” industry is one where the combination of forces acts to drive down overall profitability. A very unattractive industry would be one approaching “pure competition”.

Porter’s industrial organization competitive analysis framework (five-forces model) is challenged in resource-based critiques. Resource based views were argued to be more suitable than the 5 forces model as a tool for analysis in the wake of web enablement of businesses. Research has established that the rate of unique visitors, the e-business-specific measure, showed significant correlations with market value, net income growth, and employee growth. This implies that cyberspace-specific indicators, such as page views, stickiness, click-through rate, and conversion rate, may not be unreliable as performance measures. In the study, these were added as indicators of industry specific profitability indicators besides those in the Porter’s framework. Porter’s model is also challenged in view of the static nature of the industry which it analyzes. Web enablement increases the dynamic nature of industry structure.

In the light of technology enablement of business to e-business, the five forces, as depicted by Porter are significantly affected. The bargaining power of both suppliers and customers increase as the information accessibility is increased and the information gap is narrowed. This leads to lower bargaining power for the firm, and may transcend into lower profits. Again as e-business enablement increases customer reach, the bargaining power of the customers are negatively impacted by this change. Also, e-business models will enable easier entry into the industry, as now, companies may only look to perform very few activities in-house, and outsource the rest to other firms in the value chain. This decreases the management complexity among new entrants, and thus the threat of new entrants may go up.

5 Secrets on How to create a winning PPC Strategy

For all the online marketers, Pay Per Click (PPC) can be a really powerful strategy for online marketing, but if you don’t know what you are doing then PPC can drain your money in a day. PPC is one of internet advertising methods on websites that has created quite a stir. For example, Google, Yahoo, Bing, even Facebook, they all have PPC program, using which businessmen can advertise their products or websites, but the cost can be huge depending on how many clicks were clicked on your posted ads. Here are some tips for PPC program that will help you lower your cost for advertising and increase your sales or visits.

  1. Facebook PPC : Facebook PPC program will be the best to start with for your business. Why? Facebook ad is actually cheaper than other sites like Google, Yahoo, and Bing. Also, it can target ad details to another different level. It’s really easy to use and the result will be faster than others.
  2. Do Your Homework : You will need to do your homework before you get a good grade in class, right? That means do your research on popular keywords before you actually put them in your ad. There are so much different ways you can do. For me, by using Google Adword, Alexa, and Quantcast are the best ways to find out the popular keyword.
  3. Capture Page : For most online marketers, the Capture page is the most important page. The Capture page is a webpage that allow people to put in information of themselves and provides several lines to insert contact information. Why do I need to have their contact information? Because 97 percents of visitors that view your site will not come back again. But by creating a capture page, they will leave you information such as email or phone number that you can contact them with. This will increase the visit rate. PPC charge money whenever people click on your ad, so in order to make sure you are fully using PPC, create a capture page for your visitor.
  4. Details of Your Ad : How convince people to choose your ad over your competitor’s ad? It’s very easy! You need to make your ad different from the others. What I mean by different is give more details of your product’s effect and how to use them. You are not promoting your product, but you are promoting your knowledge of this product. By promoting your knowledge, this will give viewers the sense of trust and they will look further into your product.
  5. Budget Range : Lastly, if you want to start PPC marketing, you should be prepared to spend around $1,500 to $2,000 for a good start. How come the budget is so high? For the first two months of PPC marketing, result will not come out as good as everyone wish. That’s because you will need to start picking up your leads and momentum for all the promotion you are doing. It’s like a snowball rolling down the hill. As it picks up speed, it becomes bigger and bigger. That’s the budget you might spend to start PPC, if you know what you doing.

These are great tips for a successful PPC marketing online. I will tell you one thing: learn as much as you possibly can before you start any marketing. That’s because the more you learn, the faster results you will receive. PPC is a great way to earn income faster, but if you don’t understanding the process it is the fastest way to lose all your money.

Riding the uncertainty wave – 5 Mantras for Success

The economic slump of 2009 has seen many companies struggling for survival. While some made it, others didn’t. This article provides some insights on what caused such a difference of performance, and provides simple guideline to battle economic uncertainty, especially for the manufacturing industries.

The economic slump of 2009 has seen many companies struggling for survival. While some made it, others didn’t. This article provides some insights on what caused such a difference of performance, and provides simple guidelines to battle the economic uncertainty and financial crisis, especially for the manufacturing industries.

A research by Aberdeen used certain metrics to select the best performers. These best performers in the recession time had some commonalities, which was duly noted:

  1. 24% achieved reduction of the budget cycle time
  2. 108% achieved accuracy of actual budget to planned budget
  3. 68% finalized the budget at the beginning of the fiscal year
  4. 17% improved the profitability in the year
  5. 72% could re-forecast market changes
  6. 92% resorted to enterprise wide collaboration
  7. 70% had the visibility of internal process to drill down and improvise

To overcome such testing conditions, few TBDs are being suggested for firms in the manufacturing sector:

  1. Change management is a must. Try to improve time to decision based on newer models more suited to your business dynamics.
  2. Ensure that whatever IT investments which have already been made, are made best use of, to avail better returns. Often technology is purchased, but not used effectively.
  3. Invest on planning, budgeting, forecasting and customer relationship management applications which would be more suitable for the sensitive environment.
  4. Ensure the development of the ability to understand and react to sensitive changes develops across all the divisions/verticals of the firm.
  5. Ensure every employee is focused on understanding customer requirements. Acquiring  new customer is 5 times more costly than retaining an old one.

Following these few simple yet effective steps would ensure that your firm does not fall prey to the economic disasters.

A winning framework for market entry strategies

A market entry strategy is the planned method of delivering goods or services to a new target market and distributing them there. This article talks about the critical issues that needs to be considered while entering a new market and suggests a list of actions that would mitigate the risks involved better, and hence successfully enter the market.

A market entry strategy is the planned method of delivering goods or services to a new target market and distributing them there. When importing or exporting services, it refers to establishing and managing contracts in a foreign country. Few companies successfully operate in a niche market without ever expanding into new markets but most businesses achieve increased sales, brand awareness and business stability by entering a new market. Developing a win-win market entry strategy involves a thorough analysis of  multiple factors, in a planned sequential manner.

When an organization makes a decision to enter an new market, there are  various issues that needs to be thought out. These options vary with cost, risk and the degree of control which can be exercised over them. The simplest form of entry strategy is often exporting, using a direct (agent) or indirect method (counter trade). More complex forms include truly global operations which may involve joint ventures, or export processing zones.

An organization wishing to enter a new market faces 3 major issues:

  1. Marketing – which markets, which segments, how to manage and implement marketing effort, how to enter – with intermediaries or directly, with what information?
  2. Sourcing – whether to obtain products, make or buy?
  3. Investment and control – joint venture, global partner, acquisition?

Firms can follow the mentioned steps in sequence to create that successful blend of strategies while entering a new market.

Planning these few steps in details would ensure that firms face less risk while entering a new market during expansion. Although there is no absolute success mantra to enter a new market, these activities would significantly lower the risk exposure of the firm and create a winning scenario.

Have you read our article on the Porter’s Five Forces analysis of industry competitiveness? This is a must-read article for anyone planning to get into a new market.

Read more about market entry frameworks.

Can you Digg it?

Digg.com is still a relatively lesser known name among many people but is one name that is growing astronomically, especially in the United States and more recently India, where people live on the news provided on Digg. Read the success story behind Digg, the company which is changing the way content gets managed on the web.

Digg.com is still a relatively lesser known name among many people but is one name that is growing astronomically, especially in the United States and more recently India, where people live on the news provided on Digg.

Digg is a place for users to share content from anywhere on the web, be it one’s own blog or content from someone else. From the biggest online destinations to the most obscure blog, Digg users today share the most popular posts on the web and it has become a major single point to share content. Content gets popular, if more and more people likes it, and it gets more Dugg with increase of popularity.

Today, Digg is only 5 years old, and has a global traffic rank of 104, and is one of the top 50 visited sites in USA and many other countries.

Founded by Kevin Rose and launched in November 2004, Digg has grown to be one of the most popular sources of information on the Web. The team is led by CEO Jay Adelson, founder of the billion-dollar company Equinix (EQIX).

Following are the rank of Digg amongst all websites among few countries.

Majority of Digg users come from the following countries:

From a business perspective, Digg shows us how business models can evolve over time and how companies can create a niche out of evolving needs of consumers. A company whose revenue model thrives solely by engaging the users to add content to its site, and increase its hits, Digg is one of the wonders of this e-business era. Thus, all the users, provide  and manage content, and also vote (by Digging) which content they like better, and all this, the users do for FREE.

While this reminds us of Google and Wikipedia, whose success stories banked on the ability to manage and provide content to its users, Digg is unique. It actually helps to develop a taste of reading amongst its users as well. The user is guided on what is the hot topic that he should know about in the domain of  technology, business, science , gaming, lifestyle, entertainment and sports.

Today, Digg is positioned to be another success story on whom case studies would be made by students of business management, as one of the wonders of the internet business models, who changed the dynamic of the game.

If you were Digg’s competitors, what would you do? Should companies like Wikipedia and Google look carefully at Digg’s business model?

Web enablement implications for business strategy

E-business is a term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business. In a more general sense, the term may be used to describe any form of electronic business – that is to say, any business which utilizes information technology. This usage is somewhat archaic, however, and in most contexts e-business refers exclusively to Internet enabled businesses.
In the emerging global economy, e-commerce and e-business have increasingly become a necessary component of business strategy and a strong catalyst for economic development. The integration of information and communications technology (ICT) in business has revolutionized relationships within organizations and those between and among organizations and individuals. Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs.
With developments in the Internet and Web-based technologies, distinctions between traditional markets and the global electronic marketplace-such as business capital size, among others-are gradually being narrowed down. The name of the game is e-business strategy, and the ability of a company to determine emerging opportunities and utilize the necessary human capital skills (such as intellectual resources) to make the most of these opportunities through an e-business strategy that is simple, workable and practicable within the context of a global information milieu and new economic environment is making all the differences. With its effect of leveling the playing field, e-commerce coupled with the appropriate strategy and policy approach enables small and medium scale enterprises to compete with large and capital-rich businesses.
In this study, an attempt is being made to study various individual studies that have focused on e-business strategies, and on how technology impacts the various popular models of strategy. For the same, a literature survey has been done to show case the emerging business models and how the areas of difference for various models of strategy arise, with the advent of internet technology, and their usage in businesses, and thus their implications.
This paper is a must read for all business practitioners and academicians looking into ways of optimizing business strategies through web enablement. This paper has recorded as one of the top 10 downloaded papers in SSRN.