Transcript Innovation

EC10: L11 New Media
What it takes to build a successful
Venture Team
L11: New Media Outline
E-Business
 Digital & Market Convergence
 CRM & Integration
 Extranets

11: New Media
2
1. E-Business
EC10 Innovation &
Commercialisation
Advantages to SMEs
Increase selling power by shortening procurement cycles through
the use of online catalogues, ordering and payment.
Cut costs on stock and manufactured goods through competitive
bidding.
Provide new information and communication channels to keep
abreast of new developments.
– Potential to reduce development cycles and accelerate time-to-market
through collaborative product implementation.
Ability to exploit a new global market at a fraction of traditional
methods, through new forms of advertising and marketing.
Ensure product, marketing information and prices are always kept
up to date.
Improve and increase communication with staff, supplier and
customers via e-mail and document sharing. Currie (2000)
11: New Media
4
Definitions
“Doing business electronically.” Oracle
– This may include the exchange of goods, services or
information and the technology infrastructure to
support this process.
“Electronic commerce is the exchange of
information across electronic networks, at any
stage in the supply chain, whether within an
organisation, between businesses, between
business and consumers, or between the public
and private sectors, whether paid or unpaid”
DTI:
11: New Media
5
Working Definition
e-business is "a secure, flexible and integrated approach to
delivering differentiated business value by combining the systems
and processes that run core business operations with the
simplicity and reach made possible by Internet technology’’.
This definition means that e-business is more than just a Web
shop on the Internet
E-business is also distinct from e-commerce. This is trading online and is associated with a transactional Internet Site. Ecommerce is invoicing and order processing and it is part of the
mechanics of running a (Business to Customer) business
efficiently.
E-business can reach into every aspect of the organisation.
E-business must "fit" your businesses organisation's vision and
your team must be committed to managing the business change
and minimising the disturbance it causes.
11: New Media
6
E-business
E-business is e-commerce plus business
intelligence, CRM, SCM and ERP. Strauss et al (2001)
E-commerce is generally thought of as a subset
of E-business. It focuses on the marketing and
sales processes of E-business but does not
cover such a broad area as E-business.
E-commerce as “a general concept conveying
any form of business transaction or information
exchange using information and communication
technology between companies and their
customers.” Esprit (1997)
11: New Media
7
E-Business Toolkit: Strategic Imperatives
Preliminary Questions
(Refer to Awareness)
– Will e-business affect dramatically the competitive
landscape in which you trade?
Are there first mover advantages?
Is it better to learn from competitors?
– By what means should your business “connect”
electronically
What (efficiency) role does e-commerce play in supplier
development?
What (value added) services can it offer?
– What Internal and external resources do you have
and do you need to respond?
11: New Media
Selecting Markets
8
Toolkit: Selecting Markets Electronically
– List the information sources that you have and
identify the missing information components
you still need.
– Are you intending to research in-house or
contract out?
– Can you pilot this approach of market and
customer selection?
Refer to Selecting Markets
11: New Media
Creating Awareness
9
Toolkit: Validating The Business
Model
How strong is your brand
–
–
–
–
value chain
core values,
Message and presentation
Awareness.
How are strategy, operations, engineering, customer services and
R&D linked into a system that enables (or prevents) new business
products or services being brought to market?
How should current management practices and current innovation
practices be changed to accommodate e-business?
Will a combination of enabling technologies with new business
models create breakthroughs?
What are the key external factors and relationships that lead to
success?
Is it possible to benchmark against one or more companies that has
succeeded and/or failed to introduce e-business?
11: New Media
10
Toolkit: Marketing Check List
Online form for customer/market research
Analyse information on customer profiles and buying
patterns
Access to web site visitor statistics
Forecast customer and supplier demand
Involve customers in product development
Share information throughout company and
employees
Share information with specific customers, suppliers &
partners
Recruit potential employees
Help to communicate with, and train, existing
staff/employees
11: New Media
11
Toolkit: Promotions Checklist
Promote company services and products.
Provide online form for sales enquiries or
leads.
Provide product information dependent on
visitor status.
Provide pricing information dependent on
visitor status.
11: New Media
12
Toolkit: Order Fulfilment
Decide which, if any customers can order products on-line.
– End-users.
– Representatives.
– Partner Organisations.
Online order payment using
– electronic banking transfers.
– credit card processing.
Customers will be able to place multiple orders?
Allow customer to enter order directly into internal (just-in-time)
systems.
Allow customer to track order status.
Dispatch product from web site
– Directly
– Through Electronic Link to third party dispatch
11: New Media
13
Toolkit: After-sales service
Provide online help and customer service facilities.
Provide a FAQ list of common customers' queries.
Provide an online knowledge base for customers to
search/query.
Online form for customer feedback and comments.
Provide discussion groups or mailing lists for overseas
distributors.
Management
– Outsource web design, fulfilment and logistics to specialist.
– Retain function in-house.
11: New Media
14
2. Digital & Market
Convergence
Electronic Business Content


“The Internet is a world-wide experimental lab, where
new technologies, applications, products and services are
being tested. Barriers to entry are low, enabling a huge
variety of small-scale enterprise and innovation in
marketing and advertising, sales and distribution. This
experimentation plays on the many-to-many features of
the medium.
Business has been quick to adopt ICT and the Internet as
strategic elements of competitiveness. Internally, ICT is
used to enhance communications within and among
functional areas such as sales, marketing, R&D and
production. Companies have used ICT to better interact
with their suppliers and partners, and have been able to
drastically reduce inventories through "just-in-time"
production methods. Similarly, the way in which
companies interact with consumers is changing. The
banking sector, for example, has extensively used ICT to
change the way it does business with the customer.
(OECD “The Economics of The Information Society”, March 1999)
11: New Media
16
Electronic Business Content

Two areas of growth
– Internal Effeciency - Economic activity around building
the information communications infrastructure, including
hardware in the form of computers, routers and fibre
optic cable.
– External Effectiveness - Content and customer services - the new "knowledge industries" -- are the key areas of
long run growth. Indeed, knowledge is now recognised
as being at least as important as physical capital, labour
and natural resources, as a force driving growth,
embedded in the structure of a production process, in
the value-added capabilities of a product, in
organisational structure, and in strategy. Innovation as
a stated objective of a company’s operation is a key
characteristic of the GIS”.
11: New Media
17
Infrastructure Linkages In the Economy
11: New Media
18
European E-business Landscape (1)

Convergence:
– Convergence impacts on the disruptive use of technology and media.
Throughout Europe and especially in Scandinavia, government agencies
recognise the importance of new entrants who encourage dynamic and
competitive growth. Arguably this has not happened in Germany and in
Spain and this, in part explains their poor showing.

Critical Mass:
– E-business do not exist in isolation. They are the central part of a value
chain. On the supply side they rely on having a communications backbone
and ICT suppliers who they can work with to distribute digital content.
– On the demand side, the indigenous population must have the means and the
intent to consume whatever content is produced. It is also important that
key industries such as financial sector, entertainment, education and health
exist. If any of these components are missing the creative cluster is unlikely
to achieve critical mass eg in Italy the country consists of smaller industries.
Here traditional sectors like publishing are undergoing a transformation, in
response to growing demand and a threat from non-Italian entrants.
– The implication is that a thriving cluster is based on external industry
linkages being established and cultivated. Countries like Finland have
deregulated communications and media distribution industries meaning the
population, even in the remoteness of areas, has access to broadband.
Alongside this, computers and other digital media are readily available,
meaning there is little resistance to consuming digital content. Poland and
Spain are in the final stages of deregulation although neither country yet has
a high level of penetration of PC.
11: New Media
19
The European Landscape (2)

Core companies:
– Along with digital convergence comes consolidation. This occurs across industry
levels and across national boundaries. Some smaller countries like Netherlands,
Belgium and Denmark take advantage of this by allowing US and European
media companies to work alongside their own indigenous operators.
– The larger transnational European broadcast and media companies drive
demand. Core companies are vertically integrated and they link across Europe
and the world like a spider’s web. The core companies are critical to gaining
market access.
– This means a few European companies hold the key to gaining market entry.
Example Bonnier, a family owned Swedish company with 71 subsidiaries and
extensive reach throughout the Nordic countries and Eastern Europe.
– The core companies are surrounded by a ring of specialist SME’s suppliers. In
effect the core companies use the innovation of the SME’s to devise and deliver
new applications.
– For companies seeking to enter new (European) country markets, the choice
exists to work either with the core companies or to form Strategic Business
alliances with specialist SME’s, that already operate woithin the sphere of the
core companies. Both stratgeies are designed to gian a foothold with the main
market players and indicate the synergistic relationship that continues to exist
between the smaller innovators and the larger distributors of digital content.
11: New Media
20
European Landscape (3)

Cultural Adaptation:
– Localisation of content is endemic across Europe and
offers opportunities to make content and delivery
suitable for local groups of consumers.
– Licensing in and licensing out is closely associated
with partnering and joint ventures. Traditional
forms of “exporting” involve appointing
distributors or agents. These are lower priority
methods than the alternative peer-to-peer
methods of entry. Whilst these may be common in
Nordic countries, UK based cottish companies may
be less inclined to use them. However it is
difficult for the uninitiated new entrant to devise a
“route maps” to forming alliances.
– Strategically, the markets of southern Europe, offer the
most opportunities.
11: New Media
21
Difficulties for Emergent industries

Newly formed or reformed industries, created by
technology innovations, shifts in relative cost
relationships, emergence of new consumer needs
or economic and social changes.
– The rules are that there are no rules.
– The Environment:




Technological uncertainty, strategic uncertainty, initial high
costs but steep cost reduction
Adoption rates Buyers of emerging technology are
inexperienced.
Need to induce substitution, inform about functions and
overcome perceived risks.
Short time planning horizons
Porter, Competitive Strategy, Collier Macmillan Publishers, 1980, pp237 -253
11: New Media
22
Planning Problems For Early Entrants
– Inability to secure supply lines & maintain quality
– Escalation of material prices & labour costs
– Absence of infrastructure – channel, servicing,
complementary products
– Absence of standardisation and regulatory framework
– Perceived likelihood of obsolesce
– Image credibility with Financial Community
– Response of (entrenched) companies
– Cost of Failure
– Introduction of incentives to switch costs
11: New Media
23
Europe & Convergence
The potential size of the European
multimedia market is considerable,
rivalled only by the USA and Japan.
 Compared to most parts of the world,
Europe starts with good quality telephone
networks and a high penetration of cable
television and personal computers.
 Europe has a strong tradition of public
service broadcasting and produces some
high-quality programming.

11: New Media
24
Challenge of Integration




Europe is a heterogeneous market in which almost every
country has a different language which will make it difficult
to develop pan-European multimedia applications.
Europe is a fragmented market in cultural terms and
developments in teleworking or electronic commerce may
well work out very differently in different countries.
The regulatory and legal frameworks governing industries
like telecommunications and broadcasting are different in
the various countries of Europe.
The European Commission is very active in the fields of
telecommunications, broadcasting and the new multimedia
and it has established an Information Society Forum to
examine the social implications of these developments.
11: New Media
25
3. CRM & Integration
E-CRM
 The use of IT to provide customer interactions with
reduced, human intermediation on the supplier
side. eCRM consists of three elements:
– The use of direct-to-customer channels, principally
email and Web
– Emerging channels such as WAP, intranets, portals and
personalised management systems
– Using IT to select relevant material to be presented to
the customer, in terms of content, offers and support
information.
11: New Media
27
Direct to Customer Channel
 (DTC) channels provides a means for
customer-facing enterprises to communicate
with their customers more cheaply,
instantaneously and repeatedly.
 It acts as an enabler for automated systems,
links clicked in emails, items viewed but not
purchased in online stores etc
11: New Media
28
On-line Integration

One-to-One
– Each company, buyer or seller treats each partner as a discrete entity and all
communications and processes modelled accordingly. (Electronic Data Interchange
(EDI)

One-to-Many
– Several SMEs can combine their purchase requirements with a view to increasing
supply chain efficiencies— accomplished through more economical purchases.
Virtual marketplace is needed. “infomediary”.

Many-to-Many
– In an anonymous manner, a prospective SME buyer posts to a market a desired
requirement. The posting may be a simple “order”, or may include some engineer-toorder or make-to-order elements such as product specification or certification
requirements.

4. Peer-to-Peer
– Connections are like tunnels that were closed making each tunnel independent.
Peer-to-Peer has been called the ”Napsterisation of the supply chain”. This
technology did not need a central server. Each peer operates independently and in
an open manner. White, 2003
11: New Media
29
4. Extranets
4. Intra & Extranets
 An Intranet gives staff within a company
the means to access company critical
information.
 An extranet extends this access to
customers, suppliers and trade partners.
In effect extranets are a marketing tool
that develop the collaboration and
knowledge sharing aspect of intranet
onto a new level.
11: New Media
31
Extranet Applications






1. Web-based Discussion Forums
2. On-line Polls
3. Company Forms
4. Policy & Procedure Manuals
5. Live Chat
6. Phone Directory
11: New Media
32