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