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Marketspace Strategy - a Discovery Process - Michael Quinn.

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Introduction

Marketspace Strategy - a Discovery Process. Michael Quinn * Few managers now doubt that electronic commerce is growing. Forrester estimate that by 2001 ecommerce revenues will total $64 billion in Europe. But there is considerable scepticism about the size and development of the Irish electronic marketplace, particularly the business to consumer market. Many managers are wondering whether this is an evolution or a revolution? But most senior managers that I talk to are interested in discovering the answers to two key questions : How will electronic commerce impact my business? And what should I do about it? This article looks at the strategic issues posed by the Internet, highlights a key insight from my ongoing work in this area and outlines three scenarios for discovering an Internet action plan. Strategic Issues There are a number of strategic issues lurking in the Marketspace, the environment where companies do business electronically. Marketspace is a term coined by Professors John Sviokla and Jeffrey Rayport of the Harvard Business School. The key issues are; * Technology is redefining the marketplace. A recent CEO survey by Diamond technology partners discovered that about 70% of managers surveyed believed that technology 'can either upset their company's plans or provide significant new business opportunities'. For example,Visio the software company (which develops, markets, and supports drawing and diagramming software) are exploiting the internet to provide a customised experience for their customers. They have just launched eVisio where customers can configure the products they want online. * New Virtual Competitors are emerging. Driven by different net based economics many new companies who did not exist in the marketplace are now going online and capturing significant business. ...read more.

Middle

This is well worth investigating. But to get a handle on this I suggest you look deeply into two key areas. The first area for consideration is your customers or business partner's (see eSelling below). What are your best and most profitable customers doing? Spend some time with them discussing their plans and use of the Internet. Secondly look at your competition. Two groups are important here, your existing marketplace competitors and second your new Marketspace competitors. However it is important to remember that you are playing in a global marketspace. So the competitors you should review are not just Irish ones but the 'best in class' in Internet terms. For example if you are in banking it may be more appropriate to compare yourself with Citibank or Wells Fargo than just looking at your nearest physical competitor. A recent study comparing online banking services was conducted as part of an ongoing project by students in the telecommunications and e-commerce program at Vanderbilt University's Owen Graduate School of Management. The study is available free of charge at SupportZone.com (http://www.supportzone.com), which is an online resource designed to help e-businesses improve the responsiveness of their online customer interactions. How are your competitors using the Internet to reach the online nation? What new business models are emerging, probably in California, which might rewrite the business rules of your business? The Opportunity search Look at the online business cycle for your business. Where are the opportunities to reduce cost, improve efficiency, find more customers or personalise your products for your customers or discover new profit streams? Take a closer look at all the activities in your commerce chain such as: * eMarketing: How can we exploit the technology to help our customers solve their problems and thus build stronger relationships? ...read more.

Conclusion

Somewhere out there is a competitor, unborn and unknown, that will render your business model obsolete." (Gary Hamel and Jeff Sampler, Fortune, Dec 7th, 1998). This article has identified how technology is redefining the marketplace, new virtual competitors are emerging, customer knowledge is poor and the best customers are going online. A recent presentation in Dublin by Gartner researcher Alexander Drobik forecasted that 'to year end 2001, over 70% of multinational enterprises will have failed to plan a coherent approach to eBusiness leading to a significant loss of competitiveness." We need to discover where we can act, that is what our strategic degrees of action are and then to act in the action zone, before others do. Internet strategy is a fundamentally discovery process. There are no right answers, but I hope this article has provided some useful guiding questions. The three scenarios of 'Do Nothing', 'Opportunity Search' and 'Doomsday Competitor' are devices to assist you map your route in the as yet undefined territory of the Marketspace. May the forces be with you. Michael Quinn is an eStrategy consultant who specialises in Internet strategy discovery. He was formerly the Strategic Planning and Alliances Manager at Digital's European Software business in Galway. He has worked with Professor John Sviokla of the Harvard Business School and has authored a HBS case study exploring Internet Strategy in the Banking Industry. He lectures widely on Ecommerce and provides board level Internet Strategy advice and briefings. He can be reached by e-mail at mfquinn@tinet.ie or on 086-814-9819. Michael also lectures on the Trinity Institutes E-Commerce programme, more details of which can be obtained from 01-280-2984. * Quinn, Michael; Sviokla, John J. Marketspace Strategy and the European Information Society In: Klein, Stefan: EM - Electronic Auctions. EM - Electronic Markets, Vol. 7, No. 4, 12/97 http://www.electronicmarkets.com/netacademy/publications.nsf/all_pk/266 ...read more.

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