ec10: l11 new media what it takes to build a successful venture team

EC10: L11 New MediaEC10: L11 New Media

What it takes to build a What it takes to build a successful Venture Teamsuccessful Venture Team

11: New Media11: New Media 22

L11: New Media OutlineL11: New Media Outline

E-BusinessE-Business Digital & Market ConvergenceDigital & Market Convergence CRM & IntegrationCRM & Integration ExtranetsExtranets

1. E-Business 1. E-Business

EC10 Innovation & EC10 Innovation & CommercialisationCommercialisation


Advantages to SMEsAdvantages to SMEs

Increase selling power by shortening procurement cycles through Increase selling power by shortening procurement cycles through the use of online catalogues, ordering and payment.the use of online catalogues, ordering and payment.Cut costs on stock and manufactured goods through competitive Cut costs on stock and manufactured goods through competitive bidding. bidding. Provide new information and communication channels to keep Provide new information and communication channels to keep abreast of new developments. abreast of new developments. – Potential to reduce development cycles and accelerate time-to-market Potential to reduce development cycles and accelerate time-to-market

through collaborative product implementation.through collaborative product implementation.Ability to exploit a new global market at a fraction of traditional Ability to exploit a new global market at a fraction of traditional methods, through new forms of advertising and marketing.methods, through new forms of advertising and marketing.Ensure product, marketing information and prices are always kept Ensure product, marketing information and prices are always kept up to date.up to date.Improve and increase communication with staff, supplier and Improve and increase communication with staff, supplier and customers via e-mail and document sharing. Currie (2000)customers via e-mail and document sharing. Currie (2000)


DefinitionsDefinitions

““Doing business electronically.”Doing business electronically.” Oracle Oracle– This may include the exchange of goods, services or This may include the exchange of goods, services or

information and the technology infrastructure to information and the technology infrastructure to support this process.support this process.

““Electronic commerce is the exchange of Electronic commerce is the exchange of information across electronic networks, at any information across electronic networks, at any stage in the supply chain, whether within an stage in the supply chain, whether within an organisation, between businesses, between organisation, between businesses, between business and consumers, or between the public business and consumers, or between the public and private sectors, whether paid or unpaid”and private sectors, whether paid or unpaid” DTI:DTI:


Working DefinitionWorking Definition

e-business is "e-business is "a secure, flexible and integrated approach to a secure, flexible and integrated approach to delivering differentiated business value by combining the systems delivering differentiated business value by combining the systems and processes that run core business operations with the and processes that run core business operations with the simplicity and reach made possible by Internet technologysimplicity and reach made possible by Internet technology ’’. ’’. This definition means that e-business is more than just a Web This definition means that e-business is more than just a Web shop on the Internetshop on the InternetE-business is also distinct from e-commerce. This is trading on-E-business is also distinct from e-commerce. This is trading on-line and is associated with a transactional Internet Site. E-line and is associated with a transactional Internet Site. E-commerce is invoicing and order processing and it is part of the commerce is invoicing and order processing and it is part of the mechanics of running a (Business to Customer) business mechanics of running a (Business to Customer) business efficiently. efficiently. E-business can reach into every aspect of the organisation. E-business can reach into every aspect of the organisation. E-business must "fit" your businesses organisation's vision and E-business must "fit" your businesses organisation's vision and your team must be committed to managing the business change your team must be committed to managing the business change and minimising the disturbance it causes. and minimising the disturbance it causes.


E-businessE-business

E-business is e-commerce plus business E-business is e-commerce plus business intelligence, CRM, SCM and ERP. intelligence, CRM, SCM and ERP. Strauss et al Strauss et al (2001)(2001)

E-commerce is generally thought of as a subset E-commerce is generally thought of as a subset of E-business. It focuses on the marketing and of E-business. It focuses on the marketing and sales processes of E-business but does not sales processes of E-business but does not cover such a broad area as E-business.cover such a broad area as E-business.E-commerce as “E-commerce as “a general concept conveying a general concept conveying any form of business transaction or information any form of business transaction or information exchange using information and communication exchange using information and communication technology between companies and their technology between companies and their customers.”customers.” Esprit (1997) Esprit (1997)


E-Business Toolkit: E-Business Toolkit: Strategic ImperativesStrategic Imperatives

Preliminary QuestionsPreliminary Questions– Will e-business affect dramatically the competitive Will e-business affect dramatically the competitive

landscape in which you trade?landscape in which you trade?Are there first mover advantages?Are there first mover advantages?Is it better to learn from competitors?Is it better to learn from competitors?

– By what means should your business “connect” By what means should your business “connect” electronicallyelectronically

What (efficiency) role does e-commerce play in supplier What (efficiency) role does e-commerce play in supplier development?development?What (value added) services can it offer?What (value added) services can it offer?

– What Internal and external resources do you have What Internal and external resources do you have and do you need to respond?and do you need to respond?

(Refer to Awareness)

Selecting Markets


Toolkit: Selecting Markets ElectronicallyToolkit: Selecting Markets Electronically

– List the information sources that you have and List the information sources that you have and identify the missing information components identify the missing information components you still need.you still need.

– Are you intending to research in-house or Are you intending to research in-house or contract out?contract out?

– Can you pilot this approach of market and Can you pilot this approach of market and customer selection?customer selection?

Creating Awareness

Refer to Selecting Markets


Toolkit: Toolkit: Validating The Business Validating The Business ModelModel

How strong is your brand How strong is your brand – value chainvalue chain– core values, core values, – Message and presentationMessage and presentation– Awareness.Awareness.

How are strategy, operations, engineering, customer services and How are strategy, operations, engineering, customer services and R&D linked into a system that enables (or prevents) new business R&D linked into a system that enables (or prevents) new business products or services being brought to market?products or services being brought to market?How should current management practices and current innovation How should current management practices and current innovation practices be changed to accommodate e-business?practices be changed to accommodate e-business?Will a combination of enabling technologies with new business Will a combination of enabling technologies with new business models create breakthroughs?models create breakthroughs?What are the key external factors and relationships that lead to What are the key external factors and relationships that lead to success?success?Is it possible to benchmark against one or more companies that has Is it possible to benchmark against one or more companies that has succeeded and/or failed to introduce e-business?succeeded and/or failed to introduce e-business?


Toolkit: Marketing Check ListToolkit: Marketing Check List

Online form for customer/market researchOnline form for customer/market researchAnalyse information on customer profiles and buying Analyse information on customer profiles and buying patternspatternsAccess to web site visitor statisticsAccess to web site visitor statisticsForecast customer and supplier demandForecast customer and supplier demandInvolve customers in product developmentInvolve customers in product developmentShare information throughout company and Share information throughout company and employeesemployeesShare information with specific customers, suppliers & Share information with specific customers, suppliers & partnerspartnersRecruit potential employeesRecruit potential employeesHelp to communicate with, and train, existing Help to communicate with, and train, existing staff/employeesstaff/employees


Toolkit: Promotions ChecklistToolkit: Promotions Checklist

Promote company services and products.Promote company services and products.

Provide online form for sales enquiries or Provide online form for sales enquiries or leads.leads.

Provide product information dependent on Provide product information dependent on visitor status.visitor status.

Provide pricing information dependent on Provide pricing information dependent on visitor status.visitor status.


Toolkit: Order FulfilmentToolkit: Order Fulfilment

Decide which, if any customers can order products on-line.Decide which, if any customers can order products on-line.– End-users.End-users.– Representatives.Representatives.– Partner Organisations.Partner Organisations.

Online order payment usingOnline order payment using– electronic banking transfers.electronic banking transfers.– credit card processing.credit card processing.

Customers will be able to place multiple orders?Customers will be able to place multiple orders?Allow customer to enter order directly into internal (just-in-time) Allow customer to enter order directly into internal (just-in-time) systems.systems.Allow customer to track order status.Allow customer to track order status.Dispatch product from web siteDispatch product from web site– DirectlyDirectly– Through Electronic Link to third party dispatchThrough Electronic Link to third party dispatch


Toolkit: After-sales serviceToolkit: After-sales service

Provide online help and customer service facilities.Provide online help and customer service facilities.Provide a FAQ list of common customers' queries.Provide a FAQ list of common customers' queries.Provide an online knowledge base for customers to Provide an online knowledge base for customers to search/query.search/query.Online form for customer feedback and comments.Online form for customer feedback and comments.Provide discussion groups or mailing lists for overseas Provide discussion groups or mailing lists for overseas distributors.distributors.Management Management – Outsource web design, fulfilment and logistics to specialist.Outsource web design, fulfilment and logistics to specialist.– Retain function in-house.Retain function in-house.

2. Digital & Market 2. Digital & Market ConvergenceConvergence


Electronic Business ContentElectronic Business Content ““The Internet is a world-wide experimental lab, where The Internet is a world-wide experimental lab, where

new technologies, applications, products and services are new technologies, applications, products and services are being tested. Barriers to entry are low, enabling a huge being tested. Barriers to entry are low, enabling a huge variety of small-scale enterprise and innovation in variety of small-scale enterprise and innovation in marketing and advertising, sales and distribution. This marketing and advertising, sales and distribution. This experimentation plays on the many-to-many features of experimentation plays on the many-to-many features of the medium. the medium.

Business has been quick to adopt ICT and the Internet as Business has been quick to adopt ICT and the Internet as strategic elements of competitiveness. Internally, ICT is strategic elements of competitiveness. Internally, ICT is used to enhance communications within and among used to enhance communications within and among functional areas such as sales, marketing, R&D and functional areas such as sales, marketing, R&D and production. Companies have used ICT to better interact production. Companies have used ICT to better interact with their suppliers and partners, and have been able to with their suppliers and partners, and have been able to drastically reduce inventories through "just-in-time" drastically reduce inventories through "just-in-time" production methods. Similarly, the way in which production methods. Similarly, the way in which companies interact with consumers is changing. The companies interact with consumers is changing. The banking sector, for example, has extensively used ICT to banking sector, for example, has extensively used ICT to change the way it does business with the customer.change the way it does business with the customer. (OECD “The Economics of The Information Society”, March 1999)(OECD “The Economics of The Information Society”, March 1999)


Electronic Business ContentElectronic Business Content Two areas of growth Two areas of growth

– Internal Effeciency - Economic activity around building Internal Effeciency - Economic activity around building the information communications infrastructure, including the information communications infrastructure, including hardware in the form of computers, routers and fibre hardware in the form of computers, routers and fibre optic cable. optic cable.

– External Effectiveness - Content and customer services External Effectiveness - Content and customer services -- the new "knowledge industries" -- are the key areas of -- the new "knowledge industries" -- are the key areas of long run growth. Indeed, knowledge is now recognised long run growth. Indeed, knowledge is now recognised as being at least as important as physical capital, labour as being at least as important as physical capital, labour and natural resources, as a force driving growth, and natural resources, as a force driving growth, embedded in the structure of a production process, in embedded in the structure of a production process, in the value-added capabilities of a product, in the value-added capabilities of a product, in organisational structure, and in strategy. Innovation as a organisational structure, and in strategy. Innovation as a stated objective of a company’s operation is a key stated objective of a company’s operation is a key characteristic of the GIScharacteristic of the GIS”.”.


Infrastructure Linkages Infrastructure Linkages In the EconomyIn the Economy


European E-business LandscapeEuropean E-business Landscape (1) (1)

Convergence:Convergence:– Convergence impacts on the disruptive use of technology and media. Convergence impacts on the disruptive use of technology and media.

Throughout Europe and especially in Scandinavia, government agencies Throughout Europe and especially in Scandinavia, government agencies recognise the importance of new entrants who encourage dynamic and recognise the importance of new entrants who encourage dynamic and competitive growth. Arguably this has not happened in Germany and in competitive growth. Arguably this has not happened in Germany and in Spain and this, in part explains their poor showing. Spain and this, in part explains their poor showing.

Critical Mass:Critical Mass:– E-business do not exist in isolation. They are the central part of a value 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 chain. On the supply side they rely on having a communications backbone and ICT suppliers who they can work with to distribute digital content. and ICT suppliers who they can work with to distribute digital content.

– On the demand side, the indigenous population must have the means and 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 the intent to consume whatever content is produced. It is also important that key industries such as financial sector, entertainment, education and health key industries such as financial sector, entertainment, education and health exist. If any of these components are missing the creative cluster is unlikely 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. to achieve critical mass eg in Italy the country consists of smaller industries. Here traditional sectors like publishing are undergoing a transformation, in Here traditional sectors like publishing are undergoing a transformation, in response to growing demand and a threat from non-Italian entrants.response to growing demand and a threat from non-Italian entrants.

– The implication is that a thriving cluster is based on external industry The implication is that a thriving cluster is based on external industry linkages being established and cultivated. Countries like Finland have linkages being established and cultivated. Countries like Finland have deregulated communications and media distribution industries meaning the deregulated communications and media distribution industries meaning the population, even in the remoteness of areas, has access to broadband. population, even in the remoteness of areas, has access to broadband. Alongside this, computers and other digital media are readily available, Alongside this, computers and other digital media are readily available, meaning there is little resistance to consuming digital content. Poland and meaning there is little resistance to consuming digital content. Poland and Spain are in the final stages of deregulation although neither country yet has Spain are in the final stages of deregulation although neither country yet has a high level of penetration of PC. a high level of penetration of PC.


The European Landscape (2)The European Landscape (2) Core companies:Core companies:

– Along with digital convergence comes consolidation. This occurs across industry Along with digital convergence comes consolidation. This occurs across industry levels and across national boundaries. Some smaller countries like Netherlands, levels and across national boundaries. Some smaller countries like Netherlands, Belgium and Denmark take advantage of this by allowing US and European Belgium and Denmark take advantage of this by allowing US and European media companies to work alongside their own indigenous operators.media companies to work alongside their own indigenous operators.

– The larger transnational European broadcast and media companies drive The larger transnational European broadcast and media companies drive demand. Core companies are vertically integrated and they link across Europe 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 and the world like a spider’s web. The core companies are critical to gaining market access.market access.

– This means a few European companies hold the key to gaining market entry. This means a few European companies hold the key to gaining market entry. Example Bonnier, a family owned Swedish company with 71 subsidiaries and Example Bonnier, a family owned Swedish company with 71 subsidiaries and extensive reach throughout the Nordic countries and Eastern Europe. extensive reach throughout the Nordic countries and Eastern Europe.

– The core companies are surrounded by a ring of specialist SME’s suppliers. In 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 effect the core companies use the innovation of the SME’s to devise and deliver new applications. new applications.

– For companies seeking to enter new (European) country markets, the choice For companies seeking to enter new (European) country markets, the choice exists to work either with the core companies or to form Strategic Business 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 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 core companies. Both stratgeies are designed to gian a foothold with the main market players and indicate the synergistic relationship that continues to exist market players and indicate the synergistic relationship that continues to exist between the smaller innovators and the larger distributors of digital content.between the smaller innovators and the larger distributors of digital content.


European Landscape (3)European Landscape (3) Cultural Adaptation:Cultural Adaptation:

– Localisation of content is endemic across Europe and Localisation of content is endemic across Europe and offers opportunities to make content and delivery offers opportunities to make content and delivery suitable for local groups of consumers. suitable for local groups of consumers.

– Licensing in and licensing out is closely associated Licensing in and licensing out is closely associated with partnering and joint ventures. Traditional with partnering and joint ventures. Traditional forms of “exporting” involve appointing forms of “exporting” involve appointing distributors or agents. These are lower priority distributors or agents. These are lower priority methods than the alternative peer-to-peer methods than the alternative peer-to-peer methods of entry. Whilst these may be common methods of entry. Whilst these may be common in Nordic countries, UK based cottish companies in Nordic countries, UK based cottish companies may be less inclined to use them. However it is may be less inclined to use them. However it is difficult for the uninitiated new entrant to devise difficult for the uninitiated new entrant to devise a “route maps” to forming alliances. a “route maps” to forming alliances.

– Strategically, the markets of southern Europe, offer the Strategically, the markets of southern Europe, offer the most opportunities. most opportunities.


Difficulties for Emergent industriesDifficulties for Emergent industries

Newly formed or reformed industries, created by Newly formed or reformed industries, created by technology innovations, shifts in relative cost technology innovations, shifts in relative cost relationships, emergence of new consumer needs relationships, emergence of new consumer needs or economic and social changes.or economic and social changes.– The rules are that there are no rules. The rules are that there are no rules. – The Environment:The Environment:

Technological uncertainty, strategic uncertainty, initial high Technological uncertainty, strategic uncertainty, initial high costs but steep cost reductioncosts but steep cost reduction

Adoption rates Buyers of emerging technology are Adoption rates Buyers of emerging technology are inexperienced. inexperienced.

Need to induce substitution, inform about functions and Need to induce substitution, inform about functions and overcome perceived risks.overcome perceived risks.

Short time planning horizonsShort time planning horizons

Porter, Competitive Strategy, Collier Macmillan Publishers, 1980, pp237 -253


Planning Problems For Early EntrantsPlanning Problems For Early Entrants

– Inability to secure supply lines & maintain qualityInability to secure supply lines & maintain quality– Escalation of material prices & labour costsEscalation of material prices & labour costs– Absence of infrastructure – channel, servicing, Absence of infrastructure – channel, servicing,

complementary productscomplementary products– Absence of standardisation and regulatory frameworkAbsence of standardisation and regulatory framework– Perceived likelihood of obsolescePerceived likelihood of obsolesce– Image credibility with Financial CommunityImage credibility with Financial Community– Response of (entrenched) companiesResponse of (entrenched) companies– Cost of FailureCost of Failure– Introduction of incentives to switch costsIntroduction of incentives to switch costs


Europe & ConvergenceEurope & Convergence

The potential size of the European The potential size of the European multimedia market is considerable, multimedia market is considerable, rivalled only by the USA and Japan. rivalled only by the USA and Japan.

Compared to most parts of the world, Compared to most parts of the world, Europe starts with good quality telephone Europe starts with good quality telephone networks and a high penetration of cable networks and a high penetration of cable television and personal computers. television and personal computers.

Europe has a strong tradition of public Europe has a strong tradition of public service broadcasting and produces some service broadcasting and produces some high-quality programming. high-quality programming.


Challenge of IntegrationChallenge of Integration Europe is a heterogeneous market in which almost every Europe is a heterogeneous market in which almost every

country has a different language which will make it difficult country has a different language which will make it difficult to develop pan-European multimedia applications. to develop pan-European multimedia applications.

Europe is a fragmented market in cultural terms and Europe is a fragmented market in cultural terms and developments in teleworking or electronic commerce may developments in teleworking or electronic commerce may well work out very differently in different countries. well work out very differently in different countries.

The regulatory and legal frameworks governing industries The regulatory and legal frameworks governing industries like telecommunications and broadcasting are different in like telecommunications and broadcasting are different in the various countries of Europe. the various countries of Europe.

The European Commission is very active in the fields of The European Commission is very active in the fields of telecommunications, broadcasting and the new multimedia telecommunications, broadcasting and the new multimedia and it has established an Information Society Forum to and it has established an Information Society Forum to examine the social implications of these developments. examine the social implications of these developments.

3. CRM & Integration3. CRM & Integration


E-CRME-CRM

The use of IT to provide customer interactions with The use of IT to provide customer interactions with reduced, human intermediation on the supplier reduced, human intermediation on the supplier side. eCRM consists of three elements:side. eCRM consists of three elements:– The use of direct-to-customer channels, principally The use of direct-to-customer channels, principally

email and Webemail and Web– Emerging channels such as WAP, intranets, portals and Emerging channels such as WAP, intranets, portals and

personalised management systemspersonalised management systems– Using IT to select relevant material to be presented to Using IT to select relevant material to be presented to

the customer, in terms of content, offers and support the customer, in terms of content, offers and support information.information.


Direct to Customer ChannelDirect to Customer Channel

(DTC) channels provides a means for (DTC) channels provides a means for customer-facing enterprises to communicate customer-facing enterprises to communicate with their customers more cheaply, with their customers more cheaply, instantaneously and repeatedly.instantaneously and repeatedly.

It acts as an enabler for automated systems, It acts as an enabler for automated systems, links clicked in emails, items viewed but not links clicked in emails, items viewed but not purchased in online stores etcpurchased in online stores etc


On-line IntegrationOn-line Integration One-to-One One-to-One

– Each company, buyer or seller treats each partner as a discrete entity and all Each company, buyer or seller treats each partner as a discrete entity and all communications and processes modelled accordingly. (Electronic Data Interchange communications and processes modelled accordingly. (Electronic Data Interchange (EDI)(EDI)

One-to-Many One-to-Many – Several SMEs can combine their purchase requirements with a view to increasing Several SMEs can combine their purchase requirements with a view to increasing

supply chain efficiencies— accomplished through more economical purchases. supply chain efficiencies— accomplished through more economical purchases. Virtual marketplace is needed. “infomediary”.Virtual marketplace is needed. “infomediary”.

Many-to-Many Many-to-Many – In an anonymous manner, a prospective SME buyer posts to a market a desired 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-to-requirement. The posting may be a simple “order”, or may include some engineer-to-order or make-to-order elements such as product specification or certification order or make-to-order elements such as product specification or certification requirements. requirements.

4. Peer-to-Peer4. Peer-to-Peer– Connections are like tunnels that were closed making each tunnel independent. Connections are like tunnels that were closed making each tunnel independent.

Peer-to-Peer has been called the ”Napsterisation of the supply chain”. This 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 technology did not need a central server. Each peer operates independently and in an open manner. White, 2003an open manner. White, 2003

4. Extranets4. Extranets


4. Intra & Extranets4. Intra & Extranets

An Intranet gives staff within a company An Intranet gives staff within a company the means to access company critical the means to access company critical information. information.

An extranet extends this access to An extranet extends this access to customers, suppliers and trade partners. customers, suppliers and trade partners. In effect extranets are a marketing tool In effect extranets are a marketing tool that develop the collaboration and that develop the collaboration and knowledge sharing aspect of intranet knowledge sharing aspect of intranet onto a new level.onto a new level.


Extranet ApplicationsExtranet Applications

1. Web-based Discussion Forums1. Web-based Discussion Forums 2. On-line Polls2. On-line Polls 3. Company Forms3. Company Forms 4. Policy & Procedure Manuals4. Policy & Procedure Manuals 5. Live Chat5. Live Chat 6. Phone Directory6. Phone Directory

ec10: l11 new media what it takes to build a successful venture team

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