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The Breakfast Briefing event Wednesday 25 April 2012
How to Manage in Digital Markets
Dr Fiona Ellis-Chadwick Senior Lecturer in Retail Management
Leading internet companies…
Chapter 2 -Trail blazers Compuserve CIS
Aol - GIS
Pipex Dial NSP
Demon – NSP
IE - web browser
Tesco.com- retailer
Netscape – web browser
Alta vista – search engine
The WELL – virtual community
CDnow – retailer
Webvan – home delivery
were making claims that:
“by 1997, 5% of all retail spending in England, Scotland and Wales will be done over the net” (Computing 1996); “By the year 2005 it will capture between 8 and 30 per cent of the UK retail market”
Fiona Ellis-Chadwick
But what was the fate of each these companies?
Chapter 3 the end of the beginning
Closed – Alta VistaBankruptcy - WebVanMerged with Talk TalkHostile takeover by Cable
and Wireless
Acquisition by AmazonAOL & Time Warner- then disappeared
Survivors
The Well
Why ?
Fiona Ellis-Chadwick
Take over the high street
Chapter 4 New horizons
Take on market leaders on a level playing field
Replace the middle man
Pirate the value chain
Enter new markets
Leverage rapid growth
Perfect competition
Promises and predictions became drives ……………
Source http://mariacalinescu.eu/ebusiness/internet-a-market-with-perfect-competition/
Fiona Ellis-Chadwick
Chapter 5: 50/50; phone a friend or ask the audience? When you arrived you
were asked to answer 3 questions:
1) What is the vision that drives the online part of your business ?
2) What is the key message you want visitors to receive (in the first 3 seconds) when they arrive on your home page?
3) How do you realise 1) and implement 2)?
Fiona Ellis-Chadwick
Chapter 6 Creative thinkers.
Passion + Commitment + Vision = Deliverance
What did the following people have in common?
Steve Jobs
Jeff Bezos
Stelios Haji-Ioannou
Pierre Omidyar
Fiona Ellis-Chadwick
Chapter 7: Young Upstarts
Making it happen; young entrepreneurs:
Suleman Sacranie
Fiona Ellis-Chadwick
Factors affecting success come from different sources
Chapter 8: Hard Core - overview
Fiona Ellis-Chadwick
Doherty & Ellis-Chadwick, [1999, 2003, 2010.]
Managerial influences
Market influences
Relative advantage
Managerial Influences
Chapter 9: Hard Core – detail 1
Capabilities
Resources
Leadership style
Targeting, segmentation and positioning strategy
Strategy4.3.1.1. Positive influences. This group of factors (1, 2, 3,4, 6, and 7) is characterised by a fairly steady rise in meanvalues from ‘nonadopters’ to the adoption of an ‘activewebsite’. The implication of this pattern is that these sixfactors all exert a positive influence on an organisation’sadoption of the Internet. Consequently, as an organisationmakes progress in the adoption of an ‘active website’, there isan increasing recognition of the importance and influence offactors, such as the availability of an appropriate ‘infrastructureand development capability’ and an ‘Internet strategy’.4.3.1.2. Negative influences. Two of the factors, ‘cost ofInternet trading’ and ‘consumer sensitivity’ are exerting anegative influence. It can be seen that there is a steadydecline in mean values from ‘nonadopters’ to ‘active website’.The implication of this pattern is that both these factorshave strongly influenced the ‘nonadopters’ to refrain frominvesting, but the influence of the cost of Internet tradingand consumer sensitivity gradually weakens as an organisationprogresses to an ‘active website’.4.3.1.3. Variable influences. One of the nine significantfactors, ‘Internet communications’, displays a distinctlydifferent pattern to the others. While its influence risessteadily from the ‘nonadopter’ to the ‘active planning’phase, it then starts to decline as the organisation progressesthrough ‘active development’ to ‘interactive website’.The implication of this is that while the Internet’sability to facilitate communications strongly influences anorganisation to commence an Internet project, once theproject is underway, its perceived importance graduallydiminishes.
Fiona Ellis-Chadwick
+ = leads to success
-= leads to failure
+/- = unpredictable outcome
Market influences:
Digital market place
Customer behaviour/experiences
Competition – local and global
Pace of technological change
Chapter 10 : Hard Core – detail 2
Nick Wheeler founder of Charles Tyrwhitt
Fiona Ellis-Chadwick
Relative advantage:
Chapter 11: Hard core- detail 3 Digital technologies provide amazing
opportunities but companies which successfully create competitive advantage are those with leverage relative advantage rather than taking finding a digital solution at any cost…
Successful companies use digital technology to:
create opportunities to serve their markets better
Improve the financial potential of their operations
Create innovative marketing opportunities
Fiona Ellis-Chadwick
Chapter 12: Social Media: an Opportunity or a threat?
Tweeting for a businesses
What’s the relative advantage of Social Media?
Fiona Ellis-Chadwick
So what has become of the early predictions and drivers?
High street is under threat
Pirates and cannibals
A radical new market place
Exponential growth
A level playing field X
Chapter 13: The Future
Fiona Ellis-Chadwick
Chapter 14: The beginning of the end (of this presentation)
Strategic thinking in the digital age requires:
Traditional business models have been turned over. Leading dot coms have created markets by giving away their core products;
in less than 15 years Google has moved from start-up to multi-billion dollar global corporation.
Clarity of purpose
Understanding of the market
Analysis of Relative advantage of the technology
Releasable goals
Effective implementation
Fiona Ellis-Chadwick
Latest Books: Ellis-Chadwick, F, and Doherty, NF (2011) 'Web advertising: The role of e-mail marketing', Journal of Business Research, available online 5 February.
Doherty, NF, and Ellis-Chadwick, F (2010) 'Internet retailing: the past, the present and the future', International Journal of Retail & Distribution Management, vol. 38, no. 11/12, pp. 943-965.Accessible at:
Doherty, Neil F. and Ellis-Chadwick, Fiona (2009). Exploring the drivers, scope and perceived success of e-commerce strategies in the UK retail sector. European Journal of Marketing, 43(9/10), pp. 1246–1262.
Available at: The Open University Research Repository
Postscript: Buy the books and read the research
Recent papers:
Fiona Ellis-Chadwick
Universal solutions and plans to take over the world begin here …………………
PPS: The End?
Answers on a
postcard!
Fiona Ellis-Chadwick