Posts tagged business
Have breakfast … or … be breakfast!
Feb 12th
BY Y. L. R. MOORTHI
[Management Views from IIMB is an exclusive column written every two weeks by faculty members of the Indian Institute of Management, Bangalore]
[This very good article was forwarded to me by one of my friends and original article is found on http://www.iimb.ernet.in/node/1820]
Who sells the largest number of cameras in India?
Your guess is likely to be Sony, Canon or Nikon. Answer is none of the above. The winner is Nokia whose main line of business in India is not cameras but cell phones.
Reason being cameras bundled with cellphones are outselling standalone cameras. Now, what prevents the cellphone from replacing the camera outright? Nothing at all. One can only hope the Sonys and Canons are taking note.
Try this. Who is the biggest in music business in India? You think it is HMV Sa-Re-Ga-Ma? Sorry. The answer is Airtel. By selling caller tunes (that play for 30 seconds) Airtel makes more than what music companies make by selling music albums (that run for hours).
Incidentally Airtel is not in music business. It is the mobile service provider with the largest subscriber base in India. That sort of competitor is difficult to detect, even more difficult to beat (by the time you have identified him he has already gone past you). But if you imagine that Nokia and Bharti (Airtel’s parent) are breathing easy you can’t be farther from truth.
"What Apple did to Sony, Sony did to Kodak, explain?" Sony defined its market as audio (music from the walkman). They never expected an IT company like Apple to encroach into their audio domain. Come to think of it, is it really surprising? Apple as a computer maker has both audio and video capabilities. So what made Sony think he won’t compete on pure audio? So also Kodak defined its business as film cameras, Sony defines its businesses as "digital."
In digital camera the two markets perfectly meshed. Kodak was torn between going digital and sacrificing money on camera film or staying with films and getting left behind in digital technology. Left undecided it lost in both. It had to. It did not ask the question "who is my competitor for tomorrow?" The same was true for IBM whose mainframe revenue prevented it from seeing the PC. The same was true of Bill Gates who declared "internet is a fad!" and then turned around to bundle the browser with windows to bury Netscape. The point is not who is today’s competitor. Today’s competitor is obvious. Tomorrow’s is not.
Hiding behind all these wars is a gem of a question – "who is my competitor?"
In 2008, who was the toughest competitor to British Airways in India? Singapore airlines? Better still, Indian airlines? Maybe, but there are better answers. There are competitors that can hurt all these airlines and others not mentioned. The answer is videoconferencing and telepresence services of HP and Cisco. Travel dropped due to recession. Senior IT executives in India and abroad were compelled by their head quarters to use videoconferencing to shrink travel budget
So much so, that the mad scramble for American visas from Indian techies was nowhere in sight in 2008. (India has a quota of something like 65,000 visas to the U.S. They were going a-begging. Blame it on recession!). So far so good. But to think that the airlines will be back in business post recession is something I would not bet on. In short term yes. In long term a resounding no. Remember, if there is one place where Newton’s law of gravity is applicable besides physics it is in electronic hardware. Between 1977 and 1991 the prices of the now dead VCR (parent of Blue-Ray disc player) crashed to one-third of its original level in India. PC’s price dropped from hundreds of thousands of rupees to tens of thousands. If this trend repeats then telepresence prices will also crash. Imagine the fate of airlines then. As it is not many are making money. Then it will surely be RIP!
India has two passions. Films and cricket. The two markets were distinctly different. So were the icons. The cricket gods were Sachin and Sehwag. The filmi gods were the Khans (Aamir Khan, Shah Rukh Khan and the other Khans who followed suit). That was, when cricket was fundamentally test cricket or at best 50 over cricket. Then came IPL and the two markets collapsed into one. IPL brought cricket down to 20 overs. Suddenly an IPL match was reduced to the length of a 3 hour movie. Cricket became film’s competitor. On the eve of IPL matches movie halls ran empty. Desperate multiplex owners requisitioned the rights for screening IPL matches at movie halls to hang on to the audience. If IPL were to become the mainstay of cricket, as it is likely to be, films have to sequence their releases so as not clash with IPL matches. As far as the audience is concerned both are what in India are called 3 hour "tamasha" (entertainment). Cricket season might push films out of the market.
Look at the products that vanished from India in the last 20 years.When did you last see a black and white movie? When did you last use a fountain pen? When did you last type on a typewriter? The answer for all the above is "I don’t remember!" For some time there was a mild substitute for the typewriter called electronic typewriter that had limited memory. Then came the computer and mowed them all. Today most technologically challenged guys like me use the computer as an upgraded typewriter. Typewriters per se are nowhere to be seen.
One last illustration. 20 years back what were Indians using to wake them up in the morning? The answer is "alarm clock." The alarm clock was a monster made of mechanical springs. It had to be physically keyed every day to keep it running. It made so much noise by way of alarm, that it woke you up and the rest of the colony. Then came quartz clocks which were sleeker. They were much more gentle though still quaintly called "alarms." What do we use today for waking up in the morning? Cellphone! An entire industry of clocks disappeared without warning thanks to cell phones. Big watch companies like Titan were the losers. You never know in which bush your competitor is hiding!
Future is scary! The boss of an IT company once said something interesting about the animal called competition. He said "Have breakfast …or…. be breakfast"! That sums it up rather neatly.
Success is not something to wait for; it’s something to work for…
A Practical Guide to Managing Innovation – By Robert Goldsmith
Jan 25th
Re-publishing from Forbes.com (Original link).
What does innovation mean?
It used to relate mainly to products, and that’s still important. But over the last decade or so, businesses have been putting more and more emphasis on innovating new services and business models as well. In light of this, it’s time companies take another look at how they manage innovation.
Innovation is one of the least well-managed areas in most companies,says David Midgley, a marketing professor at INSEAD and author of The Innovation Manual. “This leads to wasted resources and costly mistakes. It’s not the effort that companies put into innovation that decides success. Instead it is how firms go about doing innovation that separates leaders from the rest.”
Most of the information about managing innovation available today is siloed, addressing specific issues such as technology or finance. But as the boundaries of innovation expand, more managers will need practical knowledge and tools that transcend these functional silos.
More than good electronics
In addition to providing this practical knowledge and the toolkit to go with it, The Innovation Manual examines what is known about innovation management and asks if it still applies today when an innovation may indeed be a product, but a product with a service attached and driven by a totally different business model than a few years before.
To illustrate this idea, Midgley uses the example of the Apple iPod. Apple has sold hundreds of millions of iPods since introducing them in 2001. But, he says, that success is not because the iPod is an innovative product as there are many similar devices. The real point behind the iPod is the service that allows the customer to easily download music and the business model that allows both Apple and the music industry to make money from those downloads.
“Apple negotiated a business model with the music industry that allowed everybody to get what they want — the music industry to get their royalties, Apple to sell downloads and the iPod itself, and the customer to be able to select the songs they want rather than putting up with the compilations the industry offered because of its previous business model,” Midgley says. “These are Apple’s real innovations – the rest is just good electronics.”
No longer simple
Back when innovation related only to products, it was easier for companies to manage. One group of employees designed the product and passed it on to another group who sold it. But the broader boundaries of innovation have complicated things for company managers responsible for delivering innovations to the marketplace.
Implementing an innovation today may require making major organisational changes. For example, implementing an innovative service could mean making changes to employee training programmes and company procedures. A business model innovation entails getting everyone to understand the new way of making money, or, if this is not possible, setting up a new business unit.
To understand what sort of organisational changes are required for an innovation, a manager first needs to understand what sort of challenge the innovation is going to pose. For Midgley, there are three categories of challenge – the customer, technology, and business model. Understanding which category the innovation falls into is the key to understanding what steps the company needs to take next.
“If it’s a customer challenge, then you need to orient your intelligence and services one way,” Midgley explains. “If it’s a challenge on the organisational side, then it’s another way. If it’s a breakthrough in all three then you might want to think it’s a big risk.”
The customer challenge addresses how far away this innovation is going to be from the way the customer usually thinks. For example, Nintendo designed the Wii video game console to appeal to an entirely new customer base, namely people who wouldn’t ordinarily think of playing electronic games.
“What’s interesting in the Wii is not the technology, which is fairly straightforward,” says Midgley, “and it’s not the business model, because it’s actually quite a traditional business model for the gaming world. The really innovative and creative thing is making games that appeal to the grandmothers, or to families or the people who don’t play ‘shoot-‘em-up games’ on PS3 (PlayStation 3).”
The second type, technology, asks how much of a challenge the innovation is going to be for the organisation. The PS3 posed a typical technology challenge for Sony because the company was inventing a new superprocessor for their existing game console and customer base. The business model challenge addresses how the company can get money out of the existing value chain. This is what Apple overcame with the iPod.
The beginning is the end
The ultimate goal of any innovation is to create value in the minds of the customers. Midgley identifies five key tasks the organisation needs to do to accomplish this and provides the tools for managers to use to accomplish the tasks.
The first task is organisational and involves setting the direction and fixing the rules for implementation. The second is setting up the team. Teams are key to success, so the firm needs to select the most appropriate team for the type of innovation.
Task three involves working with customers as co-creators. “You get much more mileage by working with the right customers at the right time than by suddenly popping up and saying: ‘Here’s our bright and shiny new thing, how do you like it?’” Midgley says.
Once the goal has been defined, the right team selected, and a solution defined that meets a strong customer need, the fourth task is to make the necessary organisational changes to deliver the solution. This is especially true for service or business model innovations.
The fifth task is to build momentum in the market for the solution. Managers need to design and create markets for innovations with a thorough understanding of how customers accept or reject them, which is something companies don’t always do right.
For example, the personal digital assistant (PDA) was a highly innovative product which flopped when it was first introduced by Apple, Tandy and Motorola. These companies didn’t choose the right target customer to get the market moving, nor did they understand how these customers would get best value out of the innovation. As a result, all three companies ended up emphasizing the wrong features of the product.
Palm then introduced essentially the same product but, by studying how their customers would use it, the company was able to market a feature with a strong customer appeal. In the end, their highly successful version of the PDA sold in the millions.
By Robert Goldsmith
For more on the Innovation Manual, go to: www.theinnovationmanual.com
[This article is republished courtesy of INSEAD Knowledge http://knowledge.insead.edu Copyright INSEAD 2008]
Original Forbes.com link is available here.
Technology for business .. or vice versa?
May 8th
This is the post I recollected from my very very early days of blogging (read year 2003) and was in response to one of the debates we had in our group of office colleagues.
I guess pretty much I said that time about 6 years ago looks rubbish to me now anyways .. however I guess there are still a few valid points 
So here is how I went on my old blog.
Technology for Business
Some Cons against "Technology for Experiment" ….
- Industry is never driven by only "Technology". The needs of the business generates the need for "Technology". So, lets first identify the facts of business, so called " Business Verticals" and divide the tasks for those verticals rather than the "Technology Horizontals".
- The industry is continuously changing, becoming more cautious about the spending and cost/benefit analysis for the organizations.
- The time has gone when the companies use to spend lots n lots of dollars just to change the look n feel of some of their useless sites just for the sake of "New Technology Adoption".
- The expectations of the business from the IT companies have grown up to very high standards because of very competitive market and clear division of the market on the basis of the "Business Verticals".
- Technology is a "Short Living" thing. On an average a technology becomes old within first 3 months of its origin.
- The real challenge lies in "Foresight" predicting the way the IT will go in next say 5-10 years and act accordingly.
- Only "Technology" really lacks in attracting more business now a days. e.g. A "beverage" organization will think twice before implement an XML standard even if you have done some significant work for some "finance sector" client, but on the other hand if we stick to the vertical then its not a big deal to attract more and more clients, at least through something called "Domain Experience".
- The market is globally getting very tough and only the "Survival of the Fittest" is the only thing that is fact.
- Admit the fact that a company can not compete and win a project against another one who is working in a particular domain for say last 5 years. e.g. Company A is technically very very sound. Company B is comparatively not so much but company B is very strong in its (say) Finance domain and working for it since last 5-6 years. Both are bidding for a Finance client…… you are intelligent enough to guess who is the ultimate winner.
- Finally if you feel we are not intelligent enough to judge the battle. Look for the giants like "SAP", "Microsoft", "IBM" are doing to their products. Every giant has a product for a business verticals and virtually admitting that the industry is getting split vertically.
Some Pros for the "Technology" ..
- Technology keeps the industry live.
- Despite of various things it is still a fact that over 100 companies are still alive only because someone like Microsoft or IBM are developing more technologies and relative products.
- Technology keeps your knowledge grow at a fast pace (I have used a word Knowledge and that does not mean Business).
- Finally Its really a fun learning new technologies…..
Might have been an interesting debate really. Do not recollect enough as to what made me write this but looking at this … must have been a fun !
Cheerio
Dilbert on corporate hierarchy ..
Apr 28th
While stumbling on internet I found a very good Dilbert cartoon that actually reflects the reality within the corporate hierarchy and thought of sharing here ..
So here you go,
** Click on the image to see larger one !
Protectionism of economy.. continued
Mar 10th
I wrote my thoughts yesterday on how the economic protectionism could come back and harm the economy in the long term and I did put a comment on Sramana Mitra’s blog about this to request her comment. She has been kind enough to respond back and point me to one of her earlier blog article on Forbes.com that talks about Perilous Protectionism.
One particular impact she states in her article was about the eventual cost increase if the outsourcing to other countries were to stop. She has also given an example of how Motorola will find it difficult to keep the prices of its cellphones down, if its been forced to operate in the US only region for manufacturing its goods.
I would recommend a read on this article who wants to know more on this topic.