Found by cksla on RB! Can you say WOW!!!
The Silicon Valley Business Model ð Part II
by James LaBoda, Evening MBA
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james.laboda@compuware.com
In last week's article, I focused upon the "next-generation" management models that Silicon Valley high-tech companies have developed over the last decade. In my discussion, I utilized a book titled Silicon Gold Rush, written by Ms. Southwick of Upside Magazine and book publications. Specifically, I focused upon her "Ten Commandments For Next-Generation Businesses". I would like to continue with this discussion focusing upon "Next-Generation Business Commandments" six through ten. Technology companies in Silicon Valley were among the first to innovate the concept of "customer-oriented" product design.
"The customer, not the technology is #1". When I first read this statement, I thought that this was a rather intuitive concept to grasp. As an e-Commerce Consultant, I am consistently confronted with clients seeking my advice on how to develop Web-centric commerce sites that are designed with the customer's priorities as the focus. Although this is a relatively common aspect in today's technology focused business models, the past decade ushered in this now "common" business requirement among Web-centric businesses. But where did it come from?
Michael Dell was an innovator among his peers. How did Michael Dell achieve this distinction? He was the first to implement a commerce Web application that was "entirely focused" upon the customer. His technology company not only achieved great success at designing PCs that customers desired, but he was capable of building his customer base by giving the customer "exactly what they wanted". This sounds simple enough to most business managers. However, the concept was radical back in the early 1990's. Dell Computer Corporation was capable of designing a JIT (Just In Time) manufacturing process by "listening" to the consumer through primitive implementations of CRM (Customer Relationship Management) tools. By implementing the technology and business models for customer-centric commerce sites, Dell Computer was able to establish itself as a leader and innovator in the e-Commerce marketplace through "Next-Generation" business management strategies.
"Find the right partners, mergers, and acquisitions". This "Commandment" has been especially developed and refined by the Silicon Valley high-tech companies over the last decade. Due to the rapid growth of technology, high-tech companies are forced to consistently examine avenues to proliferate their business model. Many of these avenues involve partnering, merging, and acquiring other companies in order to stay competitive in the dynamic technology markets. One such company that is currently implementing this strategy is a company called e.Digital. This company is involved with design and development of software to manipulate flash memory in handheld devices. By the end of this year, handheld devices will be outselling the PC. e.Digital is positioned beautifully to maximize gains in these emerging markets. How did they position themselves to take advantage of such possibilities? e.Digital was able to establish partnerships with companies i.e. IBM, Intel, Lucent Technologies, and Texas Instruments to name a few. These companies were able to assist e.Digital in developing and implementing their business model through avenues that e.Digital did not have prior to their partnerships.
"Embrace the unknown". This statement is a defining factor in how high-tech companies must operate in order to stay competitive and nimble in these dynamic technology markets. During my years as a Technology Consultant, I have seen this principle implemented continuously with high-tech companies. As Ms. Southwick states, "Even as you're mining your own claim, be ready for the next gold rush, which could occur in an entirely unexpected place." A company that is currently implementing this strategy is Intel Corporation. Intel has for years been known as "Intel Inside". They were capable of building their business and brand name through their association with the Intel Pentium processors inside PCs. However, Intel has currently been "embracing the unknown" in respect to their future technology strategy. What exactly is Intel strategizing for the future? In the last 6 months, Intel has been announcing its strategy for the wireless world, which is quickly becoming the focus among not only high-tech companies, but non-technology companies as well. Intel has recognized that the high-tech business will be changing shortly and has "embraced" this idea and is positioning itself to exploit these emerging marketplaces.
"Be Paranoid". This is a statement that I preach over and over to the clients that seek my advice on e-Commerce, e-Business, and wireless technologies. As soon as a company has established itself as the "leader" within a respective technology "niche", competition will flood almost over-night. The beauty of technology is that the rapid innovation and dynamic aspects results in opportunities for competitors to gain entrance into a market quickly. The downside of technology is that the rapid innovation and dynamic aspects results in opportunities for competitors to gain entrance into a market quickly. I believe that Ms. Southwick made a very logical statement in her book by stating that "Know that as soon as you innovate a successful product, you will face a horde of aspiring competitors and must be prepared to act."
"Be a speed demon and don't be squeamish". The ability for management to react in the rapid technology markets is the key ingredient for establishing success within the organization. Technology created the need for management to redefine its techniques and practices in order to remain competitive and meet the growing needs of the consumers in the marketplace. Without adjusting to these changing factors, companies would become insignificant in their respective technology "niches" and hence be put out of business. "Ultimately, what keeps a company going is the vision to cope with speed of market change, technological advances, and emerging business opportunities." What I have found fascinating in todays' technology-centric companies, is that these companies have organized talented IT staffs where the traditional corporate "boundaries" are no longer in place. Individuals are allowed to create business plans for managers even though they are technical. Management is becoming capable of identifying technology trends with the help of technical individuals. Essentially, a line that was once defined between the technology staff and management is now "blurred" and the results appear to be astonishing for all
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Thanks Bob!!!!!! |
