How to Manage in Digital Markets Dr Fiona

How to Manage in Digital Markets Dr Fiona Ellis-Chadwick Senior Lecturer in Retail Management The Breakfast Briefing event Wednesday 25 April 2012

Chapter 1 The Beginning Twenty years ago today…. . Fiona Ellis-Chadwick

Chapter 2 -Trail blazers Compuserve CIS Netscape – web browser Leading internet companies… were making claims that: “by 1997, 5% of all retail spending in England, Scotland 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” Aol - GIS Alta vista – search engine Pipex Dial NSP The WELL – virtual community CDnow – retailer Demon – NSP IE - web browser Webvan – home delivery Fiona Ellis-Chadwick Tesco. com- retailer

Chapter 3 the end of the beginning But what was the fate of each these companies? The Well ? y Bankruptcy Web. Van Closed – by-Amazon AOL & Time Warner. Acquisition Alta Vista Merged with Talk Cable Hostile takeover by. Talk then disappeared and Wireless h W Survivors Fiona Ellis-Chadwick

Chapter 4 New horizons Take over the high street Promises and predictions became drives …………… Replace the middle man Pirate the value chain Enter new markets Leverage rapid growth Perfect competition Take on market leaders on a level playing field 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. What did the following people have in common? Stelios Haji-Ioannou Jeff Bezos Pierre Omidyar Steve Jobs Fiona Ellis-Chadwick Passion + Commitment + Vision = Deliverance

Chapter 7: Young Upstarts Making it happen; young entrepreneurs: Suleman Sacranie Fiona Ellis-Chadwick

Chapter 8: Hard Core - overview Factors affecting success come from different sources Managerial influences Market influences Relative advantage Doherty & Ellis-Chadwick, [1999, 2003, 2010. ] Fiona Ellis-Chadwick

Chapter 9: Hard Core – detail 1 Managerial Influences 4. 3. 1. 1. Positive influences. This group of factors (1, 2, 3, 4, 6, and 7) is characterised by a fairly steady rise in mean values from ‘nonadopters’ to the adoption of an ‘active website’. The implication of this pattern is that these six factors all exert a positive influence on an organisation ’s adoption of the Internet. Consequently, as an organisation makes progress in the adoption of an ‘active website’, there is an increasing recognition of the importance and influence of factors, such as the availability of an appropriate ‘infrastructure and development capability ’ and an ‘Internet strategy’. 4. 3. 1. 2. Negative influences. Two of the factors, ‘cost of Internet trading’ and ‘consumer sensitivity’ are exerting a negative influence. It can be seen that there is a steady decline in mean values from ‘nonadopters’ to ‘active website’. The implication of this pattern is that both these factors have strongly influenced the ‘nonadopters’ to refrain from investing, but the influence of the cost of Internet trading and consumer sensitivity gradually weakens as an organisation progresses to an ‘active website’. 4. 3. 1. 3. Variable influences. One of the nine significant factors, ‘Internet communications ’, displays a distinctly different pattern to the others. While its influence rises steadily from the ‘nonadopter’ to the ‘active planning ’ phase, it then starts to decline as the organisation progresses through ‘active development ’ to ‘interactive website ’. The implication of this is that while the Internet ’s ability to facilitate communications strongly influences an organisation to commence an Internet project, once the project is underway, its perceived importance gradually diminishes. Fiona Ellis-Chadwick Strategy Leadership style Resources Capabilities Targeting, segmentation and positioning strategy + = leads to success = leads to failure +/- = unpredictable outcome

Chapter 10 : Hard Core – detail 2 Market influences: Digital market place Customer behaviour/experiences Competition – local and global Pace of technological change Fiona Ellis-Chadwick Nick Wheeler founder of Charles Tyrwhitt

Chapter 11: Hard core- detail 3 Relative advantage: 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 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…

Chapter 12: Social Media: an Opportunity or a threat? What’s the relative advantage of Social Media? Tweeting for a businesses Fiona Ellis-Chadwick

Chapter 13: The Future High street is under threat So what has become of the early predictions and drivers? Pirates and cannibals A radical new market place Exponential growth A level playing field Fiona Ellis-Chadwick X

Chapter 14: The beginning of the end (of this presentation) 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. Strategic thinking in the digital age requires: Clarity of purpose Understanding of the market Analysis of Relative advantage of the technology Releasable goals Effective implementation Fiona Ellis-Chadwick

Postscript: Buy the books and read the research Latest Books: Recent papers: 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 Fiona Ellis-Chadwick

PPS: The End? Universal solutions and plans to take over the world begin here ………………… rd tca s s wer An Fiona Ellis-Chadwick on pos a ! To fiona@ellischadwick. com

Thank you Fiona Ellis-Chadwick