The Breakfast Briefing event Wednesday 25 April 2012

How to Manage in Digital Markets

Dr Fiona Ellis-Chadwick Senior Lecturer in Retail Management

Twenty years ago today…..

Chapter 1 The Beginning

Fiona Ellis-Chadwick

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

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Chapter 7: Young Upstarts

Making it happen; young entrepreneurs:

Suleman Sacranie

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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

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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!

To fiona@ellis-chadwick.com

Fiona Ellis-Chadwick

Fiona Ellis-Chadwick

Thank you