Tag Archive for business and economics

David Beats Goliath with a Rock (Solid Approach to Market Entry)

I recently received some great feedback on my University of Maryland Doctorate of Management paper on “Globalization and the Small-to-Medium Enterprise (SME).”

Despite many challenges, I argue that there remain some tremendous opportunities for SMEs to gain market entry in a global environment through alliances, virtual organizations, and symbiotic relationships with other companies both large and small. At the end of the paper, I included an interview with Ian Bothwell of Rover Technologies, a technology-based SME.

Here’s some of the good advice Ian passed along regarding how to launch technology-based products and services in a global marketplace.

Play the Field: Market in More Than One Segment

“The ability to market your technology to more than one segment is valuable. Multiple segments implies the potential to also scale in a larger market, while the risk of failure is reduced in any one segment. However, switching segments is usually not practical very early in the market entry process, primarily because customer acquisition and product customization costs can be prohibitive.”

Horses for Courses: Find the Right Niche

“A scaling strategy in the face of an established market is extraordinarily difficult, in terms of differentiating oneself and establishing presence and credibility. For SMEs scaling is predicated on finding useful niches and entering with an attractive price/performance and matching customer needs. In Phase Two, upsell the early adopters.”

Jack Be Nimble: Use Size to Your Advantage

“The primary advantage an SME has is its size. There is no market too small or any customer too unattractive. Its agility and willingness to take risks makes it a potent market force. For technology-based products and services, this advantage means being able to adapt to diverse customer needs without incurring significant additional development, testing, or market validation costs. This requires an inherently ‘flexible’ product that can be customized rapidly, easily, and at low ‘delta cost.’”

Pipe Dream: Rapidly Introduce New Products/Upgrades

“In order to scale in a segment, while sustaining first-in-class momentum, you must introduce product improvements in a rapid tempo, usually more than once a year. This calls for a fundamentally superior design concept and flawless execution by the product team. A useful concept here is product line architecture (PLA), which has become the rage with large enterprises in their drive to eke out efficiencies.”

Triumph of the Commons: Design for Rapid Product Evolution

“A well-designed product line embeds a superior design of sufficient abstraction and commonality that it allows for the assembly of a majority of ‘common’ elements along with a small number of unique variations—to yield rapid development of a range of product forms. R&D advances fed into the pipeline allow for variations to take advantage of these technologies first before they are incorporated into the enterprise. This provides a viable implementation framework for a large range of products prior to the market entry of even the first one! Synergistically designed software and hardware provide a powerful foundation for an affordable and efficient PLA to leverage an SME’s agility in order to make a big market impact.”

Fully Baked: Design Agnostic Hardware

“Hardware design needs to be device agnostic to allow for significant upgradeability for emerging technologies that are as yet undefined. Similarly, scalability has to be ‘baked-in’ at the outset, since the PLA supports different products with widely different scaling needs. The use of standard interfaces allows for interoperability of different classes of devices, opening the door to a variety of application concepts with the same hardware framework.”

Reading the Future: Use Services-Based Software

“Software design needs to mirror the abstraction of peripheral devices. Core software design must generalize these device constructs using a meta-framework to define and model them, to allow software to understand device types yet to be developed. A services-based software framework can encapsulate various aspects of product-related functions and allow the development of common and unique services.”

No More Dump ‘n’ Chase!

Dump ‘n’ Chase: An offensive strategy in ice hockey in which a team shoots (or “dumps”) the puck into the attacking zone and aggressively pursues it in hopes of retrieving possession and setting up a scoring chance. Most effective for teams with enough speed and size to force opposing defensemen off the puck. The strategy is often disparaged by broadcasters as lacking in creativity or entertainment value.

Another thought from my doctoral essay analyzing Daniel Bell’s The Coming of the Post-Industrial Society: A Venture in Social Forecasting has to do with how Bell’s grand ideas can be applied at the level of business development and transformation.

Bell’s example teaches us that when dealing with today’s highly complex, highly integrated business and economic issues, we may need to think in terms of ontologies rather than strict categories or taxonomies. I see the grand idea of his book as this—our economy has shifted away from manufacturing (analogous to the mechanical, Newtonian, Euclidean) toward a knowledge economy (ontological, quantum, non-Euclidean) and that we must understand how this shift affects and informs society, business, and ways of thinking.

In his book, Bell shies away from offering a new grand plan for how to operate or think in the knowledge economy. His paradigm shift is actually an invitation to consider new perspectives and to “think outside the box” as the business cliché goes!

An analogy from ice hockey, a sport I have played and coached. There are two prominent team approaches in this sport—systems/tactics and concepts. Those who cannot think in the abstract or lack inherent talent must play using systems/tactics, and the most notorious and artless of these is “dump ‘n’ chase.”

Beyond this tactic, there are complex playbooks that lay out plays to be memorized by a team. During a memorized play, each player is equally important to the team’s success as a whole, and if one player forgets his/her role (“Oh, I was supposed mark THAT player?!”), the model fails and it’s 0-1!

However, teams that play using the concept approach allow the natural ability and communication of the players to set the tone. Skills are still important but they are inherent to these advanced players. There can be components and inconsistencies, but this team is more likely to win because an opposing team that plays by systems/tactics can’t adjust and defend again the unpredictable nature of concepts.

(A colleague tells me there’s a similar analogy for soccer fans. Think “kick ‘n’ rush” tactical soccer found in Europe’s lower divisions versus the “total football” conceptual approach favored by the “soccer is an art form” teams such as Barcelona, Bayern Munich, and Arsenal.)

My point is that those who play by systems alone—whether a hockey or soccer team or a business—will never grow beyond a certain level. Those who use structure as a means to organize but at the same time apply concepts to see the bigger, complex picture use a winning combination for today’s technological environment.