FINAL ASSIGNMENT
THE EXAMPLE OF "FACEBOOK"
It’s true that business innovation coming from within the company itself has been challenged or “disrupted” by new trends or shifts driving new business models.
Nowadays, the competition is harsher and not easy to be determined. The competitors are not distinguishable any more and many business industries are facing the problems linked to the birth of new business models going on the same path as the new technologies in order to attract and satisfy more costumers. Let’s say they are beating some existing business models and gaining their costumers. The life cycle of various products and industries are varying; some of them become shorter and others longer. Those which the life cycle has become shorter did not know how to survive in the market and face the new competitors. Those who had succeed to survive and to extend their life cycle knew that they have to review their strategies. By reviewing and making better their development strategies some businesses can solve competition problems but for a certain period of time. In order to keep attracting people and making loyal the existing costumers the business must keep in touch with the evolution of the market, of the technology and especially the consumer behaviour and needs. The strategies should be regularly refreshed and updated.
We are living in a world of changes. Changes happen every day, everywhere and in all the areas and industries. All this changes are giving new features to the behaviour of the modern consumer and his needs and requirements.
In my eyes, the biggest trend that I also consider as a shift is the internet. But internet is a very large topic with undetermined new services and ideas. In the internet industry we assist to the birth of many trends which try to satisfy the newly created social, professional or personal needs!
When I red the subject of this assignment I had in mind “facebook”. Certainly, all of us know or have heard about this new kind of social networking.
In few words, Facebook is a social platform connecting people with other people specially friends. At the beginning it was a network gathering the students of Harvard University and by the way the founder of the site and its current CEO was a Harvard student; Mark Zuckerberg. Quickly, the site was expanded to other American universities and became worldwide known end 2006 beginning 2007. Everybody could join the network and enjoy its utilities!
The concept does not seem very profitable but if we go a bit deeper into the details of the services it provides we can see many revenue streams.
By joining facebook each member has the majority of the modern communication means in order to keep in touch with his outside world; friends, professional or no professional networks. With its various features facebook offers the possibility to build the image that everyone wants to communicate to the others (information, photos, taste…). all this information were used by facebook and its partners to provide the appropriate products through a “personalized marketing” based on all the person details provided in the site. This kind of marketing was considered very efficient because it does not attack and harass directly the guest; it’s introduced through the networks that the user chooses to accept or not the membership. And through the several networks formed everyday we can find people having same movie taste or same shopping ideas…..
In addition facebook offers more developed services providing very important and interesting statistics for example: by doing a simple poll in a certain area of what is your favourite soft drink? The results obtained could be of a great help for the drinks suppliers or producers whom could establish a targeted marketing strategy…
Such services offer the opportunity to use them for professional purposes in order to reach efficiently, quickly and precisely the right customer!
With its growing user’s number, facebook is attracting more partners, sponsor and specially advertisers.
By establishing its own marketplace and more new features facebook is matching the increasing requirements and expectation of the new technologies consumers
In other words this new kind of social networking is influencing some business industries. If we take the example of marketing and promotion industry, Facebook makes, sometimes, the task easier by preparing the field to the advertisers, and more complicated in other cases. During a certain period of its development, Facebook has utilised all the information regarding its members despite they are private to establish a very important data base to be sold for different companies
In my eyes this trend is following the evolution of the consumer behaviour. The invasion of internet and its predominance of our daily life gave birth to many trends which in some cases constitute a real shift in the mind of the consumers.
The challenge is to make feel the consumer comfortable with the utilities of the concept and not submerged by all kind of advertisement and unimportant information.
We are living in a new era where the technologies are imposing their rules. We can not deny their role of making easier and more sophisticated our life but they certainly caused the stress. The successful concept has to be useful and well presented to the customers. The competition is focused on how to present the services to the customers what’s the best way to attract him and make him choose this or that concept!
I already spoke about the impact of facebook on the marketing industry and I think that the human resources field could enjoy this innovation. It’s more accepted by young generation who are using all the new means to communicate to express their point of view and of course to be always present. Many companies are using facebook in order to create their own networks. This could be done spontaneously or proposed by a leader.
One of the reasons which pushed me to choose facebook as a subject is the example of consulting company (bank industry) where I have some friends. The idea to create a network on the web came from the human resources manager who succeeded to make better the atmosphere inside his team. He told that it’s better that hi5 because you can use it for professional and individual purposes at the same time. It makes you able to reach forgotten friends and networks which could help you to improve your professional position.
Below, links to visuals of "facebook"
http://oedb.org/blogs/ilibrarian/wp-content/facebook_activity.gif
http://upload.wikimedia.org/wikipedia/commons/9/95/Metamodel_of_Facebook.jpg
Future Watch
I personally see the future watch as the continuation of the predominance of internet. It’s also following the evolution of the societies and offering more solutions for the consumer in a shorter time with updated content.
The given examples of “future watch“such as; www.trendwatching.com, www.style-files.com or www.wallpaper.com are showing how the quality of the service and the information is improved. They give the possibility to the consumer to be informed about the latest trends and ideas.
I don’t think that the future watch has a short life because one of the basic things of this concept is the updating and the renovation. Maybe the way how to present the information should have a short life cycle but the principles remain. In this way the concept creators will regularly look for the better and most efficient way to reach its costumers.
INNOCENTIVE
Innocentive is an open innovation marketplace which connects innovation and solution seekers with creative thinkers and solution providers. This service overlaps many fields such as chemistry (analytical chemistry was the first innocentive field), genetics, biochemistry, life science, math, engineering…
Innocentive was launched by Eli Lilly & Co'sventure capital group . the main idea behind this business was to use the power of the Interne to enhance scientific and technological collaboration
The seekers could be companies, academic institutions and non profit organisations.
The solvers could be current or retired people, inventors, scientist or business people for example.
The seekers such as important companies like Boeing pay annual fees for access to Innocentive’s network of scientists. The solvers who provide the solutions that companies are looking for are awarded financially.
This business model is a very useful way to make things easier. The solutions seekers could save time and people who could help have the mean to provide the solution. Through this platform helps are reaching poor and vulnerable population thanks to the Rockefeller foundation.
According to an internet site specialized in chemical and engineering news, registered solvers on InnoCentive represent more than 60 different scientific disciplines. About 35% are located in the Asia-Pacific region, 26% in North America, 15% in Western Europe, and 9% in Eastern Europe and Russia. About 60% of all solutions are coming from the U.S. and about 25% from academia.
Through this concept we are assisting to the predominance of internet and the growing attempt to use it. Since it’s based on internet as a marketplace and a communication mean, the Innocentive concept could face difficulties and its growth could be hindered if it’s owners would think to expand it offline!!
This model was created to match different needs and facilitate things to people using a revolutionary phenomenon named internet. Nobody can deny the effect of internet on our professional and personal lives. It had changed many things in our behaviour and way of life. Internet itself becomes a need that we can not neglect.
Since internet is widely used, we saw the birth of many other business models based on it.
The innocentive concept seems very simple but it’s very useful, it allows to a retired engineer living in Australia to go on practising his work at home and providing a solution for an a French company. We can find many examples inside this business because it’s growing quickly and covering new areas. It’s evolution is linked to how successful is it and if the expectations of the solution seekers are matched.
In this way, I personally see that it would be interesting to expand the business to cover human sciences and languages industries. It could be of a great help, since it connects people from all the continents, to include such subjects. The cultural and social problems could be solved through this concept. For example a human resources director of a big multinational company could need a complete expertise and analysis of the typical behavioural aspects of a group of its employees in order to establish efficient communication strategy.The cultural differences constitute, in many cases, a real handicap for the growth of a business and a waste of time for the boss. Things could be managed easier if we have the support of experts in the field or the concerned industry.
So innocentive could provide solution to this kind of problems which the solution is can not easily found.
In addition, Innocentive could expand its revenue sources by publishing first works for beginners in several fields.
The number of industries that could benefit from open R+D is increasing. The science (life, engineering, computer…) and business industries.
Below links providing more information about Innocentive :
http://zero.newassignment.net/filed/innocentive_crowdsourcing_diversity
http://www.rockfound.org/initiatives/innovation/innocentive.shtml
http://pubs.acs.org/cen/business/84/8426bus1.html
http://www.fastcompany.com/online/57/lilly.html
http://www.wired.com/techbiz/media/news/2007/07/crowdsourcing_diversity?currentPage=all
The Social Entrepreneur
Social entrepreneurs are simple persons who try to solve social problems through innovative and revolutionary ideas. They are from different social classes and could have different backgrounds. They intend to realise real changes in the society in order to make it better and bring long term solutions.
On one hand I think that social entrepreneur could be a trend which benefits to the whole society. it could be considered as an evolution of the social behaviour and a growth of the social awareness. On the other hand a social entrepreneur represents a shift to corporate responsibility because the working life represents the major part of the daily life. The staff of a company is composed by its members and these members could reflect the society within the company. The corporate responsibility is a hard task which consists in spreading the harmony and ensures the well functioning of the company. The social aspect of the company should is a real challenge for the boss. He should be the social entrepreneur of his company and try to go deeper into the social problems and conflicts within his structure. Well thought solutions with a long term vision could improve the performance of the employees and increase the profits of the business.
Ventes-privees.com
Ventes-privees.com
Ventes-privees.com is an internet site representing a company which organises famous brand sales for its members only. It was founded in 2000 and offers its services in three countries; France, Spain and Germany. The prices are very attractive but it’s not possible to subscribe directly to the site. In order to become a member you have to be sponsored by a friend who sends you an invitation.
The site offers a variety of items; clothing, watches, high tech….and the duration of the sales is very short, they last one or tow days. The sales principles consist in sending an invitation to the members few days before the sale opening.
The members of this site could enjoy the exclusivity of the products provided on it at lower prices. It makes people feel like they belong to a privilege club.
In order to understand the concept better I tried to obtain an invitation and discover the site. I asked many friends and most some of them but not the majority know the site. I finally received an invitation and subscribed.
The site is very nice and well presented but it does not offer many products and brands at the same time. Personally I did not like it so much and I was told that you have to follow the updating of the site until you find something that you like.
The company aims to an international development. It’s present in 2 european countries and wats to reach England and Italy and later on the Us market. For this reason it accepts the offer of an American investor “Summit Partners” who bought 20% of the company’s shares.
The fact that the internet site is not accessible without an invitation could attract more people and especially when it offers very different products of a high quality.
Below links to some articles describing the business and it’s growth and development. Unfortunately only one of them is in English and the others are in French but provide interesting information (especially the last one)
http://www.businessweek.com/globalbiz/content/jan2008/gb20080111_222659.htm?campaign_id=rss_tech
http://www.zdnet.fr/actualites/internet/0,39020774,39370108,00.htm?xtor=RSS-1http://www.journaldunet.com/itws/it-granjon-lecteurs.shtmlAnd here below a link to a business using ventes-privees within its site
http://www.wananow.net/site-de-ventes-privees.htm
THE FREEMIUM BUSINESS MODEL
“Freemium” the new business model
The freemium is a revolutionary business model concept. The association of the words and concepts “free” and “premium” gave birth to the freemium concept which has expanded thanks to the Web 2.0 world. The idea consists in giving away free versions of a product than providing premium versions and add-ons in order to attract some users who could be upgraded to payable premium versions.
Text links to info source:
http://onstartups.com/http://en.wikipedia.orghttp://www.contentmatters.info/content_matters/- Online businesses utilizing “freemium” business model:
http://flickr.com/http://www.skype.com/intl/fr/* Advantages of “freemium” concept:
- Provides services for free and is very useful
- It encourage customers to use the product and test it before paying
- It helps developing social networks
* Disadvantages of “freemium” concept:
- It mostly relies on word to mouth
- It can not ensure high revenues
- The premium services could be less interesting than those provided for free, depending on the consumer’s behaviour
EasyGroup
The famous name of easygroup is associated with the 40-year-old Greek entrepreneur Stelios Haji-Loannou who is the founder of the first easy business; easyjet in 1995. He is the owner of the EasyGroup (
http://www.easy.com/) which was founded in 1998 in order to control the “easy” ventures.
The main objective of the “easy” businesses is to provide services and products at cheaper prices.
After the foundation of easyjet in 1995 which started operating flights between England (Luton) and Scotland, the company flourished and opened many other routes across Europe (more than 200 routes ….)
In few years EasyJet become a brand as result of this prosper business Stelios started to work a brand extension and founded the EasyGroup. In this way we saw the birth of more than ten other “easy” business concepts such as:
- EasyInternetcafé (
http://www.easyinternetcafe.com/) :launched in 1999 and is Europe’s largest chain of internet cafés
- EasyCar (
http://www.easycar.com/) : launched in 2000 and currently operating as an international car rental via the internet in more than 2400 locations in over 60 countries
- EasyValue (
http://www.easyvalue.com/) : launched in 2000 and is an internet shopping comparison site
- EasyMoney (
http://www.easymoney.com/) : launched in 2001 which is a credit card converted later in EasyMoney insurance
- EasyCinema (
http://www.easycinema.com/) : launched in 2003 and was not so successful so closed in 2006
- EasyCinema DVD Rental (
http://dvd.easycinema.com/visitor/home.html) : launched in 2005 as the result of a partnership with LoveFilm; an online dvd rental company.
- EasyHotel (
http://www.easyhotel.com/) : which is a booking engine for the easyhotels and for more than 20000 other holtes worldwide
- EasyPizza (
http://www.easypizza.com/) : launched in 2004 as a delivery-only pizza company
- EasyCruise (
http://www.easycruise.com/) : launched in 2006 and aims the 18-40 age-group and not the traditional retired market only.
As seen, this great brand extension covered many business areas making attainable services at reasonable prices. We can take as example the easycruise which was considered as a luxury product targeting the retired people who are ready to spend money after a long labour life in order to enjoy the rest of their life…With easycruise the aimed customers belong to another age segment; 18-40. Young people have the possibility to enjoy a nice cruise at a cheaper price but of course with fewer facilities….
The first successful easy business was easyjet. Stelios used a magnificent mean to fulfil his target which was reducing costs then offering flights at low prices. He used the yield management which is a very useful tool to maximise profits. The core concept of yield management is to provide the right service to the right customer at the right time for the right price.
It was used for the first time in 1977 buy American airlines to increase its revenue.
Stelios tried to adapt yield management to all his businesses by studying the behaviour of the consumers and using the dynamic pricing to attract more customers to increase his benefits.
It possible to understand way how the yield management is used in order to increase revenues by checking deeper the details of one “easy” concept such as EasyPizza. We will also understand how the business offers pizzas at lower prices and is profitable
The concept consists in a delivery pizza service and this choice was not made randomly. That is meaning that easypizza venues are not situated on high street, hence it saves money by avoiding the high cost of high street rents.
But the main change in this business is the way how the assets are used. Normally the ovens and the delivery vehicles are used few hours the day from 18h to 22h.that means that they are under-utilised.
Another demand has to be created in order to provide pizzas during all the day and not during the evening. And here, the magic tool (the yield management) plays the main role. For example : customers who accept to take their pizza delivery at an off-peak time, 15h or 16h for example, are rewarded with a lower price that customers who take delivery of the same pizza at a peak time. Moreover customers who order their pizza in advance benefit from lower prices than those who want it for an immediate delivery. In addition, customers buying pizza from
http://www.easypizza.com/ are rewarded with lower which is not the case of those who prefer order their pizzas by phone.
By using yield management it’s possible to create demand and increase revenues. At the same time money is saved and making profits opportunities are multiplied, so no money left on the table!!
When we get in the easypizza website the main message we see is “REMEMBER it costs you less when you order online”
If you would like to have the pizza for an immediate delivery you have to enter a valid postal code and if you would like to order it in advance you have to be registered. If you order for the first time you have to register then you will be able to log in and book pizzas in advance. Of course you will save money. Indeed, the delivery service is not free and the prices of the pizzas shown in the menu don’t include the delivery fees which what time order is placed (0£-4£)
The long tail concept pushes the limits of the world of scarcity to a world of abundance. I personally think that’s that this sentence explains clearly the main principle of this concept. I found the expressions of “The world of scarcity”, “the tyranny of space” brutal but reflecting very well the problems of space and time that faces the world, notably the media and entertainment industry. The long tail theory provides solutions for these constraints and makes the business easier, larger and more profitable for both sides customers and suppliers
It offers larger varieties of media and entertainment products such as films, music tracks, games, with the possibility of obtaining old titles, lower prices, titles by unit…wherever they are and whenever they want
The concept could be considered as a solution for many suppliers, since they can reach the consumers easily and quicker than before. In addition, If we take the example of a movie or music tracks…they are not limited by the broadcasting time or the lack of audience. It’s also an opportunity to increase profits by providing unlimited selections of different products (including old and unfashionable ones) at attractive prices. In other words make everything available. At the same time they save money since manufacturing, distribution, storage, marketing…costs are reduced.
Using the long tail principles reduces the physical constraints and the. It makes many new market niches attainable without limitation of time or geographical space.
We also notice a change in the consumer behaviour; the more he has alternatives the more he wants to discover and have others.
In order to understand better this concept and have an idea about its benefits, it’s better to take some examples of long tail users from the most famous media and entertainment industry actors :
- NETFLIX (
http://www.netflix.com/) which is is the world's largest online movie rental service. By bringing different type of movies and documentaries; foreign films, anime, independent movies…, directly to the consumer this supplier knew how to update its services to the changes in the style of life of the modern consumer in order to satisfy his requirements and match his expectations.
By providing rare products with small and dispersed audience, recommendations which represent 60% of Netflix rentals, the site has increased its rentals and its profits
- AMAZON (
http://www.amazon.com/) ; a very important worldwide bookseller used an efficient strategy; the recommendations which uses the research and selection patterns of consumers to guide and help those who follow them in making a choice.
Moreover the site provides more services considered other revenue streams such as:
- Amazon credit card program
- The digital text platform program
- Selling more products different from books
The long tail is used by different businesses, especially those based on internet which solves the problems of space and time. So it’s an online based concept which could be better developed by introducing some other entertainment means such as bet gaming, home made videos or home recorded tracks. In this case a subscription fee could be asked in order to put the work on the network and make it saleable
