Читать книгу End Of Competition, The: The Impact Of The Network Economy - C N A Molenaar - Страница 6

The frictions that we experience when doing business, and in fact also in society, result from the impact of technology. There is a transition period from ‘doing digital’ to ‘being digital’. This affects every aspect of our lives, both private and professional. Merely observing the changes, reading about conflicts of the old model in relation to the new model, is confusing. The current developments and frictions require more in-depth examination. Insights into these developments will be necessary in order to achieve success. Many more partnerships will develop; organisations will come together and combine forces and borders will disappear. This will lead to the changes from order entry to new digital business ecosystems, or rather from ‘doing digital’ to ‘being digital’.

How is it that these new concepts can suddenly grow so quickly (network effects)? And that the international growth is a question of months, or even shorter, where previously it required decades or longer? And how is it that new businesses can continue to exist despite massive losses? The transition from a transaction-based model to a value model requires modifications in the organisation, in the focus as well as in the strategy. We suddenly see old terms being used such as ‘commodification’, a term that was important for Karl Marx, which indicates that each transaction is a value component. So why then are prices determined on the basis of an exchange of products (transaction-oriented) and not on the basis of budgets (value-oriented)? This change alone requires a new vision, whereby old criteria and (marketing) instruments have to be modified on the basis of a value exchange.

This also explains the discussions on returning articles from online sales in this transition period. In the traditional model, the buyer was the weaker party and had to be protected with legislation and guarantees. However, with the new resources, technology forms the basis. Purchases made through digital media may be returned within two weeks in Europe. But why two weeks? Why can items that have clearly been used be returned, and why do potential buyers order so many articles that they later send back? Customers are abusing the new possibilities and the old legislation. This is a change from ‘caveat emptor’ to ‘caveat venditor’. A shift of dependency, from the customer to the supplier. I have actually not come across these terms in the marketing literature. Blockchain can lead to modifications in this.

A study into buying motives and buying behaviour has led to new insights that form the basis of the current changes. The necessity to buy has disappeared and has been replaced by a choice in what is bought and where. In the old, supply-based model it is all to do with comparative cost advantages. The price as a weapon against the competition. This involved protecting markets against new entrants, international suppliers and substitute products. Defence as the basis for success. These days this protective approach is no longer workable; defence leads to shrinkage and eventual disappearance. Also relevant these days are buying motives and motivating customers to buy. It comes down to developing a vision of value exchange instead of price. But what does a customer actually buy? The product, the service, the imaginary value, the experience or the acceptance within an intended group? Businesses have to delve deeper into these, often individual, buying motives. New analysis systems based on artificial intelligence are necessary, and lead to the formulation of algorithms. The future competition will no longer be about comparative competitive advantages but will involve customer loyalty and algorithms. These are new technological applications that will form the basis of doing business. And this change process has only just begun.

Many companies are still busy optimising or digitalising the current processes (doing digital), although this is based on an outdated, traditional model, with a supply chain, the sale of services and a customer journey. New concepts, however, are rapidly conquering markets, such as Airbnb, Uber, dating sites, booking.com, Deliveroo and many more. These involve new revenue models, strong market positions and are based on collaboration. Existing organisations can no longer compete with these. Complaints and bans are only temporary solutions. Often the management is so restricted by old regulations, outdated KPIs and a redundant pursuit of profits that it is difficult, if not impossible, to adapt. So the question is, what sort of future do these businesses have? Should they join existing platforms, develop one’s own platform or become a niche player?

Customers do not let themselves be pushed anymore, and loyalty systems that reward transactions no longer lead to the desired impulses. A ‘net promoter score’ is too subjective to base any policy on it; data analyses, on the other hand, are objective. But a customer also has to want to feel loyal to a product, brand or supplier. An affinity. A positive feeling. After all, isn’t there a positive feeling about the sponsor of your sports club? Creating an affinity requires direct and personalised communication. And for this you need algorithms. Platforms will attract and create a bond with visitors, but products and services have to motivate them.

The constant denial of these developments, the continual trivialising of platforms, because they would lead to unfair competition (!) or acquire a dominant market position (such as with Alibaba.com or Amazon.com) is surely a sign of impotence? Not wanting to change and refusing to respond to the wishes of consumers?

We are shifting from a supply-driven economy to a demand-driven economy, you could say a Fourth Industrial Revolution. Taking part is no longer a choice; it is a necessity. But how, when and with what technology or partners? With which partners and in what concept (platform)? In this book I explore the indicators of change, the motives for change and the changes that are yet to come. Concrete plans provide clarity regarding the steps that can be taken, and they indicate who is already going down that road. It took a thorough theoretical analysis to determine the current developments and to predict any future ones. In my book, The End of Shops (2011), based on buying behaviour I predicted that many shops would disappear due to their decreasing relevance with the new buying behaviour. In 2017, I analysed the disruptive nature of platforms. These platforms, like Uber and Airbnb actually only emerged after 2015 based on new automation possibilities such as multiservice programming, APIs and new analysis techniques. My conclusion was and remains, it is bend or break. In the last two years, I have been involved in various change strategies in the course of which platforms and algorithms based on analyses were developed. This has lead not only to new insights and knowledge but also to an increasing realisation that much more still needs to be done.

The developments in the Western world are influenced by the freedom of choice people enjoy, cultural aspects and the adoption of new technologies. In Asia we see not only some similar developments but also developments that are different. In particular due to the Internet penetration later taking on larger forms, it was possible to make modifications to the concept. In many Asian countries such as China, South Korea and Vietnam, their governments take on a much more intensive role than in the Western world. We see other developments as a result, and also typically European issues such as privacy are dealt with differently in Asian countries. This leads to a stimulus in innovative applications, such as social media, virtual reality and commercial applications like face recognition and algorithms. I devote a separate chapter in this book to examine the social media in Asia and its consequences.

With a group of eMarketing students from the Rotterdam School of Management at Erasmus University in the Netherlands, I have carried out research in the Netherlands and Europe as well as in Asia and, in particular, in America. The current developments are universal. In this book, I make various references to these studies and to study trips to, for example, America, China and South Korea. I would like to draw particular attention to a number of studies and researchers: Tim Scholtes and Jan Biezepol: The Future of Competition; Henrique Campos; Wael Romdhane and Pierre Vigor: Integration Online and Offline in a Physical World; Erik Casemier and Eline van Groningen: What is the Impact of the Matching Function on Multisided Platforms on the Customer Experience; Zuzana Kupcova, Paul Chaintreuil and Guilia Montorsi: How do Consumers Behavior and Loyalty Change in a Network Economy; Richelle Lum Shun Yi, Kristel Tan Sheng Hui and Pim Fijt: The Future of Retailing for both Traditional and Platform Retailers; Wendy-Kristy Hoogerbrugge (OU): Over Inbound Marketing and Innovation and Chrystalla Panteli, Songri Lee and Subin Jeon: Target Marketing by the US, South Korea and China. The chapter about Asia was written in close cooperation with Songri Lee and Subin Jeon. I also like to mention Sofie Geeroms (asbl BeCommerce vzw). During our study trip in China we discussed thoroughly the impact of all new developments. It really sharpened my insight and vision.

In addition, I have had many discussions with Ruben Schmetz on the automation aspects, and have met with potential suppliers of platform technology with API links (there are not that many). With Meindert van Duyvenbode from Datacon, I have developed various concepts and talked about certain limitations of systems. During our study trip to China, I had the opportunity to discuss the developments from a practical point of view with Dick Slootweg from Bidfood. I also greatly appreciated his valuable constructive criticisms on the manuscript. Regarding the modifications for the section about Asia, eMarketing exchange students Songri Lee and Subin Jeon provided me with much support in the analyses as well as many opportunities for discussions.

And finally, I would like to thank my wife Patricia, the basis for all these studies. It is often a giant leap from planet Cor to earth. But just the occasional comment was usually enough.

I have greatly enjoyed gathering and analysing the data as well as putting it into a practical context. During this process I have become convinced that we are at the beginning of a new age: the age of ‘being digital’, with other rules, other suppliers and a different buying behaviour. Closing your eyes to this is to deny yourself a future.

C.N.A. Molenaar

Oosterbeek

May 2019

Email: cor@cormolenaar.nl

Websites: www.exquo.nl; www.platformsupport.nl