Apple and Samsung are embroiled in several legal fights; both are contending for global leadership of smartphone and tablet market, with Samsung poised to surpass Apple in the race in 2012. Smartphones are an interesting example of a product category where the second or third movers have considerably learned from the experience of the product innovators. Long before Apple launched the iPhone in 2007, IBM had released the first smart phone called Simon in 1993.
Often the pioneers spend a lot of resources to come up with new and innovative products, demonstrate it to the users and test the market. In the meanwhile, newer companies that are more agile and are quick to see the opportunity, understand the product – market fit, learn from the mistakes of their predecessors, make a big bang entry and harvest the potential in the market already created by the earlier explorers. They survive and even make it big.
Samsung, for example, has perfected the game of being the second mover. They study the market leader meticulously, copy every aspect of the market leader's strategy in minute details, and further improvise on the execution of the strategy. They end up not only in catching up, but even surpassing the market leaders. It was the success of the iPad that made Samsung roll out the Galaxy Tab. Even the Galaxy Note was preceded by the Dell Streak.
On the other hand, there are companies such as GE or Siemens that have been successful in retaining the first mover advantage and in creating next generation products in a continuum while phasing out the older ones. One of the parameters of strategic health for GE is the proportion of revenue earned by products which have been brought out in the previous 2 years. It means that such companies need to have a whole range of next generation products in the pipeline. This is relatively easier for companies that cater to the B2B market, where customer expectations can be understood within a reasonable time frame, due to existing contractual relationships with the customers. It is more difficult for the companies to gauge the customer expectations in the B2C scenario, though the B2C market offers the advantage of high volumes.
This brings us to an interesting question that why the pioneers with all their obvious advantages such as a brand image, a customer base and a dealer network in place to push the new product, are still not able to retain the market leadership. Going back to the Kodak story, what could they have done differently so that having been the pioneers in digital technology, they would have continued to be so.
This steers the discussion towards a very important trait of executive leadership – the ability to foresee the horizon of changing technology and customer expectations. An organization has to be futuristic, open to accept that the world can change overnight and the confidence to believe they can be the leader in the changed world too. It requires the tenacity to persevere, understand the market’s perception of their products, support R&D to improve on the products and make required changes to their products or their marketing approach in order to sustain the market leadership.
The path to achieving this trait could be through corporate entrepreneurship, if promoted in a true sense within an organization. This group would need to be supported and backed by the topmost authority in the organisation and would have to be reasonably separated from the current culture of the organisation, to encourage them to think differently and foster a culture of innovation. This may also, at times, require convincing the shareholders and the board to take a dip in immediate returns for long term gains.
This leads to an interesting question next. Which of the items of mass consumption today is most likely to into oblivion replaced by a newer generation product in the next three to five years? Who knows? Plastic money could be one! Already some companies are developing mobile payments solutions that focus on the convergence of online (e-commerce) and proximity (face-to-face) payments.
Nice article, Somali. The old positioning Mantra: 'Be there first' always works.But Samsung has indeed perfected the art of being an excellent second mover. - Ranjeet
ReplyDeletePlastic money? Sure, I have been scanning my cell phone to pay for my coffee for a while now. Same for coupons – just send it to your cell phone. There is no need to mail hoards of coupons to households, or cut & take coupons with you to the grocery store. Save the trees! I have been also depositing checks to my banks just by taking a picture with my phone.
ReplyDeleteAnother equipment that I have not used for about 10 years now is the desktop PC. My daughter doesn’t know how a PC looks like. Today I again find myself in the minority for using a laptop. Most of my colleagues have moved onto tablets. Laptops will be a thing of the past soon. If you are skeptical, then let me explain.
Traditional data centers are not an item of mass consumption per se, but I cannot help but talk about it because this topic is intertwined. The data centers as we know today will become a thing of the past because companies are moving to cloud services. Our company has moved all critical systems/applications to cloud already –using Saas, PaaS & IaaS.
As we move to the cloud services (offered by Amzn, Msft etc), there will be no local files or applications. Web applications, for instance, will be hosted on iCloud. This will help make the device very light as far as local storage is concerned. In other words, we don’t need bulky laptops anymore.
Even traditional emails (Outlook, LotsNotes) will be replaced by something like Gmail (on cloud), or IMs, or something more collaborative – something simpler than SharePoint on cloud! That reminds me – even the English language is undergoing sea of changes. I think this language as we know today will be complemented, if not replaced, by a “text-like” staccato language. OMG! We will express our sentiments in monosyllables & emoticons more than flowery romantic outpours. :)
I also think that the hierarchical system in companies will be replaced by a flatter system. Today you are more likely to be leading a team of peers in dispersed teams from different cultures that are collaborating virtually. Decision making will increasingly be by mutual team consent, consistent with the goals of the organization and changing needs of customers. Management will become more about listening to and engaging those you work with. Your aim will be to ensure team members are able to prioritize their work and maximize their own performance. No more traditional ‘managers’.
Well, I have digressed too much from the original question. L8r.
Thanks CJ. Not the least sceptical. It’s my pleasure that you read the posts and add on to them. I agree with you that it’s just a matter of time that people will stop carrying laptops for presentations & meetings; tablets serve the purpose well & are much more convenient. Not sure if I can say the same about using monosyllable expressions though! Yes, they serve the purpose to an extent but nothing can beat the joy of reading good language.
ReplyDeleteWill shortly publish my next post.