Search engines today are the gateway to the web. Nine out of ten times you start your journey on Internet through search engines. Search Engine Optimization is a multi-billion dollar business because people reach your website through the back door using a search engine more often than through your home page. Google’s dominance in the search engine world is unquestioned with the company controlling about 70% of the market share.
Competition brings the best in you. With Microsoft trying to catch-up in the search world, there’s going to be more innovation and excitement in this space than ever before. With Google’s dominance and control in the search market, Microsoft is trying hard to change the game with Google ready to fight in the new field. Bing, the Microsoft’s search engine, is going for an application based approach to search. The idea is that when you do a search, you don’t just find the results, pick one and get out of there, but stay there and do much more. This application based approach is now becoming more visible in both Google and Bing.
So what does this mean and where is it going? We all have seen simple applications running in search engines. A weather application to show the weather right in there, a dictionary, a stock price, match scores etc. What do these applications do? They give you the basic information right upfront and you have an option to dive in to get more detailed information. Now extend it to other things. One of the most popular ones is news. Get the news headlines before leaving the search platform and dig deeper if you want the details.
Bing and Google are competing to extend it further. Take video for example. How would you like to see a 30 second preview of the video before clicking on it, loading it and watching it? That can be done by building a video player application inside the search engine. How about shopping? Why not find reviews, compare prices and see special offers right at one place before going out and making the purchase? Books: get the abstract before going out and purchasing it. Movies: view trailer, read reviews, see show times and buy tickets at the same place. There can be an application for everything you can think of in the search engine.
There are many advantages of application based approach to search. One of the biggest advantages is a better display which in turn converts into saving time to find the right result faster. The implicit feedback loop is important for accuracy of a search engine. The more time you spend in a search engine, the more opportunity for the search engine to learn about you, what you want and improve the results and applications. There’s an obvious business advantage as well. More time spent in search engine is proportional to more opportunity to target the audience with targeted advertisements.
Google has very well set simplicity as the new black. So the biggest caveat while playing with anything in search is to make sure the simplicity is maintained. Users today are used to getting results packaged in a clean user interface and to be successful in search space, you got to make sure simplicity is not compromised.
One of the hottest territories in the technology industry today is the e-books market. New readers (or multi-purpose devices with reader functionality) are getting launched in quick succession and big players are entering the fray. With heavyweights like Amazon, Apple, Barnes & Noble, Google, Microsoft, Samsung, HP and Dell competing to sell the devices that can serve the purpose of an e-book reader, it’s too early to call who will stack on the top of the lot. The first mover advantage here is arguable, but “multi-device application” advantage is certainly not.
Amazon has adapted, what we can call, a “multi-device application” strategy which can work big time in its favor. It has decoupled the Kindle application with the Kindle hardware, i.e. the software application that you use to read the books on Kindle e-book reader is available for a slew of other platforms including Windows, iPad and Android for free. So an e-book that you buy from Amazon can be read not only on Kindle, but on virtually any device you own.
This multi-device functionality together with other value propositions of Amazon has given it a big advantage. Amazon has got the biggest collection of books in its e-bookstore. Books is their forte. Book buying experience on Amazon is second to none. They have strong customer relationship and command unparalleled trust when it comes to books. And when you can buy a book from Amazon and read it on any device, the probability is really high for customers to use their store.
Amazon enjoys advantage, something similar to what Microsoft did with its Windows operating system back in its early days. Microsoft distributed Windows openly to run with different processors and computers made by all PC makers, making it the platform of choice for application developers and the end users. Similarly Amazon is distributing books to be read on any device, no matter who’s selling the device. This will likely give the Kindle maker an edge and could make it the e-bookstore of choice for the end users. There’s one catch, Amazon better make money selling e-books.
The one thing that really helped Microsoft capture the personal computer market was its strategy to focus on software that goes on computers made by any computer manufacturer from IBM to Dell. That’s been the company’s strategy which has proven great for it over the years. Windows became the platform of choice for application developers due to its great reach in turn making it irreplaceable for the PC users. Apple on the other hand made really great Macs by developing both the machine and the software that goes on it. A semi-closed ecosystem with a handful of application makers (like Microsoft Office) making software for it. Apple found its niche in the cool and trendy crowd consisting of students, designers and artists.
Bring in the mobile space. The very strategy that worked against Apple in computers playing field is now proving to be its most valued asset. Apple is a company that controls end-to-end development of its mobile phone. It controls all three key elements of the phone – hardware, software and the chip component. This gives Apple an unprecedented advantage in providing integrated user experience. Apple is able to remove any friction between hardware and software. Adding the chip development expertise to this provides Apple accuracy in estimating the processor performance and map it to feature development. The out of the box experience that FaceTime delivers is one of the first examples of how vertical integration is going to do wonders for Apple.
The only other company that has all three elements of mobile phone under its control is Samsung. Samsung, the world’s largest conglomerate, has great expertise in chip development and hardware manufacturing. Samsung manufactured phones running Windows Mobile software have been around for a while, but Samsung launched its bada platform for mobile devices in late 2009 to have complete end-to-end presence in the mobile world and Samsung Wave became the first bada based phone to enter the market a few months back. All the elements coming together positions Samsung perfectly to be a challenger in providing vertically integrated experience on the mobile platform.
Now moving on to talk about the emerging markets. Mobile phone market is growing at a tremendous pace in the developing countries. India and China each have more mobile phone users than the total population of United States. If at one end a smartphone costs more than the monthly income of many people in these countries, it is a wannabe gadget for the growing middle class. While iPhone fanaticism is catching up in these countries as well, no one can dispute the unparalleled hold Samsung’s got in the Asian markets. Samsung has one of the most efficient marketing machinery and brand presence in the electronics market out there. This positions it strongly against Apple et al to get smartphone market share in these countries.
There’s still a while to go before calling out the winner in the mobile devices world. Apple, with its genius design and development of iPhone and iPad, has captivated the imagination of everyone from consumers to competition. But it will be interesting to see how Samsung and others fare in there in the coming years and what role the emerging markets will play in deciding the fate of these companies.
Recommendation engines are the software applications that take customers’ shopping behavior and recommends them what other products they should consider buying. Recommendation engine plays two critical roles. First, it helps in personalizing customer experience on the web and in-turn makes online shopping a better experience. Second, it helps drive revenue for online stores by making sensible and relevant product suggestions to the customers. Amazon.com, the online retail giant, has spearheaded the innovation in this space. Everything from search results to the Amazon.com home page to emails sent out to customers are personalized for every customer with relevant recommendations based on the customer’s shopping pattern.
Amazon recommendation engine does wonders for the online bookstore. It understands a customer’s reading pattern from their search and buying history and recommends the customer similar books. The engine takes into consideration the book genre, author, buying pattern of the customer, buying pattern of other customers who bought similar books and a bunch of other criteria to display relevant recommendations. Over the years, Amazon has been able to sell millions of additional books and tap into its long tail with the help of the recommendation engine.
Now let’s talk about the scenario beyond books. Over the years, Amazon has expanded its retail footprint by selling products in more than three dozen categories. It sells everything from home appliances to jewelry. As expected, Amazon has adopted the recommendation engine for its other product categories as well. In many cases like movies, video games and music the adoption was very straightforward from books. With the help of relevant recommendations, Amazon is able to provide customers with a richer shopping experience in these categories.
Though in some other cases like home appliances, cellphones and gardening products, there’s a critical difference which makes the recommendations shown to the customers irrelevant. In categories like these, the online mega-store does not take into consideration the fact that if the customer has already bought the product from them, they won’t buy it again for sometime. I experience this when I bought a vacuum cleaner from Amazon last week. Even after buying the vacuum cleaner, my Amazon.com homepage has recommendations of vacuum cleaner and I am receiving email newsletter with attractive offers on vacuum cleaners. This would have made a lot of sense if I bought a marketing book and received recommendations for other marketing books, but when translated to a vacuum cleaner, this becomes an annoying experience. How can it be made better? Maybe by considering broader area of home appliances or cleaning products for recommendations than the narrow category of vacuum cleaners.
In all, the recommendation engine is a great innovation to enhance online shopping experience. But when applied to newer territories, there are lots of opportunities to make them smarter and more efficient.
Information overflow is one of the biggest problems in the world. Today you can find a lot of information about any topic anywhere (well “almost” anywhere) instantly. There is abundance of information which has created a problem in itself i.e. how to use it without losing key data points? Companies have made fortunes by organizing, presenting and searching information.
Information abundance and availability has done great for the world. It has leveled the playing field in many ways. People can make informed decisions. You get the breaking news the same time as anyone else in the world. You can analyze the archives from years back just like anyone else. But even after having access to the same information some people can make better decisions than others. That’s because just having information is not enough. The important thing is how can you leverage the available information?
Information can be leveraged by converting it into knowledge. Knowledge is a result derived out of the information through perception, learning and reasoning. Knowledge is precious. It is actionable. The differentiating factor lies in how well you are able to extract the knowledge out of the information to make critical decision, how well can you apply the learning from historical scenarios to predict the future and how well you can apply analytical reasoning to reach to the optimal results.
Technology that plays a major role in organizing the information plays an equally important role in converting it into knowledge. Complex algorithms that would adapt with usage plays a critical role in knowledge generation. Another important element in this process is human input to absorb the knowledge and make decisions. The idea is to process the information and synthesize the data to derive intelligent conclusions. This is more of a cyclical than a linear process. A process where information flows in and gets processed, knowledge is extracted, decisions are made and the processing algorithm and decision-making process gets adapted based on efficacy of the results. The adapted infrastructure is used to further take information and produce knowledge.
How well you know your competition plays a major role in your success. But let alone knowing them, it’s not always obvious to mark the competition right. It’s like marking the target for a shooter. Even the ace shooter can’t win if she is not able to mark the target right.
Take credit card networks for example. There is Visa, Master Card, Discover and American Express. Primarily competition here is with cash and checks. These networks are in some way competing against each other as well, but their main competition is other forms of payment. If you look at all forms of payments as the whole pie, and credit (and debit) cards as a part of that pie, it makes sense for each of these companies to increase the share of cards based payment first and compete with each other next.
There are so many other examples where competition becomes clear when you look at the broader purpose your product is trying to solve. Vending machines compete against retail stores and outlets, Google adwords is primary competing against television channels and print media for ad dollars and so on.
One interesting case is to spot a competitor when the competition is not really trying to compete with you. Consider bottled water for example. Who are these bottled water manufacturers competing against? Their primary competition is free-flowing tap water. No one is marketing or selling tap water. It is free, it is always there and (in most cases) is abundant. Bottled water manufacturers want people to trust and drink water packed in a bottle more than the free-flowing tap water.
In each of the cases we discussed here, there is competition amongst competing brands in the same category, but we need to make sure we don’t lose the complete picture and miss the primary competition.
There is one special case where you are competing with a previous version of your own product. For example Office 2007 when released competed primarily against Office 2003. Same is true to a large extent in case of progressive releases of monopoly products like iPods. This makes competition more interesting because you are in a way competing against yourself. You are out doing yourself and maintaining pace against smaller competing brands.
Knowing the right competition can help you tune your marketing message accordingly, place your product in the market appropriately and do your future product development with the right target in sight.
In 1948, Dick and Mac McDonald’s opened a self-service drive-in restaurant. The menu was limited to nine items and service was faster than anyone had seen before. In 1954, Ray Kroc,52, first saw the operations of the McDonald’s restaurant and was fascinated by it. He had an epiphany and started his career in hamburgers by buying worldwide franchise of the restaurant from McDonald brothers; opened his first McDonald’s in 1955 and by 1965 there were 700 McDonald’s. Rest is history that defines the biggest fast-food chain in the world.
McDonald brothers perfected the operation of making and selling fries and hamburgers. Ray Kroc took it global and made McDonald’s a world icon. This is a perfect example of two different set of skills you need, one of a perfectionist to create a perfect operation and another of a visionary to take it global.
Who made McDonald’s “McDonald’s”? Ray Kroc.
It was Ray Kroc who picked it up from one store in a town in California, believed in the concept, set a perfect system to replicate the operations, built a team of great people and set McDonald’s as a world renowned brand. Without the vision, passion and risk taking ability of a Ray Kroc, McDonald’s would have been a great hamburger and fries joint in San Barnardino, CA just like Thai Tom is in Seattle, WA or Aravind Eye Hospital is in South India.
Both Thai Tom and Aravind Eye Hospital are great examples of a process made perfect by a unit at a certain place. But they are not yet global phenomenon because they don’t have someone with a vision and leadership to adopt them and take them worldwide. They are just like McDonald’s was in 1954, and for them to become “McDonald’s”, all they need is a “Ray Kroc.”
From the premier of a country to the layman witnessing an event down the street, everyone has got a voice and the leading way to raise it today is through twitter. Whether you are a celebrity managing a PR disaster or a brand raising product awareness, the best way to do it is by being precise, direct and without filters. This is where twitter comes in play. A 140 word short message that you can send out to the world irrespective of who you are, where you live (almost) and what you want to say (risks exist!). All in all, twitter provides everyone with a microphone to express ones views loud and clear.
One of the main advantages of this form of direct communication is that there is almost nothing lost in translation. The message reaches the audience as you want to send it. The chances of you being quoted out of context are less than ever before and the fact that it is on the web, the golden rule of “web never forgets” applies to your tweets to a large extent. Twitter has been more effective than other sources of information sharing like blogs, podcast and youtube. Reason being twitter is effortless. You can speak your head out and you don’t have to be a writer or photographer to do that.
Indian Premium League, one of the most lucrative sports league in the world, unleashed the power of twitter in one of the best possible examples of how dominating this medium can be. All through the tournament and scandals surrounding it, the role of major Indian newspaper and news channels was limited to quoting the role players from their twitter feeds. No major news conference, no people running with cameras and microphones, but as much, if not more, buzz and fan following, all through twitter.
The word of mouth social campaigns like Malaria No More and relief efforts in Haiti reached new heights with the help of twitter.
Twitter does a great job in leveling the playing field. You no longer have to wait to be reached out to or asked for an opinion. There’s the microphone for you and you got to leverage it to reach out to your “followers”.
Apple iPod, Microsoft Windows, Toyota cars, Facebook. There’s one thing common among these products. They are all market leaders in their respective categories with substantial market dominance but were not the first movers in their industries. There were hundreds of personal music players before iPod came into picture, Windows was not the first operating system, American cars were dominant when Toyota entered the US market and there were Friendster and MySpace in existence much before Facebook became the social network of choice on Internet. So this pops up an important question: is the first mover advantage overrated?
First movers have a certain advantage. They win the coveted place in the hearts and minds of the early adopters. Early adopters can form a formidable force to help the product cross the chasm, and reach the masses. But the place where the first mover advantage starts to degrade is with the masses. Because the laggards don’t care whether you were first or the last one to enter the market. These are the skeptics, the people who care about the price tag and the popular thing, the advertisements and the buzz.
How can a first mover use the advantage and sustain it? Some ways to do that is by out innovating the competition, maintaining the price advantage and keeping up with the buzz in the industry. Another thing that can play a critical role is the ecosystem around the product. Ecosystem is powerful. It gives you the edge you need to fend the competition, attract the masses and attain the leadership position.
The takeaway from this is if you are trying to decide whether you should enter a particular industry or not, and the no-go decision is based on the fact that there is an existing dominant player in the industry, think again and try to recall one of these products. Then do your due diligence, look for opportunities, ways to improve over existing competition, possibility of an ecosystem and make your decision.
