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Peter Cochrane's Hard Drive 1996 Marketing threat from America Truth is, the vast majority of businesses are already small to medium. Even in the tiger economies of the Far East they overshadow the giants in terms of numbers employed. One way of viewing current developments is to see corporations as the system integrators. These producers of cars, aircraft and consumer goods no longer manufacture all of the piece parts. Some of them manufacture nothing - they just assemble the components as supplied. They no longer cut the grass, provide food or security guards either. Everything has been outsourced. Vertical integration has been overtaken by virtualisation - no company, no matter how big, has all the resources necessary to bring products to market. Technology developments and demand are just moving too fast for the old model to work. An unfortunate side effect for the small to medium-sized business has been the increased potential to go bust through corporate and market fickleness. Many businesses have too many eggs in one basket - and some have only one basket! How then are they to survive? The Internet might look like an unlikely solution, and yet it is already providing a boon and a lifebelt for many. How could such a world, built by a bunch of anoraks, benefit, let alone save, any business? Well, the networked world of electronic working defeats both geography and time. Everything can be done much faster, and the limits of geographical separation are minimised. Until recently I had to travel to a book store to discover they did not have the copy I required. It would then take a month to order what I required and call me to collect from the shop. So I had to wait, make two journeys, and pay a high price. Now I buy all my books from Palo Alto California. The Internet book store always has the titles I need at American prices, and despatches direct to my home in less than two weeks. So I get what I want in a shorter time, at 70 per cent of the British price, and don't have to travel. A computer company I consult with in America decided to put all of its sales, marketing and customer support on the Net. Inquiries have rocketed to 7,000 a week and sales have doubled. Grocery stores, builder's supply yards, limousine services, clothing and office supplies, estate agents, banks, and many more businesses are doing business over the Net in the States. In Europe the larger corporations dominate this world of electronic commerce. And here is a danger, as Stateside companies could launch an export drive into Europe over the Net - at American prices. An invisible market is being built. For those not involved, the mechanism of their demise may remain a total mystery - they may never see what business advantage took away their livelihood. The business world is no longer a village, a city, or country. It is a planet accessible by computer and modem. Peter Cochrane holds the Collier Chair for the Public Understanding of Science & Technology at the University of Bristol. His home page is: |
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