Friday, 20 May 2011 04:47

The Future Calls For Integration - From Apple to Microsoft to Facebook to Google

It seems like that this spring is an exciting business season. It is not surprising to see that Apple won the most valuable brand in the world since it introduced the iPad 2. Facebook continues to be the fastest growing company. Google started its "Groupon" business beta test and opened its online music service. And last week Microsoft purchased Skype to join the video chat game. With all the achievements and moves of the big tech companies, FiG sees a future that will call for great integration.

Why integration is important?

  • Power of Network Effect: If you are not familiar with the term "network effect", just think about Facebook and Twitter for a moment. Why do you use Facebook? Because your friends, colleagues, and family are using it.  Because it is a convenient channel of communications. Because one click connects every audience of yours. The success of these businesses depend on the number of users. The more users, the more value: this is the network effect. The network effect also exists beyond the social media. No matter what kind of business you conduct, the primary purpose is to attract consumers. Properly integrating network effect into your business will automatically expand your prospective consumer base. This is why Apple invented iChat and FaceTime. This why Google constantly increases features on Gmail. This is also why Microsoft purchased Skype despite of Skype's negative profit record.

    • What does it mean to marketing/sales managers: To marketing/sales managers, the network effect is difficult to create and even more difficult to manage and sustain overtime. eBay and My Space for instance, once heroes of network effect, both struggle today to regain their past dominance. The trick lies in the constant and increased value offering and the flexibility to adapt to changes.

  • Multiple-Function Benefits: Last week FiG posted an article of "Tablet Takeover Suggests Ereader's Demise" on Facebook. In the article, the writer expressed concerns over the future of Ereaders, as consumers are increasingly trading single-purpose devices for multifunction gadgets. According to a survey by the Nielsen company in April 2011, owning a tablet impacts the use of other devices, among which negative impacts include that on desktops, laptops, netbooks, eReaders, portable game consoles, and media players; and positive impacts include that on mostly online TV/movie streaming services and the usage of apps. The results mean that consumers prefer multiple-function devices over single-purpose ones. Big brands know it, and they are heading toward this direction by creating integrated systems with multiple services and capabilities.

    • What does it mean to marketing/sales managers: The multifunction feature is a double-edged sword to marketing/sales managers. On the benefit side, it is always good to tell prospective consumers that your products can handle multiple tasks. The disadvantage is that it's challenging for marketing/sales managers to focus on the core value of a multifunction product. What is worse is that the core value may vary to different consumers. A couple of solutions to overcome the problems are an integrated marketing strategy with customized core values and a strategy development to reposition for different customer segments.

To sum up, FiG thinks it is of great importance for marketers to keep their eyes open in an ever-changing society. Based on this business model, it is not always necessary to be the first mover, but it is essential for every company to maintain flexible for follow up. With limited resources, time, and focuses, it is very helpful to benchmark a company or pay extra attention to the leader of an industry, to see what they are up to, and whether there is an unforeseen trend that is going to influence the current industry that your company is in.