In this session, we're gonna take a look at the strategic implications of the world beyond the chasm. So first of all, the world beyond the chasm is a very complex world. At every inflection point in the technology adoption cycle, the buyers are changing. Their motivations to buy are changing. Marketing strategy is changing, often reversing itself. Example, at one time we may be thinking mass market, and another time we're thinking a segment. A third time we're thinking just niche, and we are cycling back and forth. So for example, when we cross the chasm or in order to cross the chasm, we were advised that we should focus on a very specific niche. Then the moment we hit the tornado, we are now being told we should focus on a very broad market. Then again when we get out of the tornado into Main Street, we are told that we should again start narrowing our focus. So the premium really is on the company to stay very alert and very agile, and to continue shifting and accommodating its strategies and focus to best suit the needs of its customers and markets. The second thing which makes it a very complex world is that the power and its distribution between the various actors in the system, is constantly changing. It's being redistributed, it's being erased, it's being awarded. So for example, we said that in the tornado, the old companies get severely penalized who have not kept up and who have not updated their offerings. We also said that when we get into Main Street, power returns to the end users. They had lost it to the purchase managers in the tornado. So, the constant shifting of power, the constant redistribution of power, it being erased, it being redistributed and awarded to new actors, is constantly also happening in the world beyond the chasm. Now, there are strategic implications to this complexity. A rapidly shifting market place requires rethinking about traditional business strategy and on four main dimensions, strategic partnerships. Who should we partner with? Who should we collaborate with so that we can offer more unique and richer value to the customer. What competitive advantage do we have? What is it that we can do that our customers can't imitate or emulate? Which would then lead us to a preferential situation, or a preferential advantage with our customers. Positioning. How should we position ourselves relative to competition? Now we haven't seen this. We will, in later sessions, but positioning is very important because the market place needs to know who you really are as a company, and based on that they will have a better understanding of why they should do business with you, or should they do business with you at all? And lastly, organizational leadership. The complexity of beyond the chasm places significant strains on leadership as well. So, let's start with partnerships. Once upon a time, it may have been fashionable to be a lone ranger. In fact, you may love Lone Ranger movies. But in the business world today, especially in the high tech world, okay, it is not fashionable to be a lone ranger. In today's global, connected, knowledge-dominated world, that's what the world we live in, the ability to collaborate is a critical and necessary skill. Very important okay high tech markets especially, put a premium on strategic partnerships and alliances, why? Because we need to be very quick with our product development. We need to get into the market very quickly. So speed to market is at a premium. Risks are high. Resources are low. All this is an excellent recipe for collaboration. Now, there are several types of strategic partnerships, okay? Let's take them one at a time. The main three. The first is a vertical partnership. From raw material to finished product to consumption to recycling or waste. That's the chain that we are talking about, vertical, okay? So, for example, companies may partner with their suppliers, like with Intel. Intel inside. You can't be a computer company and not partner with Intel, okay? They may partner with resource providers, like VCs or outsourcing companies, okay? Or they may partner with their channel members, like Accenture. Or, as in the case of Mozilla, with their customers. And when we talk about innovation, we will be talking about collaboration and co-creation which happens with customers. But here are some examples of how a company can effectively partner vertically, okay, with suppliers, with resource providers, with channel members and with customers. The second model is horizontal partnerships. I am offering a computer, but I'm not offering a printer. The person who uses the computer also uses a printer. I can then now develop a partnership with a printer manufacturer so that my customer can get both the copier and the printer, okay? If you're making a tablet, you may not be making the cover for the tablet. You may not be making the keyboard for the tablet. You may not be making the apps for the tablet. That's where horizontal partnerships come into play. And lastly, there is a model that also allows companies to partner with their competitors, and there's actually a technical word for that in the strategy literature. It's called co-opetition. It's a union of the word collaboration and competition. And so, for example, there is a DVD forum that has all the DVD manufacturers in it. That's co-opetition. Or there's EPEAT electronic product environmental assessment tool. As you are probably very well aware, that the recycling of electronic waste is one of the most bothersome problems today. And all the manufacturers, consumer electronics manufacturers, and electronic product manufacturers, are part of this consortium. So, that's another type of partnership. What about competitive advantage, which is the next strategic implication? You may remember, that in a previous session we talked about three bases of value disciplines. We talked about operational excellence, we talked about product leadership or product excellence, and we talked about customer intimacy, okay? When we are catering to the early market, which is dominated by visionaries who love technology, what is valued, what is rewarded, is product leadership. They want to see the most state of the art technology. The moment you cross the chasm and enter the bowling alley, okay, you've got to start getting intimate with your customers. You've got to start understanding the niche, you've got to understand what is it that they're looking for, so that you can meet their needs completely. You've may remember that a premium was on developing a whole product for a specific niche, so customer intimacy comes into the picture. As soon as you enter the tornado, customer intimacy goes out of the window, and what did we see? Because demand is ballooning the emphasis is on fulfillment. The emphasis is on operational excellence. The emphasis is on getting things done, okay? Product leadership still stays in the picture. But then the moment we enter mainstream, okay, the operational excellence issues stay, but the product leadership issues go away, and customer intimacy now returns. Why? Because the power is back with the end user, and the end user needs very, very good reasons to buy our product. Which is why we need to resort to customer intimacy so we can get better insights on our end user, and build those insights into desirable and attractive features in our product. Now, this aspect of positioning we have not yet discussed. As I said, we will be discussing it later, but at a minimum, let's just think of it as the ability of a customer to understand where exactly we fit into the market place. So, if we are in 3D printing, and we are offering 3D printing services. Well, it needs to understand where do we fit in with respect to other companies that are also offering those kinds of services. Now, they want to know are we an enabler? Are we a facilitator? Or are actually gonna be replacing the current technology? Are we a complementor? Just like a printer manufacturer complements a PC manufacturer. Or are we a innovator? Means we're coming up with brand new kinds of products and services and raw materials. So we may have come up with an absolutely high performance plastic which is totally corrosion proof, which then replaces metals. And that would be our positioning in the market place. Lastly, what about organizational leadership? Well, it differs depending on which stage we are in. Bowling alley, tornado, Main Street. Okay, in the bowling alley and it is event driven. In the tornado, it is process driven. And in the mainstream also it's process driven. The focus in the tornado is internal. We want to produce as much product as we can so that we can sell to the market place because demand is ballooning. In the Main Street, that focus now shifts external. Why? Because power returns to the end users and therefore we have to focus on their needs. In terms of the key disciplines, I'll just mention a few of them. Okay, that when you're in the bowling alley, the emphasis is on business knowledge. When you're in the tornado phase, the emphasis is on systems engineering. And when you're on Main Street, the emphasis is on convenience engineering. Why? Because you want to make your product as user friendly as possible. Okay, in the bowling alley, the emphasis is on application. What can my customer, what can my niche market do with my product? In the tornado, it's on sales and in Main Street it's on marketing, how can I best serve my customer, okay? So in summary, markets and customers beyond the chasm are complex and volatile. This requires a constant adaptation of tactics. Marketing tactics, competitive tactics, leadership tactics and strategies. The world beyond the chasm requires companies to be adept at four competencies. Establishing strategic partnerships, securing a competitive advantage, positioning their businesses, and providing effective leadership.
