If members of the U.S. computer and communications industry are going to survive in the next millenium, management will have to take off their blinders and look at the total information processing and dissemination industry on both a global and individual basis. They will have to learn from their foreign competitors, rather than blindly using the NIH factor. They will have to understand and learn how to function smoothly in an interdependent business environment.
In tomorrow's race for survival and market share, technology will take a back seat to marketing and distribution--worldwide marketing and distribution. Managers who haven't mastered the selling of products and services in their own backyard, let alone outside our borders, will have difficulty making the transition in today’s instant and global Internet marketplace. The numbers have now reached proportions that can no longer be ignored.
According International Data Group (IDG), there are more than 240 million business enterprises worldwide--with only about one-third of them in the U.S. IDG and IBM estimate that these organizations employ more than 500 million people who either use computer systems or are potential users. Two-thirds of these are connected to the Internet. Again, less than one-third of these people are in the U.S.
Industry Maturing?
While Business Week recently reported that there were signs of the information processing and dissemination industry maturing, it is more likely that we are morphing and entering a new phase-similar to a youth becoming a teenager. Management still has a lot of growing to do ... and a lot to learn.
Of highest priority will be management's willingness to listen to customer and prospect needs and requirements. Then they will be able to produce hardware and software as well as services that satisfy those needs, rather than plunging ahead to develop the next "giant leap in technology." But for some firms, this is still a major stumbling block.
And, if we fail to listen to customers who speak English, how will we ever listen to customers who speak French, Japanese, German or any of the other languages of the globe?
...more
Global Marketplace
Globalization of our listening and marketing techniques will become mandatory, according to market researchers. They predict that in the next century, nearly two-thirds of all information processing and dissemination purchases will be made outside the U.S.
Firms must have a sound, proactive plan in place on how to reach and work with organizations in these other countries. If they don't, they should face the reality that the markets will be closed to them. The European Community's (EC) economic integration is in place. This will make it even more difficult for new entrants to penetrate this profitable marketplace. Japanese and other Far Eastern countries already have significant hurdles in place. Without strong plans and relationships in these two key arenas, U.S. suppliers will only have fiscally unstable Third World markets available to them.
Developing solid and profitable relationships in these countries is not a task for impatient or immature individuals.
Joint ventures, partnerships and strategic alliances in these countries operate under a totally different set of rules that U.S. manufacturers often find "foreign." In the U.S., we hire and fire distributors and representatives, almost at will, with 90-days notice or less. Applying these procedures in the development of international relationships will doom suppliers to failure.
The Japanese Market
In order to sell hardware and software in Japan, you must generally sell to one or more of the many major trading companies. These companies then sell to national distributor networks who, in turn, sell to local distributors. Finally, these distributors sell to retail outlets, who ultimately sell the product to the public.
And if your product interferes with any of the distributors' own lines, they will find dozens of reasons for not handling it.
While it is a long-range and expensive strategy, the establishment of joint ventures or Japan-based subsidiaries are generally the best way to enter the market.
IBM hires Japanese managers, uses Japanese sales networks and adapts their businesses to the Japanese environment. Xerox and Hewlett-Packard, on the other hand, established joint ventures with partners that required U.S. sales channels, so that both parties benefitted.
...more The key is that, because of the distances involved in these strategic alliances, as well as the language and customs barriers, U.S. manufacturers must relinquish part of the control over their marketing and sales activities to their overseas partner. As a result, it's important for management of both organizations to make certain that their respective management styles can exist and thrive together.
International Applications
Since today’s business and industry has become global because of the Internet, we can project with certainty that global marketing is required. And, international information solutions will be necessary in order to compete in these worldwide markets.
Meanwhile, more attention is being placed on the needs of the individuals who must gather, manipulate and use the information that's on the computer. (IDC recently forecast that more than half of the money spent on hardware and software since the mid-1990s is being used to meet departmental and individual needs.)
If these estimates are valid, it means that Internet sales and channel partners will become even more important to hardware/software manufacturers. Channel partners are the people who will have to customize the systems to meet specific needs, not only here, but in other countries, as well.
Far from being an industry that is approaching maturity, players will have to step back and gain a greater understanding of the needs of the global marketplace as well as the individuals. Yes, the need for innovation will continue, but it will be innovation in relationships and interrelationships ... not technology.
Firms outside the U.S. are already investing patience, time and money here and elsewhere. If U.S. hardware and software firms don't broaden their horizons and their awareness, they will not only have blinders on but will be let out to pasture.
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INFORMATION MARKET IS BOTH GLOBAL AND INDIVIDUAL - To learn more about this author, visit Andy Marken's Website.
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