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10 August 2007
05 August 2007
The degree to which a firm owns its upstream suppliers and its downstream buyers is referred to as vertical integration. Because it can have a significant impact on a business unit's position in its industry with respect to cost, differentiation, and other strategic issues, the vertical scope of the firm is an important consideration in corporate strategy.
There are 3 different types of vertical integration:
- Backward vertical integration (expansion of activities upstream)
- Forward vertical integration (expansion of activities downstream)
- Balanced vertical integration (the company sets up subsidiaries that both supply them with inputs and distribute their outputs.)
The concept of vertical integration can be visualized using the value chain. Consider a firm whose products are made via an assembly process. Such a firm may consider backward integrating into intermediate manufacturing or forward integrating into distribution, as illustrated below:
Example of Backward and Forward Integration
Two issues that should be considered when deciding whether to vertically integrate is cost and control.
- The cost aspect depends on the cost of market transactions between firms versus the cost of administering the same activities internally within a single firm.
- The second issue is the impact of asset control, which can impact barriers to entry and which can assure cooperation of key value-adding players.
29 July 2007
Charles Handy popularised a typology of organisations and cultures. Handy also uses four Greek gods to illustrate his basic approaches and the organizational cultures that result.
Power 'ZEUS' Culture:
There is one source of power and influence. This is most likely to be the owner(s) of the organisation, who strive to maintain absolute control over employees. there are few procedures and rules of a formal kind.
Role 'APOLLO' Culture:
In this version of culture, people describe their job by its duties, not by its purpose. It is a bureaucratic organisation, where the structure determines the authority and responsibility of individuals and there is a strong emphasis on hierarchy and status.
Person 'DIONYSUS' Culture:
This is characterised by the fact that it exists to satisfy the requirements of the particular individual(s) involved in the organisation. The person culture is to be found in a small, highly participatory organisation where individuals undertake all the duties themselves.
Task 'ATHENA' Culture:
this is a 'can-do' attitude, often created by the project teams or matrix structures in an organic manner, respective to change.
22 July 2007
The world of business is intertwined with conversations.
- The industry is talking, your customers are talking, your competitors are talking
- You need to be a part of those conversations. If you don't, your market will pass you by. If you stay silent, people will begin to look at you as uninventive, arrogant, or secretive. I will argue for the importance of these conversations and how you can enter in a positive way.
You need to be a part of the conversation
Your customers are asking to be a part of your company. They are actually demanding it. Your customers are no longer satisfied with seeing your brand - they want to see the people behind your brand.
If you cannot foster dialogue with your customers, how do you expect to retain them? You need a relationship now to both sell your product/service and to retain your customers.
In gratitude for you taking a genuine interest in them, your customers are more likely to be loyal to you, to spread positive word of mouth, and to give you insight on how to improve your product.
How do you enter the conversation?
The blog is your conversation. Here are some great tips on how to make your blog your most effective communication tool.
- Be authentic
- You need to care about the customer enough to take down some walls. Be clear, be honest, and be real.
- Blogs are real time - if a post takes you an hour, it's taking too long. You are crafting far beyond your authenticity.
- Customers value transparency. This means that you should admit when you make mistakes, be open if there are problems, talk about your successes, and make an effort to post regularly and with some passion.
- Invite interaction
Blogs are a very easy tool. You have your comment box. Your customers will use it. And the media will also get involved here too. If you show them you know your stuff, it will pay off.
- Make sure to watch your comments - interact back online so others can see. At the same time, take it to the next level by sending off an email.
- Say thanks for the comment - get that conversation going to the next level. You never know when it will pay off for a big sale or a great article about you.
How can you post to invite conversation?
- post relevant information, fairly often (it's best to start posting a lot at first to attract the spiders and your biggest readers)
- offer some insight and opinion
- ask questions
- link to people who've talked on the same topic - supplement their arguments or go against them, either is fine
- linking out attracts linking in
- weigh your posts as a mix of short timely posts and longer more authoritative posts
- use your strongest key phrases in the titles of your articles
- although your content may revolve around your industry, leave self promotion to less than 25% of your posts
15 July 2007
So, you know you should have a blog but you don't quite know how to set it up or how to make it an effective communication and SEO tool. Here are some great ideas to get you started:
1. Choose your Categories as Logical Tags
If you use a blogging software such as Blogware, your categories are your tags. What is a tag? It's a logical name for a category, post, or picture. Think of it as a filing system. It's the way you tell yourself and others what you are talking about.
You can add tags to any post or category and your post will then come up in Technorati for that subject. For example, if your category is "Sunset photos" and somebody searches Technorati for "sunset photos," they will find you. Your categories should be logical and should flow from what you know about how people find you when searching.
2. Subscribe to & read other Blogs
Use an aggregator such as Bloglines or NewsGator to subscribe to other blogs and news sites that have RSS feeds - make sure to organize and prioritize your content into folders or hierarchies. Choose sites that have content relevant to your business or interests. You should also subscribe to the RSS feeds of key words or phrases such as your company name, your name, tags, or industry key words. You can do this using PubSub and Technorati.
Knowing your news is the first step to having an opinion on it, writing about it, and using it to make your business decisions.
3. Create your Blogroll
It may seem like a simple thing, but telling someone you like their blog is as easy as adding them to your blogroll. If they do what I've suggested in point 2 above, they will know you've done this. So, they see you like their blog. They check you out. Maybe they like what you have to say. You both comment on each others' blogs. They add you to their blogroll. And there you have a relationship. A blogroll is your way to connect with the "important" people in your industry - but it's also a great way to share Google juice between friends. Remember, inbound links count in SEO strategies.
4. Plan your Content Choices
Who are you writing for? What can you talk about that offers useful insight? What do you have an opinion on?
Play to your strengths here. If you are interested in what you're writing, it will show. You will have done point 2 and know what there is that is hot in your industry. Comment on it. Be argumentative if you wish. Opinion is good. Don't forget what your blog is about - your categories should connect with what you talk about. If you write something and don't know where to put it, it's likely not the right blog for that post.
But set some limits. Remember, what you say will be read by many, including your customers, your investors, and your competition. So set some boundaries. Know what is proprietary and what is not. What is insight and what is heated opinion. Especially when it comes to your competitors - know how far you want to take this talk - some of your opinion here, especially negative comments, can be considered flaming.
One other little tidbit is to decide on your angle. Will you be the person who writes about all the new stuff happening in your industry? Or will you be the person who chooses carefully what to write, forms an opinion, and offers out a well thought blog post? You must choose what mix of breadth and depth suits you best.
08 July 2007
Why blog? Because it's just about the easiest marketing tool out there.
1. One more tool in your toolbox
Not only is blogging one more tool you can add into your marketing mix, it also increases your efficiency overall. Think of it as one more way you have to stick out your hand and grab some customers. The more hands, the more customers.
As an online tool, I venture to say it is your strongest tool ever. Your brochure website is dead. It won't work. If you update it daily, great. But why would you spend all that labourious time doing so? Blogging is the new content management system that offers easy access for everyone to do it. Blogging is powerful by its nature of easy, fast updates and by its interactivity - comments and trackbacks are your conversations.
Think of blogging as DIY PR - anyone can get right in there and vouch for your company! Unlike PR, blogging is not (and should never be!) flack! Blogging MUST be authentic. And perhaps the most powerful assertion for this new PR: people come TO your blogs because they want to hear what you have to say; your traditional PR is pushed out to people who most naturally block it.
2. Google Loves Blogs! SEO/SEM
SEO is guiding development so that your site comes up high in natural/organic search results. Google, for example, measures website ranks based on their PageRank system. This PageRank looks at the inbound and outbound links from a site as votes. The more votes that come in, the better your site must be. And the more votes that come in from sites that themselves have high PageRank gives you a better vote.
So, why are blogs good with Google? Because bloggers are very open with their linking - not with the usual focus of giving people good rankings, but just as a matter of course. Bloggers link to others who have talked on their topic or those who come up in the writing process. It's a natural part of the writing. Blogs are conversations. Bloggers don't often link to non-blogs.
I have personally seen a corporate blog take a corporate site up from page 3 on key phrases to page 1 in little more than two months. It is a powerful SEO tool.
3. Creating conversations
* With your customers
* With your competitors
* With your partners/investors
* With the media
People are talking about you and your industry. You need to be a part of the conversation before it outruns your company and you get lost in the dust and before your customers get fed up with your monologues. I will talk more about this in another post later.
4. Industry Insight
By listening to the conversations you will see new opportunities, be able to let your customers lead your development, spot the trends (the stronger the trend, the more you will see it coming up in blogs), and perspective. What you hear on the news or read in the paper is, unfortunately, quite restrictive. Blogs give you the perspective of opinion and you will notice time and again bloggers who have researched the topic historically for insight.
The process of blogging is your strongest research method.
5. Reputation capital
Being real, relevant, and authentic ups your reputation capital more than any PR spin could ever do.
Caveat: do not blog only for the sake of marketing & sales
Don’t set up a blog if all you want is another way to get customers. It acts as an effective marketing tool, but it won’t work unless your focus is on communication, relationships and authenticity.
01 July 2007
- One more tool in your toolbox
* Dialogue not monologue
- Google Loves Blogs! SEO/SEM
- Creating conversations
* With your customers
* With your competitors
* With your partners/investors
* With the media
- Industry Insight
- Reputation capital
How to get started
- Choose your categories – tags, Technorati
- Subscribe to & read other blogs – RSS
- Create your blogroll – link to your friends and colleagues
- Plan your content choices
- Set some guidelines
- Monitor the blogosphere - PubSub, Feedster
- Relationship building
- Customer interaction
- Trackbacks and comments
- Posting tips
*link to sources & competitors
*be authentic and interactive
- Syndication and RSS
- Promote your blog
- Follow the posting tips * authenticity * linking * shared knowledge * key phrases
- Comment on other blogs
- Watch your trackbacks
- Submit your URL to directories
- Have good features
- Link to yourself
- Avoid link exchanges!
- strong SEO results
- more traffic
- customer interaction and loyalty
- new business, if done right!
23 June 2007
In consulting engagements with General Electric in the 1970's, McKinsey & Company developed a nine-cell portfolio matrix as a tool for screening GE's large portfolio of strategic business units (SBU). This business screen became known as the GE/McKinsey Matrix.
The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is determined by factors such as the following:
- Market growth rate
- Market size
- Demand variability
- Industry profitability
- Industry rivalry
- Global opportunities
- Macroenvironmental factors
Each factor is assigned a weighting that is appropriate for the industry. The industry attractiveness then is calculated as follows:
Industry attractiveness =
|factor value1 x factor weighting1|
|+||factor value2 x factor weighting2|
|+||factor valueN x factor weightingN|
Business Unit Strength
The horizontal axis of the GE / McKinsey matrix is the strength of the business unit. Some factors that can be used to determine business unit strength include:
- Market share
- Growth in market share
- Brand equity
- Distribution channel access
- Production capacity
- Profit margins relative to competitors
The business unit strength index can be calculated by multiplying the estimated value of each factor by the factor's weighting, as done for industry attractiveness.