Platt Perspective on Business and Technology

Rethinking vertical integration for the 21st century context 7

Posted in business and convergent technologies, strategy and planning by Timothy Platt on May 12, 2016

This is my seventh installment to a series on what goes into an effectively organized and run, lean and agile business, and how that is changing in the increasingly ubiquitously connected context that all businesses, and that all individuals operate in (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 577 and loosely following for Parts 1-6.)

I have been developing this series up to here, with a goal of setting up a seeming conundrum, where a single real-world business pursues what is essentially the same business strategy twice in a row, but achieves very different levels of success from it those two times. I chose Apple, Inc. as my working example company, and to briefly repeat my take on what has happened for that business there, I stated that:

• Apple failed to break out of a limited niche market position for desktop computers and related hardware and software, in spite of the fact that they offered the most user-friendly and innovative products that were then available to a new and growing personal computer-buying market.
• But when they pursued essentially the same in-house vertically integrated business model for wirelessly connectable tablets and smart phones and related products, they became the largest and the most highly valued company in the world. And this time their products came to in effect define their targeted market, setting the standards that their competitors in it would strive to meet.

How did Apple achieve such different results the second time when they were in fact offering essentially the same level of product innovation and usability both times, and when as just noted they did so as a matter of pursuing essentially the same business model both times – and when in both instances they sought to position themselves in terms of how innovatively creative they and their products were?

I raised the possibility in postings leading up to here in this series, that the outcomes-defining difference between those two attempts arose, because the second time this company could leverage the value of ubiquitous, anywhere-to-anywhere connectivity and communications. And they were able to capitalize that second time on the value creating potential that is inherent to these emerging communications capabilities.

I devoted a significant measure of Part 6 to outlining a progression of issues that I will successively address in examining that contention. And I am going to systematically examine and explore all of the issues and topic areas that I raised there. But before I begin systematically pursuing that goal, and to set the stage for the narrative to follow, I offer an easy and obvious answer as to how this marked outcomes difference arose, that I will come back to as a more fully examine the underlying processes and issues involved.

• When a business can tap into the types of communications and information sharing capabilities that I refer to here in this series,
• They can use those capabilities in-house and at least as readily as they can when reaching out in their marketing and other outwardly facing activities. This means they can more effectively carry out their own basic processes more effectively, and for all of their basic business operations, their product design and development and production systems, their product distributions and marketing and sales, and for their customer support systems. Business systems friction can be reduced, and innovative new operational options can become available for them to work through.
• And on top of that, and as already noted and a number of times in this blog, open and even globally reaching real-time high bandwidth communications and information sharing among potential customers, can and will open the doors to larger and even globally reaching marketplaces, where potential consumers can buy online from virtually anywhere, as readily as they can communicate with others virtually anywhere.

These communications and information sharing capabilities make it easier and more cost-effective to do business and at the same time they maximize the possible marketplace available and for any business that can tap into them and their potential. But even as I acknowledge the validity of those generally stated points, I have to note that they gloss over a great deal of detail, that has to be examined if the differences in outcomes that Apple has seen, and as touched upon here, are to be understood. And at least as importantly:

• Glossing over the details of how ubiquitous online connectivity does and does not work, means ignoring where innovative ways to participate in these larger conversations might lead to increased competitive advantage, for businesses that do this better.

So I set up my list of points and issues to address in Part 6 and I begin delving into them here, and with a discussion of information flow in general, as open communications become both possible and even routinely commonplace. And as noted at the end of Part 6 that means my starting with a discussion of information sharing as a due diligence matter, where I would consider issues such as:

• Single and multiple sourced information and information validation, and
• Noisy systems and their impact on friction levels faced.
• And uncertainty – and how systems noise here, and friction and uncertainty are related.

Set aside considerations of language differences between and among online and wireless telephonically connected participants in the larger online community, and language barriers they face, at least to start when considering these issues. And set aside differences in culture and perspective, and differences in national and regional law as they would impact upon and shape what information and what communications channels are going to be societally available, and to whom and with what potential barriers interfering with whatever communications and information sharing that are attempted and allowed. And even with these factors discounted, the overall global community that could potentially enter into and collectively comprise an idealized single overarching potential global market is still not going to be homogeneous and equally connected or connectable. That overall global community is still not going to be equally open to full communications and information sharing, from anywhere to anywhere and with equally effective information sharing taking place in all directions. All potential nodes in this larger system: all communicating people in this potential global system are not going to be equally available and even just in principle. And what information and insight that could realistically be shared is not all going to be unbiased and unfiltered as far as a priori assumptions and preconceptions are concerned, and on either the information source or recipient side.

• And where communications and information sharing barriers and filters are in place, it becomes inevitable that corresponding barriers to anywhere to anywhere commerce are going to be there too,
• As trade is as much driven by communications as it is by the limitations to the products and services that would be bought and sold – as business transactions are always communications-driven.

This brings me to the core point that I would raise in beginning this line of enquiry and its flow of discussion. When thought and resulting decision making turn to consider our emerging interactive wired plus wireless communications and information sharing systems, it is probably inevitable that they, and all issues related to them and their use would be conceptually framed and addressed at least initially in technological terms. These still emerging capabilities are in fact assembled and realized as the functional product of a still rapidly evolving and expanding technology-based hardware and software infrastructure.

When I offered the three initial discussion bullet points in Part 6 that I just repeated here, I couched them in what could be construed to be primarily technical terms. And some of the further discussion points that I raised in Part 6 are in fact very specifically technologically motivated and oriented in nature. But ultimately, the issues that I raise here and that I will be discussing in upcoming series installments are not fundamentally technological in nature. They are sociological, psychological and political, among other things – they are interpersonal, as that perspective can be viewed through multiple types of lenses. And that is why I set those three to-address points here, in due diligence terms the way that I did. They deal with technical points but they can only be answered in human usage and human behavior terms, where simply offering the technically best is not automatically going to lead to creating the greatest market capturing and revenue generating business success, and for either business or consumer.

With this background discussion in place, I am going to start explicitly discussing the points and issues of Part 6 in my next series installment, starting with the three bullet pointed issues repeated above. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

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