Platt Perspective on Business and Technology

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 2

Posted in social networking and business, strategy and planning by Timothy Platt on July 7, 2017

This is my second posting to a series on disintermediation, focusing on how this enables marketing options such as gorilla and viral marketing, but also considering how it shapes and influences businesses as a whole. My focus here may be marketing-oriented, but marketing per se only makes sense when considered in the larger context of the business carrying it out and the marketplace it is directed towards (see Part 1.)

I began this series with a general orienting line of discussion that ended with brief single bullet point descriptions of two specific case study examples that I would delve into, to take the issues raised in Part 1 out of the abstract:

• A new, young, small startup that seeks to leverage its liquidity and other assets available as creatively and effectively as possible, and from its day one when it is just starting to develop the basic template that it would scale up from,
• And a larger, established business that has become at least somewhat complacent and somewhat sclerotic in the process, and with holdover systems and organizational process flows that might not reflect current actual needs or opportunities faced.

I begin here with the first of these examples and with the challenge of a new and still essentially embryonically small business, as it seeks to develop so as to successfully compete with larger well established enterprises. And in the course of developing that narrative, I of necessity will consider the second case study example as well, as an important element of the context that a startup would have to develop in (at least initially considering larger established businesses in general here.) But starting here with the first of those case studies and with that small newly forming startup:

• What do they have to offer that would make them competitive, and what can such a startup offer in an immediately practical sense that can enable it to launch and to grow to a point where it can successfully compete as a profitable venture?

A large corporation might be able to compete with a significant level of overall effectiveness across a wider range of business and market-facing activity and it might be able to cost-effectively offer a wider range of products and services than its smaller competitive counterparts can. And this definitely includes startups and early stage businesses. And this definitely includes smaller businesses in general too and certainly in an online marketing and sales context where local proximity to a customer base might not in and of itself make a real difference for a smaller, locally oriented business. But these smaller ventures can succeed and even thrive in this type of competitive environment, in their own particular niche areas: if they can offer something unique that would appeal to spending consumers, and if they specialize effectively and focus on their niche specialization in doing so.

Gorilla marketing and the use of novel and distinctive marketing approaches, geared and designed to appeal to their own particular niche market audiences, enter into this discussion here, as does viral marketing where members of a customer base and potential marketplace that a business would target, can be brought in to help them with their marketing through online social media and other word of mouth, or word of tweet and so on sharing.

Disintermediation strategies that are operationalized in ways that actively make members of the target market community into marketing allies there, can in fact serve as “great equalizers,” giving even small and new businesses a competitive chance when facing off with their bigger and more established rivals. And that particularly holds true when big per se, in an established market-facing business is coupled with “set in their ways” and even hidebound and rigid in what they do and in how they do it.

I often write in this blog about the need to be lean and agile and adaptable, and in my experience as a consultant it is often the larger and more established businesses that are in the greatest need of hearing that lesson. They are the ones that need to find ways to become resilient in the face of new and emerging competitive patterns and processes that other businesses are confronting them with: new and creative upstarts included.

So want can a larger, Goliath of a business do to effectively compete against smaller Davids, and particularly in rapidly changing markets and industries where they are constantly facing new and perhaps creatively novel niche challenges? A large and diverse corporation that offers a wide range of perhaps only somewhat overall-connected products and services, can find itself facing several and even many such niche competitor challenges at once, each at least somewhat impinging on a different area of its overall business activity. But the leaders and strategists of such a corporation do not in most cases have any way to know a priori which of these new and emerging niche opportunities will emerge as significant and as significantly competing in their marketplaces and in their customer bases, even if they know as a matter of basic principle that at least some of them hold real promise and offer real threat too. And I add that lack of prescient foresight usually holds true even when larger and established businesses could at least potentially develop their own best futures from selectively pursuing the right-for-them new and emerging early stage niche opportunities too. Remember, every great new industry as a whole begins as a new and disruptively creative startup, or as a niche sideline or extension of an older and more established business that it in some way sprang out of, and even as it was seen as of secondary value when starting out for the small pioneer and early adaptor market it first attracts.

Goliath Inc. might be large now, and it might have good name brand recognition and solid sales and reserves to support it. But its ability to compete long-term and certainly under these circumstances, means its being able to capture and develop the right niche markets too, and in the face of those nimble specialty startups that seek to build into them.

As a perhaps extreme alternative to that, I cite the expression “death by a thousand small cuts.” And with that, I explicitly note that I chose a title to this posting that sounds more oriented toward the little guy business and startup, and I am writing about them too. But I am also very definitely writing about larger and more established businesses that can become sidelined by failure to develop into new and emerging niche opportunities, that might begin small and even appear to be insignificant when measured against current cash flow metrics for business lines already established, but that might also represent that larger organization’s best possible next step forward future that it should be developing into.

How can a solidly entrenched business such as Goliath Inc. remain agile and effective in the face of change and its ongoing challenges, where it might not be apparent where new and next is simply new and fad, and when it is new and their best possible future too? How can they know when to simply ignore what might only be marginally competing startups and small niche companies and their markets and opportunities, and focus elsewhere and on their own established core strengths? And how can they best know when they should move into a new emerging innovative niche opportunity too?

• Essentially as a matter of definition, new in the sense under discussion here means outside of the core competency and the core business model arenas of already established businesses. So I am not writing here about circumstances where an established business would automatically be expected to know what to develop and expand into and what to leave for others as falling outside of their area of strength and need.
• I am writing of future developments and not of any particular business’ now and current – and even for the smaller enterprises that dream of capturing new markets out of emerging and still forming niches.

How can and do larger established businesses respond to this challenge when they do see need to act? The obvious and I add first recourse answer to that is acquisition. Established businesses buy out newer, younger, agile and creative businesses that have arrived at and developed new products and the technologies that underlie them, and that have at least proof of principle tested them in real marketplaces. And this does reduce both development costs and risks from attempting to maintain what might otherwise have to be significant research and development programs in-house, while affording them opportunity to obtain exclusive ownership of new that would meet their specific needs.

These points are all valid but let’s consider some of the perhaps hidden costs in that. And I begin with timing costs. The more rapidly changing an industry and market, the shorter the value-offering shelf life of any given outside acquired acquisition, and both because it will be superseded by a next generation alternative and because other businesses, including new agile young startups are building for those niches too.

There is a reason why large businesses that follow an acquisition route here, often end up as serial small business acquirers and with many of the largest corporations taking on as many as hundreds of such smaller businesses over the years.

And now they have to somehow integrate all of this into their overall systems. Do they risk the loss of what has individually made these acquisitions special and valuable to them in the first place, by forcing them in what might be the wrong ways to fit their standard corporate processes and practices in place, maintaining overall consistency throughout their overall organization? Or do they let a potentially vast assemblage of such acquisitions simply continue to operate as is, and as if separate businesses? How and where do they step in and standardize and how and when should they stand back and leave what might be sources of defining value alone to proceed as is?

If a large acquiring business simply takes this hands-off approach as its one and only, default option what happens to its operational and even its strategic systems as organizing frameworks, and certainly as guiding sources of principle for their overall organization? And can they still be said to even have a single coherent business culture or even a single coherent operational and strategic system under these perhaps extremely stated circumstances?

I have just made some business model assumptions here that I am going to explore in a next series installment, where I will consider tightly and loosely organized businesses and what in their looser forms can become value chain business assemblages – with a blurring of the lines between large and small businesses per se. In anticipation of that, I will consider what might be called clearinghouse corporate models. And I will tie this line of discussion back to the questions of what is offered to a business’ targeted markets and how it markets to them, and with gorilla and viral marketing options definitely included there. 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. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1.

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