Platt Perspective on Business and Technology

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 9

Posted in business and convergent technologies, strategy and planning by Timothy Platt on December 6, 2017

This is my 9th installment to a series in which I reconsider cosmetic and innovative change as they impact upon and even fundamentally shape the product design and development, manufacturing, marketing, distribution and sales cycle, and from both the producer and consumer perspectives (see Ubiquitous Computing and Communications – everywhere all the time 2, postings 342 and loosely following for Parts 1-8.)

One of my core goals for Part 8 was to in effect force a reconsideration of what “business cycle” means, expanding it out to include impact and influence from a wider range of actively involved stakeholders, within the specific business and its marketplace, and as found throughout the supply chains and other larger value chain systems that it of necessity operates in.

• Quite simply, no business operates in a vacuum. Businesses work with and depend upon other businesses, as well as increasingly complex business-to-consumer systems with increasingly complex and important feedback and two-way communications governing all of this.

But up to here, at least in the narrative of this series, I have cited “marketplace” and “consumer” as largely undefined and uncharacterized markers while focusing on the businesses that deal with them and that seek to connect effectively to them. My goal for this next step installment in this narrative progression is to at least begin to open up the black box construct of markets and consumers, in order to more fully understand them and to more fully understand what those businesses need to do regarding them, to endure and as competitively strong enterprises.

I phrase that in perhaps extreme terms, at least in part because I have been focusing on virtuous and vicious cycle decision and action patterns in business strategy and operations in the past few installments to this series, where extremes become relevant. So I approach this topic from the perspective of how strategy and operations can and do have business-effectiveness and even business-viability defining consequences. And with that noted, I turn to consider markets and consumers, and I do so from the fundamentals and with a statement that will bear explanation:

• When businesses operate in interactive networks of the type under consideration here, the distinction between business and consumer, and that between provider and consumer blur and become more matters of perspective and orientation than anything else.

As an obvious starting point for explaining that point, essentially every business in a supply chain system can legitimately be viewed as a customer and a marketplace participant for at least one other business in that interacting system. Often, in fact essentially every business that participates in this type of system, can legitimately be considered a customer, and a loyal repeat customer of several or even many other businesses there. And at least as significantly, when supply chain systems are robust and stable, the businesses participating in them at least ultimately provide value to the businesses that they service and provide for there, by helping them to more effectively and cost-effectively service the needs of their customers and marketplace: other businesses in those same systems included. So these relationships can come to offer success enabling value for all concerned and in a feedback driven and reinforced manner.

With this blurring in mind, let’s at least conceptually parse the concept of market into two basic categorical subtypes:

• A direct market for a business, consists of its own current actively involved customer base, plus whatever larger demographic that they belong to that could realistically be engaged with by that business, into becoming actively engaged customers for it to – when that business follows its current business and marketing plans as already in place.

Obviously, a business can always at least plan for and attempt to change the target market demographic range that it would be able to effectively draw actively involved customers from, and even very significantly so. But for purposes of this discussion at least, that type of shift would require at least a measure of change in its underlying business model insofar as it specifies target markets, and certainly where more than just minor target market adjustments are being considered. So when I write here in terms of a business’ “direct market”, I do so considering it as if viewed from a snapshot-in-time perspective of where it is now and how it functions. And with that perspective in mind, I correspondingly add that:

• An indirect market for a business, in simplest terms consists of the direct market of a second, customer business that that enterprise services in a supply chain or related system as a client business there.

And the positive value that a business offers in that system, can ultimately be seen as a measure of how effectively and fully it offers value to the indirect markets that it is connected to through its supply chain relationships, as it brings value to its supply chain partner/client businesses. And ultimately, businesses create greater levels of value for themselves through really effective business-to-business collaborations than they could through more strictly stand-alone effort. Value creation directed to direct and to indirect markets in this systems are at the very least additive for businesses in them that receive these benefits.

These points of conclusion fall directly out of the presumption that the real sustaining strength of a business is in how competitively effectively it can bring value to its customer base, and in ways that would prompt its members to keep buying from it, providing it with revenue through that transactional activity. Think of this as a brief discussion as to how collaboration can amplify the maximum possible level of such value creation that could be achieved.

The easiest and clearest way to parse these systems is to consider business-to-business dyads – simplest case two-business interaction models. But realistically, impact here spreads out throughout entire supply chain systems. And both direct and indirect markets can and do overlap too. As a simplest case example there, consider delivery businesses that enter into both business-to-business, and direct business-to-consumer transactions, where at least some of their customers might be members of both their own actively involved direct market and the indirect market that they face through one (or more) of their partner businesses.

If this set of distinctions highlights and at least somewhat clarifies how complex business-to-market relationships can become and certainly in more complex systems as found in supply chains, then it serves its purpose. Apparent simplicity can arise from actual underlying simplicity, but it can also arise from lack of attention to the details too and this is a context where that is readily possible; we all tend to take terms like “market” for granted and as if they were somehow axiomatically unexaminable, where detailed examination can be essential.

I am going to turn to in my next installment to this series, to consider the issues of marketing and sales in the types of complex and multi-layered contexts that I have been addressing here. 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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