When Microsoft launched its first public Web domain in 1994, few companies, let alone consumers, knew anything about the World Wide Web. The retail industry, due to the concept of e-commerce, jumped on the Web more rapidly than the corporate world. Now, however, most corporations have clearly recognized that their previous business model is outdated in terms of the viral world and changed their Web sites and Internet marketing strategies accordingly. As Gerry Brown (2009) of Blor Research states: “The Website for most of us today is the visual online external representation of a company.” When customers meet a CEO, they immediately comment on that organization’s Website. Thus, savvy corporate leaders not only want Web presence, but consistently attractive and relevant sites that offer personalized attention to optimize customer sales conversions, return visits, and loyalty. In short: To compete successfully against other Web enterprises in terms of products/services and, even more importantly, in terms of branding, corporations need to ensure that they adopt a customer-centric business model—whether they are B2B or B2C enterprises. Presently, this customer centrism entails leveraging the latest forms of social communication, such as blogs, social networking and mobile communication, another technical revolution in the making.
Business Model Definition
A business model is a functional plan that creates economic value for a business. It distinctly spells out how an organization can position itself in the value chain to sustain itself and generate revenue (Shafer, Smith, and Linder, 2005). Business models look at a number of different areas, such as innovation, finance and economics, entrepreneurship, operations, and marketing, to decide how a company will best define itself within the parameters of its industry’s marketplace. When the WWW became a reality, e-commerce ventures quickly recognized that exceptional customer service was required to attain higher profitability. The corporate world was much slower in realizing this. Many older companies had already forgotten that their
customers/clients were what had made them successful. Over the years, these organizations became more concerned with cutting costs on the bottom line and increasing revenues—frequently at the consumer’s expense—than with satisfying their customers’ needs.
Custom-Centric Web Sites: Dell Case Study
As billionaire Akira Mori says, “We must continually reinvent ourselves,” and respond to changes with creative new business models. Thus, most corporate CEOs are now mandating that their Web sites be customer-centered. They realize that opportunities online are limitless, but such results necessitate providing a site that customers will rate highly for convenience, efficiency, informative content, technological performance, trustworthiness and general satisfaction in meeting their particular needs (van Duyne, Landay, and Hong, 2007). In his book Direct to Dell (2005), for example, CEO Mike Dell discusses his company’s business model, which is based on direct selling but not with resellers or a retail channel. It adheres to three golden rules: disdain inventory, always listen to the customer, and never sell indirect. Dell targets both potential and present customers who know what they want and how the company can improve to better meet their needs. Dell also places an emphasis on segmentation, asking “how can I target the people who most want our product, so that I’m spending my resources where I know it’s going to pay off best?”
The New Business Model—Mobile Technology
From its first days, the Internet has been in the mode of constant change. Successful online companies also know that they cannot rely on the status quo for any period of time. Mori’s concept of “reinvention” is a norm. Thus, these Web sites know that being customer-centric is a constantly changing target. Over the past couple of years, for example, blogs became all important to establish ties with online visitors. Most recently, social networking with such sites as Twitter, FaceBook and LinkedIn, have become critical aspects of an online business model. Now another major revolution is evolving that promises to be bigger and even more lucrative than the Internet—mobile technology.
As a Morgan Stanley report (Meeker, 2009) concluded: “The Mobile Internet Cycle…is just starting. Winners in each cycle often create more market capitalization than in the last. New winners emerge, some incumbents survive – or thrive – while many past winners falter. Mobile technology offers a host of new services that can provide companies with opportunities to accelerate better business outcomes and a competitive advantage. Companies will need to determine which are best for their continued success.
Corporations are just beginning to understand the importance and impact of the mobile enterprise and its many applications. The latest mobile information and communication technology has the potential of providing organizations with the ability to attain significant gains in performance measurements, such as productivity and efficiency (Gebauer and Shaw, 2004). Many companies in a variety of industries are already successfully using mobile applications. For example, mobile technology provides a much more efficient method for social networking. Companies can have a greatly enhanced level of connectivity with their employees, customers and competitors. Mobile technology extends Internet communication, computing and consumer services to the wireless medium, which offers consumers greater ease of use in their personal life and at work (Jarvenpaa et al., 2003). Users can easily download applications with business news updates and product introductions, and the information is immediately accessible anytime and anyplace (Barnes, 2003). Because users are relying on organizations to supply this information, companies that use mobile technology have the ability to support activities throughout its value chain and enhance their competitive advantage. With the ability of two-way communication, business organizations can then get instantaneous feedback from customers regarding the information it supplies.
In the last decade, mobile technology has dramatically grown in size and capability (Atkins et al, 2006). The media content bandwidth increased from 1 to 3 gigabytes of data transmission combined with a number of different accessories, such as cameras, mp3 players and Web browsing. With the increase of thousands of apps, users have the ability of activities from gaming to business strategizing. PDAs have evolved from organizational tools to a combined global system for mobile communication/general packet radio service (GSM/GPR) that incorporates cellular coverage and allows for making phone calls, sending text messages and e-mails and accessing the Web.
The speed, ease and accessibility of communication allows companies with much faster and accurate market research and R&D to stay ahead of the competition and meet consumer needs by introducing product upgrades more quickly. Branding is enhanced, because consumers are more directly involved in the company’s decision making. This branding is one element of a larger marketing effort that is possible through the mobile technology. On PDA and cellular phone applications, present and potential customers can readily view ads and catalogues and be notified of any sales or other business information of interest. Marketing and advertising can be customized to target a specific geographical or niche audience (Barnes, 2003).
Mobile Technology Case Studies
An example of mobile enhancement is found in the development of location-based applications, which take advantage of the geographical data provided by GPS information systems. Logistics and transportation providers such as United Parcel Service and Federal Express use GPS applications to give workers information on avoiding traffic-congested areas, taking other routes, and finding the next location. These mobile enhancements are also incorporated into customer relationship strategies. The drivers and sales team not only have direct access to relevant information on the road and in their offices, they can also update relevant corporate data on inventory and pricing, plan personal schedules, and provide clients with more accurate and relevant information (Atkins et al, 2006). Atkins also explains how a restaurant owner is improving production and quality of service through these wireless mobile devices. The waiters can use a PDA with a Bluetooth or Wi-Fi to take orders, which saves them time from running back and forth to the kitchen for food preparations. The orders are displayed on an electronic board in the kitchen, which allows for personalized customer orders such as adding extra seasoning or eliminating sauces. When a recurrent customer comes in to eat, the wait staff can quickly bring up his/her individual needs on the PDA and make meal suggestions. In addition, to gain a competitive advantage, the electronic board is connected to a Web-enabled database that calculates stock usage of ingredients for automated ordering. The system controls the amount of wasted ingredients and keeps stocks within expiry dates.
As the mobile technology expands in the type and ability of services, corporations will increasingly find new ways for leveraging it. Pousttchi, Key and Wiedemann (2006) examined 30 case studies to identify objectives of mobile marketing campaigns. The authors found that mobile efforts are being used for 1) building brand awareness that focuses on the customers’ ability to recognize and recall a brand in purchase and consumption and that can be used for the launching of new products and services; 2) changing the perception of brand image; 3) enhancing sales promotions that stimulate faster or more extensive purchase of a product/service; 4) growing brand loyalty that aims to increase the consumers’ commitment to repurchase; 5) and building a customer database through surveys with the goal of collecting customer profiles of preferences and activity habits.
Conclusion
.As with any new technology, be it the transformation from hot to cold type in the printing presses, the introduction of the Internet and the WWW, the rise of social networking or the mobile enterprise, corporates are continually faced with an increasing number of different bells and whistles that they can use for their company strategy and marketing efforts for building a successful business model. They need to closely study their options to determine the options that best fit with overall goals and objectives for meeting their customers’ needs.
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