Strategic Thinking

Chapter VI - Think Mobile

2011-03-01T16:22:00.004-05:00

Despite the huge adoption of smart phones in US, a huge percentage of business are not aware of the mobile commerce. According to Google 79% of companies are not prepared for this new boundary in world of the electronic commerce. Mobile is changing everything. Since its always plugged to the Web the device is merging what we use to call digital activity with the real activities. Browsing used to be an online activity we do at home or with our laptops but now, with mobile, its becoming something we do on-the-go and this is a new challenge for companies.

The classic funnel process through purchasing is changing radically. With consumers using mobile to research products, compare prices and interacting with other users along the way, consumers are becoming smart and this is transferring a huge bargain power to the client and once more changing the rivalry forces. Competition must now be aware on how to deal with this empowered consumer.

Recent data published by Google points out that:

39% use the Internet on their smartphones while going to the bathroom
70% have used their smartphones while shopping in-store
88% of people looking for local information have taken action within a day
82% of smartphone users notice mobile ads

Although the future is still open. Till now mobile is been used as a laptop extension with all the browsing and network capacity. So in the end of the funnel process the transaction is made with a credit card information or through a payment system such as PayPal. But the mobile industry is changing very fast and with the introduction of the mobile payment technology, the reality of electronic transactions will be augmented to a new level.

Chapter X - ELECTRONIC COMMERCE SECURITY * Smart Shoppers attracts Smart Cyber Criminals

2011-02-22T12:32:00.005-05:00

Users have always been the weakest point in terms of cyber security threats. System and network administrators are constantly updating and maintaining their computers network with the latest technology to prevent and contain a variety of security risks but the headache is always users behavior. Weak passwords, careless browsing, indiscipline towards security policies are some of the flaws committed by users which could open back doors of the systems and compromise corporate data, assets and in the worst scenario, represents huge financial losses to companies.

With the rising trend of smartphone adoption the risk is now been transferred to users pockets. Smart shoppers are using their devices through all the transaction funnel. The possibility to buy goods or services and make financial transaction such as, money transfer through the Smartphone devices is available now to half of the Americans. The growing popularity is attracting criminals and antivirus firms are reporting for 2010 the rise of 46% of security threats to mobile devices.

Virus, trojan horses and other malicious codes usually build to target PCs are now directed to mobile devices. Hidden between applications and games these threats take advantage of connectivity and computing power of the devices to trigger every kind of criminal actions such as destroy data, spying user, steal personal information, make calls, send messages or even take control of the device and use it remotely to attack servers.

Sloopy codes of the applications are other entry sources for malware attacks. In 2009 Citigroup launched a mobile banking application for iPhone which was not properly sealed and could have let criminals access to the banking information for 118,000 clients who downloaded the application. Fortunately the flaw was discover before any attack and clients didn't lost money or information. These kind of threat highlights the risk that is around and how desirable the mobile platform is becoming for cyber-criminals.

Symbiam OS is the most affect by these threats but Android is becoming highly targeted. With a huge base of applications, specialists are saying that 2% of the apps are able to send messages without user's knowledge, while 5% can dial without permission, and since Android OS is an open platform the vulnerability is very high. Contrasting, till now the iOS from Apple is the most secure. Applications in the Apple Store are submitted to a verification process to guaranty that they are secure before going online.

However, since most user don't even think about security on smartphones, vendors are all working on to make the mobile OS more secure, locking down possible entry's and creating centralize feature to neutralize menaces.

Online Sources:
King5Technology
MobileMedia
VentureBeat
Articles:
- Bloomberg Business Week - Smartphones Apps Go (Trully) Viral
- SC Magazine - Smart Target

Chapter VIII - Moving from the old to the new Internet Protocol

2011-02-20T16:59:00.009-05:00

ICANN's ceromony to allocate the last five blocks of IPv4 address - February 3rd, 2011. Miami

35 years ago, Mr. Vint Cerf and scientists colleagues decided that a pool of 4,3 billion network address spaces would be enough to allocate an experiment of connecting computers in an advanced data network. At that time nobody could predict what now became the Internet with 2 billion users around the globe and all its transversal impacts in the modern society.

On February 3rd, 2010, the network naming system protocol (IPv4) - which is the unique sequence of number assigned to each website, computer or device connected to the Internet - was considered completed depleted by ICANN when the last five blocks were allocated to the 5 registries region in the globe.

Now the world is shifting to the new Internet Protocol (IPv6) which represents a huge expansion of the pool of addresses and creates a new base for Internet growth. Fortunately, this was predicted and since late 90s, when the IPv6 was approved, organizations all over the world are preparing for the change.

For many sources, this situation reminds the Millennium bug when computers and software needed to be updated so they could recognize the year 2000 and beyond. But the Internet Protocol migration seems far more complex because the two protocol families are largely incompatible, and as long the the process will be shifting gradually, the Internet will be working in a dual slack. So there is no end date for the migration and during this, users could experience shutdown on their Internet networks.

Concerns about this issues is being addressed everywhere by Internet authorities, governments, regulators, corporations and network specialists. For users, the shift should be smooth and be something like "changing gears" in the words of the father of the Internet. Meanwhile, as long the IPv6 is prepared to connect a board range of the devices to the Internet, users could need held to setup their devices, routers, systems and applications.

Globally countries are also running to adopt the new protocol. In Cape Verde, the regulator for Internet and Telecommunication has been organizing workshops and activities to prepare for the migration. For this country, which has only 9 IP address ranges, IPv6 represents a big gate to expand Internet infrastructure, mobile connectivity and services based on such as e-commerce, e-learning, and consolidate the e-government initiative.

Hopefully IPv6 will represent a real development opportunity for a country like Cape Verde who will have real chances to expand the Cyber Islands project and become a hub of services in the mid-Atlantic Ocean.

Sources:
ICANN - Nonprofit corporation that coordinates the Internet Naming System
ANAC - Cape Verde's Regulator for Internet and Telecommunication
Q&A about IPv6
IPv6 and developing countries
Drumming up more Addresses on the Internet
Avoiding the pitfalls when transitioning to IPv6
Going IPv6 isn't going to be easy

Chapter 2 - Technology Infrastructure: The Internet and the World Wide Web

2011-02-03T02:52:00.011-05:00

"In 40 years, the Internet has grown to become one of the most amazing technological and social accomplishments of the last millennium." Schneider Gary, Chapter 2

Despite being a recent phenomenon the Internet and IT infrastructure has become a central piece in modern society and a huge tool to accelerate progress in developing countries. New emerging opportunities could help small and poor economies in the identification of new development strategies to overcome chronic problems such as lack of natural resources, geographical isolation, population dispersion and other structural conditions.

Presently this is the Cape Verde situation. The country was recently promoted by the UN from the least developing countries group to the medium income group which rewards the efforts made in the last decade and improvements in the Human Development Index. On the other hand Cape Verde is still vulnerable with a highly dependable economy.

In this scenario ICT reveals to be strategic for the Capeverdean development. In that direction, authorities are implementing cutting edge initiatives to overcome the country's current issues. The e-government program is impacting lives and promoting the rise of the information society connecting capeverdeans across the world (diaspora) with their fellow citizens in the islands. The online service "House of the Citizen" (Casa do Cidadão) is a one-stop shop where various services of the administration are available allowing effective access to the public information, delivering efficient services with increasing levels of accountability.

Meanwhile, Cape Verde has to develop the ICT sector to sustain the present achievement. In regards to the ICT development, I.T.U. - International Telecommunication Union reports that in 2010 the country was ranked in the 102 position which reflects the higher telecommunications cost. In 2009 the Internet Broadband cost was representing 19,65% of the medium income.

In my point of view, despite the government's performance the country is not yet prepared to compete in the global market. My experience as a player in the market allows me to point out three major constrains that should be evaluated and measured through research:

IT enterprises have a limited market due to major role that government corporation plays in the value chain
The National IT infrastructure was privatized for 50 years in the late 1990s to a foreign company. The present government could only minimize the impact by reducing the award to 25 years. But the company has made investments in the IT infrastructure covering all the islands with a communication network (fixed lines, broadband and wi-fi). Still the company operates with focus on financial rewards and maintains a higher access cost for consumers and companies.
A lack of an innovational environment delays the evolution of critical brain mass. IT entrepreneurs don't have access to seed capital, copyright laws are not effective and national policy is focused on the public sector.

However, countries compete with each other and those who are in a better shape to foster their own wealth and take advantage of their own set of infrastructure, with broadband connection and readiness to innovate, will be better positioned in the future.

In defiance of all major questions, ICT represents a window of opportunity for Cape Verde which should be able to consolidate present achievements and effectively lead innovation in Africa.

Source:
Schneider Gary, 2011. Electronic Commerce 9th Edition. Course Technology, Cengage Learning
International Telecomunication Union
International Human Indicators

Google's Trojan Horse come out in beta version

2010-12-16T02:29:00.006-05:00

After my last post I became very excited with the possibilities that could emerge when Chrome OS enters the market. In my point of view Google's focus on the end user experience is absolutely correct. Like me, regular users don't understand what is behind technology and for most of them, computer are stressful, time consuming and a complex tool to handle. Viruses problems, system maintenance and backup data are only a few problems that users have to deal with in daily basis. It's also true that users spend most of their time online. Vast majority still depends on the desktop application which we are all familiar with but using only simple resources such as browsing, processing text, calculating, analyzing data or preparing presentations. Furthermore, the personal computer is also a multimedia device with multiple applications for video, music or photo viewer.

Last year, when project was presented, Mr. Sundar Pichar defended the idea of a web-centric OS computer device which was conceived to facilitate and largely improve user experience. This idea captivate me and I realized that in true computers are not made for end users. Systems based on Windows, Macintosh or Linux are all made for specialist. End users need to be guided or controlled when using those systems so they don't cause damages. We must all face that until now computers are only made for geeks!

That's why I couldn't wait to see this product on the market but I confess that I'm a little disappointed. I was waiting for a "grow-up" computer and yet seems CR-48 is still a baby.

Strategically Chrome OS device launched by Google is a pilot version that shall be improved by end user's experience. The test notebook has 12.1 inch screens, full-sized keyboards and touch pads, integrated 3G from Verizon, eight hours of battery life and eight days of standby time. For now is only available for a select crowd of web heavy users.

Surprisingly, Google launched, in the same day, Chrome Apps Store which is definitely a pool of complementary goods that will enable everything the company is doing through Chrome. In fact, I now understand why Chrome is really Chrome OS.

Suddenly the "all strategy" became evident. Google needs, not only a modern browser capable to surf the web and efficiently use web applications, but also a device who cares about user's experience. Furthermore, Google is setting up a stage and creating conditions for a total migration from desktop to the cloud environment where Chrome OS have a fundamental role as the enabler of the "all ecosystem" that is growing around web application and Google Solutions.

The Apps Store points to that future. Displaying a wide range of applications that users could buy or freely install on the Chrome browser, Google is preparing to fulfil every kind of user's needs and this is changing the game in the industry.

Anyway CR-48 is still a baby and the industry players have all the time to react. The question is if they are agile enough or will they play like past giants in the past that paid no attention until the Trojan Horse became completely deployed.

Sources:
Chrome Blog
Chrome Web Store

Chrome is Chrome OS

2010-12-01T05:02:00.016-05:00

Last year Google was presenting Chrome OS when someone from the press asked about the possibility of using other browsers inside the Chrome OS system!? Seems the questions did not make sense for Google Vice-President of Product Management and he answered that the system will be open for anyone who wants to develop his own browser. Later the project’s Engineer made a joke saying that "Chrome is Chrome OS".

In fact it is a bit confusing since Google owns a browser with that same name and now they are developing Chrome Operational System which will be running primarily in a Netbook designed by Google. According to Google the project should be launched after the thanksgiving holiday, but now analysts are saying that the device will be presented in the next few weeks.

During the project presentation, Mr. Sergei Brin and his top Project Management team points out that computer devices are now very cheap but difficult to manage for most users. Chrome OS will be very familiar and intuitive for most users because the interface will be the browser. Every application will be a web-based, users will not have to install or update software, there will be nothing to maintain and all the data will be on the cloud. Using Chrome OS the user will not have to deal with common problems such as virus, system configuration, software install, updating and backup data.

Still, analysts question about what will be the relation between Google Chrome OS and Android OS, which is another breakthrough project developed by a different team inside Google. Different heavyweight teams’ structures with concurrent goals inside the company could be harmful for coexistence. But for now it seems they coexist pacifically and in the words of Google’s CEO: “So far the model seems to be the Android solution, which is particularly optimized for things that involve touch in some form, and Chrome OS appears to be for keyboard-based solutions.”

Chrome OS seems an evolution rather than a revolution, but since it's based on the cloud computing concept it could be highly disruptive to many business models. This subtle movement could lead more people from the desktop territory, where Microsoft is the Emperor to the cloud computing environment where Google is the most efficient and innovative player.

Let us meet the beta demo presented last year:

Sources:
NYTimes - For Google, the Browser Does it All. November 24, 2010
DaylyFinance - Google Chrome OS Comming to Netbooks Soon - November 27, 2010

"Hub and Spoke" Business Formation

2010-11-10T15:17:00.007-05:00

Organizational Hierarchy [a.k.a. Hub & Spoke Network]

Free idea generation, flexibility, experimentation and speed to test and implement new solutions demand less formalization and low standard of organization levels which is only possible in an open cultural environment. Traditionally big corporation tend to be driven through efficiency and control over the operations and decision flows in a top-down scheme with no crack open for new ideas.

However, in recent years with the emergence of information technology, businesses are now driven to a wide cultural shift and new forms of organization are arising. Lead by the technology giants with worldwide operations through the web, where competition is strongly related to innovation and creativity, the big companies must found new ways to run decentralize operations.

Inspired in the IT architecture, "Hub and Spoke" Business model permit companies maintains the strategic control in the center and at same time give some flexibility to the units. The central Business (hub) spread the operations through a network of business units (spoke) which have own resources to innovate locally.

Some authors present a few drawbacks of this model considering that it steel centralized and dependent from the center. Although, this approach is highly flexible and depending from the organization culture it could be more malleable if the spokes could communicate with each other directly and not through the central hub.

With the emergence of the social business some strategist are predicting that companies will be driven to new holistic form of organization which is refereed as Multiple Hub & Spoke or "Dandelion" where each business unit have great flexibility and autonomy to focus operations on the needs of the community.

How to put the strategy in action?

2010-10-27T16:28:00.003-04:00

Defining an overall strategy for a company is usually a conceptual activity developed by business owners. Meanwhile, after clearly defining what the strategy is, the big question arises:

How to successfully implement, measure and communicate strategy through the company?

More than just having a strategy, companies must be able to implement and measure performance. Kaplan and Norton developed a holistic management system called BALANCED SCORECARD which is based on four major perspectives:

Finance
Clients
Internal process
Learning and growth

Since traditionally strategy is measured through past results and intangible assets are not reflected directly in the financial reports, balanced scorecard is a powerful tool to help managers translate strategy in to performance indicators that reflect operations activities in to a dashboard of results. However, it is not an easy process to translate strategy and design the balanced scorecard. The video shows the fundamentals, but in practice business must be well planned and organized so that the potential of the tools can be exploited.

First Mover

2010-10-06T13:24:00.000-04:00

first move

In the ages of discovery, 15th century, Portugal builds a vast commercial empire. Reaching the Indian coast by sea and discovering Brazil, Portuguese establish a strong platform of commerce supplying Europe with every kind of expensive and rare goods. Two centuries later, Spanish, Dutch, English and French were dominating the world commerce and the Portuguese empire diminished to a few colonies in Africa, Asia and Brazil.

In the modern business world we have the same strategic issues. Pioneers of the market have open road to occupy the spaces, the resources and establish strong advantages over following competitors. But if the first mover is not able to capitalize on its advantages it leaves space to the early and later followers.

First mover can capitalize advantages over:

Brand Loyalty and Technological Leadership
Preemption of Scarce Assets
Exploiting Buyer Switching Cost
Reaping Increasing Returns Advantages

Although depending on the market forces none of these mechanisms could be sufficient to sustain strong leadership over second and late movers. However if the first-mover advantage is based on R&D and the firm is innovative enough to assimilate market changes and customer requirements, the leadership can be maintain through sustainable cost, higher margins and brand loyalty. Example: INTEL Microprocessor over AMD and CYRIX.

In the other hand, being first in the market could be fallacious. The first mover assumes the risk of "breaking new ground", uncertainty, higher costs and usually must develop new suppliers and distribution channels. Later mover's are in a best position to understand customer's needs, learn and assimilate first mover's investment avoiding mistakes and exploiting incumbent inertia, adopt technology, introduce new production system and become more efficient.

Yet an optimal timing of entry is a strategic movement that depends of many complex factors related to market i.e. customers preferences, technology performance and cycle, enabling technologies, complementarity goods, industry characteristics, firm capacities and resources etc.

One good example about a late entrant that took strategic advantage from first and second mover was the introduction of the iPhone by Apple. With fast cycles of development and after launching successful products such as iPod and iTunes, which intensify a remarkable consumer experience, Apple enters in the smartphone industry with a refined product that changes the competition forces. Selling more than 1 million units in the first 74 days evidences the success of the strategy.

sources:
Wikipedia
Strategic Management of Technological Innovation, third edition. 2001

Battles for standard dominance in the desktop

2010-09-29T01:42:00.000-04:00

Microsoft Word is one of the most popular software for word processing. Launched in 1989 as a Windows application it holds today about 95% of the market share and Microsoft estimate that there are 500.000.000 copies in use. Early competitors lost their position during Windows ascension. The operating system open the way for Microsoft Office applications which gain competitive advantage over any other player and defined a dominant standard.

Microsoft word market-share battle between 1986 - 1997

1. Despite Microsoft behavior the leading position create a monopoly with positive consumption externalities for word processor market due to the large number of users that are now familiar with the dominant design. Initially based on the graphic concept of what-you-see-is-what-you-get, the user interface for word processor achieved a high level of maturity and the basic layout adopted widely.

OpenOffice Writer layout

2. Although the market is changing: New Office office suite, stand-alone application, open sources solutions and web base apps are others alternatives to Microsoft word processor. Users have a wide range of solutions and they can choose which suits best to their needs. Compare them here.

3. Still the battle for dominance enter in a new field: File format. After the International Organization for Standardization approved the Open Document Forma t (that was designed to permit files compatibility between different applications), Microsoft introduce its own file format (docx). Although this is also an XML based format which means that is open and licensed free. OpenOffice and some web based application such as Google docs adopted the Odf file format.

4. Microsoft Word is very competitive with a strong position in the market. Although market forces are changing and new trends are emerging. For example:

Consumers are becoming more independent from installed application since they are doing everything online: creating, sharing and storing their files online;
Online application are reliable, available and easily convertible to any format (pdf, xml, doc, etc);
And definitely with word processor one size does not fit all. From the school student to the most diverse professional, business and government institutions there are a lot of needs to be fulfilled.

After all the monopoly cost seems the consumers are going to be the winners once "dust settle".

Articles source:
http://www.utdallas.edu/~liebowit/book/wordprocessor/word.html
http://www.businessweek.com/magazine/content/06_27/b3991412.htm
http://lowendmac.com/musings/08mm/rise-of-microsoft-monopoly.html

Google Core Business and Internet Innovation

2010-09-22T12:55:00.000-04:00

google first webpage - 1998

Before 1999, the Internet was dominated by companies such as AOL and Yahoo who develop their business models as a one-point-stop where registered users could have access to a whole set of things including, e-mail, services, news and other features. Advertising and search was also part of the scheme.

Afterwards, Google emerged with a revolutionary web business concept based on search. The innovative idea that query search results must quickly deliver the most relevant answer to the user efficiently (measured in how fast they send people on their way), changed everything and opened a new path for innovation. Since then, and based on search, Google introduced a whole set of innovative web services and expand the technological platform widely.

"Google runs over one million servers in data centers around the world,^[13] and processes over one billion search requests^[14] and twenty petabytes of user-generated data every day.^[15]^[16]^[17] Google's rapid growth since its incorporation has triggered a chain of products, acquisitions and partnerships beyond the company's core search engine." source: wikipedia

Google grew so fast that they became Internet leaders in a few years. Their technology impacts everything, everywhere, and for many businesses Google and all the web innovation that followed became disruptive to the traditional business model: news companies, publishers, copyright society, content providers, advertisers, regulatory agency and even governments (china) started complaining about Google. Fundamentally, because of the nature of the technology developed, they were dealing with multiple issues and negotiating with many counterparts.

However, Google developed a very strong competitive position with 85% of the search market share, reported by Netmarketshare in August 2010.

In the meantime a new web player quickly arose with a new core business concept: Social Networking. Born in 2004, Facebook crossed 500 million users this year and is competing with Google for leadership as the most popular website.

Apparently these two web giant companies have different core business strategies but it seems that the Social Networking concept is so strong that it is impacting Google's Strategy. Google's attempts to build a social network failed with Orkut, Friend Connect, Google Wave and Buzz.

But recently, Mr. Schmidt (CEO) told reporters that "Google Inc plans to gradually introduce social-networking features starting this fall. Expect to see social tools from Google, but do not expect a brand new social network. Instead, Google will add social components to its core products."

With the debut in the search engine market, Google grew and entered in many business sectors such as communication, advertising, mobile, and now they intend to compete in the social networking arena. Despite the need to keep innovating, I wonder if this strategy is correct.

link Sources:
http://en.wikipedia.org/wiki/Google
http://mostpopularwebsites.net/
http://www.reuters.com/article/idUSTRE68D5FK20100914
http://www.internetworldstats.com/emarketing.htm
New York Times Article

Boston lead the world as the 1st innovation city

2010-09-15T12:11:00.000-04:00

Boston - Massachusetts

In the global competitive economy cities plays a central role, fostering innovation when they are able to cultivate a fertile environment for creativity, business startups and high levels of city infrastructure.
A recent study from 2thinknow ranked Boston as the Top City of global innovation leading a list of 289 cities around the world. The score measured 3 factors (out of 10) in a range of 162 innovation indicators:

Cultural Assets - 9
Human infrastructure - 10
Networked markets - 10

Leading with 29 points out of 30, the City of Boston is a central hub where individuals, firms, nonprofit organization and even governments can have benefits from the collaborative network that already exists or that can be built in the region such as technology clusters and spillovers of knowledge.

However Melissa Schilling* points out that geographical clustering could have some downsizing effects for installed companies because their proximity and competition can reduce pricing power with buyers and suppliers, competitors can gain access to proprietary knowledge and the huge concentration can lead to other externalities such as high cost, pollution, traffic, etc.

Yet, this is a great reward!

Sources:
*Author of Strategic Management of Technological Innovation, third edition. 2001
2thinknow
smartplanet article
Photowallpaper