The Internet may not make corporations obsolete, but the corporations will have to change their business models. Do you agree? Why or why not?
The internet and internet business models have already made some pretty sizable corporations obsolete. Remember Palm, how about Blockbuster Video, Kodak, Garmin, etc…, etc…. General technology advances hurt these companies and forward thinking internet connected business models produced by companies like Apple, Amazon, and Netflix essentially made it impossible for these legacy businesses to compete. The world is a bit different today than it was when these titans virtually evaporated. New internet-based business models, but the Internet goliaths like Amazon are still eating legacy businesses unable to adapt to new Internet led business models, retailers like Borders and Circuit City are just a few of the retailers who have bid farewell at the hands of Amazon. Massive legacy retailers like Walmart are also feeling the pain and trying to make up ground by acquiring companies like Jet.com to help them morph their brick and mortar businesses into efficient E-tailers. The internet has changed the game completely with paths to revenue, marketing, customer service, customer acquisition, and scale strategies all very different than they were for brick and mortar businesses. The biggest challenge corporations have to overcome is selling themselves too hard on their “unique” value proposition without adapting, convincing themselves they can carry on like they always have and survive. In a wired world, people are shopping 24x7x365, and Black Friday has been replaced by Cyber Monday. While Black Friday only lagging behind Cyber Monday by approximately one hundred million dollars in online sales, shoppers spent 12.1% more online in 2016 than they did in 2015 with retail store foot traffic dropping 10.4%. “Corporations” will not be obsolete but the companies we consider cultural icons like Sears and General Motors will continue to be challenged by new entrants like Amazon and Tesla.
I agree 110% that legacy businesses who have been slow to adapt to a connected world will be very challenged to sustain and grow their businesses. Corporations who consider themselves as data-driven organizations need to think about the data driving their companies. Last quarter’s sales figures while important do not depict consumer sentiment, for instance, the sentiment analysis using the #GrabYourWallet hashtag may provide some valuable indicators on how a retailer should adjust their inventory, etc… Many legacy corporations are mining historical structured data as an indicator of the future because they haven’t yet made the shift to what IDC calls the 3rd Platform (http://www.idc.com/prodserv/3rd-platform/), this lag is natural, but every organization needs a 3rd platform strategy because it represents the future.
References
Chronicle, B. E. (n.d.). How ‘Amazon factor’ killed retailers like Borders, Circuit City. Retrieved February 22, 2017, from http://www.sfgate.com/business/article/How-Amazon-factor-killed-retailers-like-6378619.php
Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.
Male, B. (2009, December 11). 21 Things That Became Obsolete This Decade. Retrieved February 22, 2017, from http://www.businessinsider.com/21-things-that-became-obsolete-this-decade-2009-12?op=1%2F#undaries-20
MSG Management Study Guide. (n.d.). Retrieved February 22, 2017, from http://www.managementstudyguide.com/impact-of-internet-revolution-in-business.htm
O’Neill, M. (2011, March 01). How Netflix Bankrupted And Destroyed Blockbuster [INFOGRAPHIC]. Retrieved February 22, 2017, from http://www.businessinsider.com/how-netflix-bankrupted-and-destroyed-blockbuster-infographic-2011-3
Stelter, B. (2013, November 06). Internet Kills the Video Store. Retrieved February 22, 2017, from http://www.nytimes.com/2013/11/07/business/media/internet-kills-the-video-store.html
Taylor, K. (2017, February 01). An anti-Trump movement is calling for the boycott of these 33 retailers. Retrieved February 22, 2017, from http://www.businessinsider.com/trump-boycott-retailers-sell-trump-products-2017-1
Walmart Agrees to Acquire Jet.com, One of the Fastest Growing e-Commerce Companies in the U.S. (n.d.). Retrieved February 22, 2017, from http://news.walmart.com/2016/08/08/walmart-agrees-to-acquire-jetcom-one-of-the-fastest-growing-e-commerce-companies-in-the-us
Should all companies use Facebook and Twitter for customer service and advertising? Why or why not? What kinds of companies are best suited to use these platforms?
This is an interesting and somewhat loaded question. I think the key question that every corporation needs to answer here with regards to should they have a social media presence (Facebook, Twitter, Instagram, etc…), is: will a social media presence positively or negatively impact the business? I am not just talking about should an organization worry about a positive or negative reaction (tweet) from the social community, it’s about more than this. Organizations need to consider if they can accurately represent who they are in the social sphere, do they have the time and inclination to curate content which is representative of their brand? Having NO twitter presence is probably better than a twitter profile with one tweet from two years ago that says “Hello”. From a customer service perspective, it’s hard to imagine that a company would have a social presence and not have a clear understanding of how social media is impacting the organization, I am implying that you can’t decouple specific aspects of social media. Once you have a social media presence IMO you’re in the social media customer service business by default. Of course, a company can attempt to take the censorship approach, but this usually doesn’t go well, and this organization is probably better served steering clear of social media. Corporations who leverage social media today also need to leverage the vast amounts of data which can be mined from social media platforms, this data is not a straightforward as sales figures neatly organized into tables, columns, rows, and fields but it can be incredibly powerful for performing predictive analytics. Many organizations who do this successfully outsource the analytics and machine learning because while social media is important to their business, they don’t possess the internal expertise to execute. Other organizations who consider social media a path to competitive advantage may choose to directly mine this data as they perceive it as core to their business. With 42% of customers who complain expecting an answer in sixty minutes or less you better have a (ro)bot leveraging machine learning algorithms responding to customers because a human response is probably not realistic given the scale of twitter.
I do believe that most companies need to explore social media for customer service and advertising. Social media can be a great way to drive customer intimacy (Laudon & Laudon 2015 p 361) but it can also be an excellent way to alienate customers. Social media is an incredible platform, but companies should clearly understand their audience, they should have a clear vision of how they want to present their brand. By engaging in a social media initiative, organizations need to understand that they are making a commitment because engagement followed by abandonment can be harmful.
References
Baer, J. (n.d.). 42 Percent of Consumers Complaining in Social Media Expect 60 Minute Response Time. Retrieved February 22, 2017, from http://www.convinceandconvert.com/social-media-research/42-percent-of-consumers-complaining-in-social-media-expect-60-minute-response-time/
Gunelius, S. (n.d.). 10 Laws of Social Media Marketing. Retrieved February 22, 2017, from https://www.entrepreneur.com/article/218160
Laudon, K. C., & Laudon, J. P. (2016). Management information systems: managing the digital firm. Boston: Pearson.
Newton, C. (2016, November 01). Twitter introduces customer service bots in direct messages. Retrieved February 22, 2017, from http://www.theverge.com/2016/11/1/13488472/twitter-dm-welcome-messages-quick-replies-customer-service
Pangan, A. (2014, October 23). Social Media Analytics: Is It Worth Outsourcing? Retrieved February 22, 2017, from http://www.infinitdatum.com/blog/social-media-analytics-is-it-worth-outsourcing/
Parrish, C. (2015, July 08). How To Use Social Media To Market Your Business. Retrieved February 22, 2017, from https://www.fastcompany.com/3047232/ask-the-experts/how-to-use-social-media-to-market-your-business
Using Social Media Analysis for a Competitive Advantage. (2015, January 06). Retrieved February 22, 2017, from http://www.fathomdelivers.com/blog/social-media/using-social-media-analysis-competitive-advantage/