SMM  Strategic Marketing Montreal

[Newsletter #16]

Another Thing Jack Welch Got Wrong

What Jack Welch got wrong

Jack Welch did many memorable things during his time with GE. He is said to have made GE an Internet-based company. However some experts suggest that he did not see the real potential of the Internet and how it could be used.

Cambridge Technology Partners (CTP at http://www.ctp.com) are specialists in E-commerce and became part of Novell late in 2001. In their White Paper "Bargaining Power" they said that "when super-CEO Jack Welch described General Electric’s new Internet exchange business, he trumpeted the company’s increased leverage over its suppliers. He missed the point." CTP went on to say that the Internet creates a network. Being a network leader gives much greater advantage than using the Internet merely as an aid to bilateral trade between a supplier and a purchasing agent.

How Canadian Business is handling E-commerce

The Statistics Canada Daily of April 2nd, 2002 is on Electronic commerce and technology. It suggests that many business heads in Canada are also not exploiting the full potential of the Internet. There are a number of surprises here. In general, most values have grown appreciably in 2001 versus 2000. Information is provided for all industrial sectors, and some of the results for 2001 are reproduced below..

So it would seem that although the vast majority of businesses are now using the Internet, the proportion selling via the Internet is low. In some sectors, this is not surprising since the proportion with websites is also low.

How to do better

If the Internet isn't performing for you, then you may want to look carefully at how you should be using it. Unfortunately, many people have only a partial view of the Internet. For example, a new Industry Canada site that appeared at the end of March, ebiz.enable (http://strategis.ic.gc.ca/SSG/ee00247e.html), says the following:

"The Internet is one of the many tools that can be applied to marketing. Properly understood, it can be harnessed to complement existing marketing practices, extend operations and create new opportunities. The key to successful marketing over the Internet is applying the strengths of the medium to proven traditional marketing practices in innovative ways."

There are some useful notions on the ebiz.enable site. However this is a partial view of the Internet just as Jack Welch had.

Internet capabilities are evolving rapidly and continually. Just look at two reports, which appeared within the last week.. On April 8th, MSI - Manufacturing Systems Information - had an article on the issues, which CTP said Jack Welch overlooked. Their conclusion was "Web services—panacea of the moment—not yet for B2B". However, as the article noted:

"Web services are a hot topic because Microsoft, IBM, and Sun Microsystems, among others, are scrambling to supply businesses with these services, which will allow computers to share data across the Internet, and when so programmed, handle all kinds of tasks without human intervention."

The previous day, the BBC announced that "Websites watch and learn". The article describes the technology to track the movements of a website visitor to best identify exactly what is looked at and how the purchase decision is made.

The Statistics Canada table in this paper shows that the vast majority of businesses are now using the Internet. It cannot be ignored. But the systems involved can be very costly. And they are not always very effective. So how do you determine the best approach for your company?

Strategy then Actions

The wise words of Michael Porter in Newsletter #7 still represent the best starting point.

Strategy is not the same as operational effectiveness. Strategy is making choices, trade-offs; it's deliberately choosing to be different. On the other hand, operational effectiveness is a no-brainer. It's what's good for everybody and what every business should be doing.

Investments in technology can give you improved operational effectiveness. Porter said this was a secondary topic, only to be tackled after you have determined your strategy. Your strategy defines your competitive advantage.

The choice of strategy must examine questions such as the following:

Who are your target customers?
What are their needs, that you can supply better than anyone else?
How do these customers operate in this Internet age?
How can you establish meaningful communication with potential customers?
How can you provide products and services to these customers, which keep them coming back for more?

If you would like help in developing your Internet strategy or in confirming that it is still on-target, SMM will be happy to assist you. Our help can be configured to meet exactly the needs you have. Our strengths, experience, creativity and practical common sense can complement those of your company. So write us a Fast Message today, , on what you're looking for.

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