Post on 12-Feb-2016
description
transcript
The Second Curve: Managing the Velocity of Change
Ian Morrison
Slide 2
The Second Curve
First Curve Second Curve
Slide 3
The Curves
First Curve– The established way of doing business– Most of the current Profit and Revenue– Slowing in the long run
Second Curve– New business or new way of doing business– Radically different from the first– Source of future growth
Slide 4
Drivers of the Second Curve
New Technologies– Faster, better, cheaper
New Consumers– Anything, any time, any place
New Emerging Geographic markets– Asia, Latin America, Eastern Europe
Slide 5
New Consumers
Better educated Discriminating Skeptical and demanding Better informed Individualistic With changing values
Slide 6
Public’s Satisfaction with Industry Decreases: Managed Care Loses More Ground than Others
Industries Doing Good Job Serving Consumers
1997 1998 1999 2000Change
1997-2000% % % % %
Computer hardware companies 80 78 80 76 -4Computer software companies 80 77 80 78 -2Banks 75 72 68 73 -2Hospitals 77 73 71 72 -5Car manufacturers 70 69 70 67 -3Airlines N/A 78 71 66 N/ATelephone companies 80 76 67 64 -17Life insurance companies 64 63 61 62 -2Pharmaceutical and drug companies 79 73 66 59 -20Oil companies 59 64 55 39 -20Health insurance companies 55 48 41 39 -16Managed care companies 51 45 34 29 -22Tobacco companies 34 32 31 28 -6
Slide 7
Births (millions)
0
1
2
3
4
5
The Greatest Generation
The Forgotten Few
The Baby Boom
The Baby Bust
The Echo Boom
The Echo Bust
Slide 8
California Demographics: Everyone’s a Minority
0%
20%
40%
60%
80%
100%
1995 2000 2010 2020
Native Americans
Blacks (Non-Hispanic)Asian/PacificIslandersHispanics
Whites (Non-Hispanic)
Slide 9
New Technology
Computers Communications Internet
Slide 10
America’s Technology Boom 1997-2000
Demographics of the Baby Boom The 401 (K)ing of America The NASDAQ Wealthy: betting with the
house’s money Day trading by individuals and institutions The Real Y2K Bug Dot.Commers had free money to buy servers,
ad space, brands, people, and real estate
Slide 11
The Ugly Correction 2000-2001 The Internet is the engine of change and
productivity or we have a problem Forced the Establishment into e-business, but
the sense of urgency has waned If it ends it will end badly, but……. This is not 1929 yet because
– Leverage is less– Markets are more regulated– Instruments are more diverse
Slide 12
The Long Boom
Openness in technology, trade and communication
New technology– Internet and E-commerce– Genetics and genomics– Nanotechnology
Markets and networks over government and hierearchies
Slide 13
Knowledge as ValueProduct Price per PoundPentium III 800 Mhz $42,893.00Viagra 11,766.00Gold 4,827.20Hermes Scarf 1,964.29Palm V 1,726.92Saving Private Ryan on DVD 874.75Cigarettes 100.00Mercedes-Benz E-Class Sedan 18.98Chevrolet Cavalier Sedan 6.76Hot-Rolled Steel 0.19
Source: Fortune, March 20, 2000 p. 68
Slide 14
The Internet
Commerce
Computers
Communications
Content Community
Slide 15
Americans On Line
Percent of Adults Online from Home or Work
010203040506070
1995 1996 1997 1998 1999 2000
All OnlineOnline at HomeOnline at Work
Source: Harris Interactive, 2001
Slide 16
The growth of Internet access worldwide
372.32
313.13
257.67
197.6
95.43
130.63
0 100 200 300 400 500
2003
2002
2001
2000
1999
1998
= 5% of pop’l
= 9% of pop’l
(Source: eMarketer, eGlobal Report, March 2000)
Number of adults with Internet access (millions)
Slide 17
Comparative estimates by region (2000)
407.1
2.4
3.11
16.45
113.14
167.12
104.88
0 100 200 300 400 500
Total
Middle East
Africa
Latin America
Asia/Pacific
Europe
North America
(Source: NUA Internet Surveys, November 2000)
Number of adults with Internet access (millions)
Slide 18
Internet access for OECD nations
88
1219
2526
2934
3842
50
25
0 10 20 30 40 50 60
Italy
Germany
France
Japan
Finland
UK
Netherlands
Canada
Australia
Norway
US
Denmark
(Source: OECD, 2000)
Percent of adults with Internet access
Slide 19
Technology Diffusion
Drugs, sex, and rock ’n roll B 2 B usually before B 2 C Media accumulate
Slide 20
Morrison’s Five Laws of the Internet
Law 1: The Mother of all Commoditizers Law 2: The margin is captured by the
consumer not the innovator Law 3: It is a 1 to 1 medium but the
race is on to build mass brands Law 4: The Alberta Tar Sands Model of
internet advertising Law 5: There is a lot of physical
fulfillment in e-commerce
Slide 21
Business to Business Infrastructure Players
Hard Infrastructure: Cisco, Nortel Soft Infrastructure: Ariba, Oracle, I 2 New Plumbers: Razorfish, Sapient Hosters: Exodus, Worldcom Market Makers: Commerce One, FreeMarkets Vertical Markets: Neoforma, Metalsite Toolmakers: Kana, Siebel, BEA Systems
Slide 22
Market Capitalization of B2B PlayersSelected Market Capitalizations (Billions of Dollars)
March 2000 March 2001I-2 26.7 6.4 Exodus 25.7 4.7 Ariba 25.6 2.6 Commerce One 15.7 2.1Kana Communications 7.2 0.2FreeMarkets 6.6 0.4
Slide 23
Alternative B 2 B Models
Electronic Spot Markets E-Brokers Demand Collection Systems Reverse Auctions Auctions Electronic Marketplaces
Slide 24
Business to Business Models
Auctions
Sellers
Buyers
Slide 25
Business to Business Models
DCS
Sellers
Buyers
Slide 26
Business to Business Models
DCSAuctions E-Markets
Sellers
Buyers
Slide 27
Markets: From First Curve to Second Curve
First Curve– Capital– Producer – Atlantic– Japan– International Trade– Computers– Money– Market Segments
Second Curve– Knowledge– Consumer– Pacific– China– Electronic Commerce– Internet– People– Business Ecosystems
Slide 28
Organizations: From First Curve to Second Curve
First Curve– Mechanistic– Engineering– Corporations– Horizontal
Integration– Business Processes
Second Curve– Organic– Ecology– Individuals and
Networks– Virtual Integration– Culture
Slide 29
The 21st Century Organization
Hyper-Focused Firm Cultural Juggernaut Extended Enterprise Shared-Risk Alliance The Object Organization The Fishnet Organization The Self Generating Organization
Slide 30
Individuals: From First Curve to Second Curve
First Curve– Hard-Working– Security– Current Career– Faith– Loyalty
Second Curve– Hyper-effective– Uncertainty– Future Career– Hope– Courage
Slide 31
Issues and Impacts
Commoditization or Mass Customization The Rise of Perfect Markets Powerful New Intermediaries
– Re-intermediation versus disintermediation Digital cannibalization of overhead Don’t disrespect the First Curve (2000) Don’t disrespect the Second Curve (2001) Learn to play both curves
Slide 32
Staying on the First Curve
Own the First Curve Slide down the demand curve into
oblivion Export the First Curve Kill the Second Curve If at first you don’t succeed, rename it
Slide 33
Jumping to the Second Curve
Eat the Corporate Lunch Turn a small base into big bucks Develop a brass neck Look for exponential marketing Take up paradigm surfing
Slide 34
Playing Both Curves
Redefine the Value Chain Create Second Curve Portfolios
– Isolate, incubate, insulate, integrate Prune the Second Curve Shift Curves based on culture and competency Organize for Two Curve success:
– Scale, incentives, organization, people