Market Shift Strategies
In the 1990s and the early 21st century, a sense emerged that a lot of markets are necessarily shifting due to the digital revolution, and that corporate strategies will have to reflect this fact. The nature of the shift was not merely away from various analog technologies, such as film cameras or bricks-and-mortars video rental operations. Rather, the shift in question has also involved greater interaction in the generation of commonly held property, such as common knowledge of the human gene sequence, to a degree that eliminates some corporate strategies and shifts others. Some have called this "mass collaboration."
Other People Are Reading
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Technological Shift
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The Eastman Kodak Co., long a dominant presence in film photography, had to lay off 6,000 employees around the world in the summer of 2003. Around the same time, it made the strategic (though, some critics think, belated) decision to pursue a leading position in the new markets of digital photography.
By 2005, Kodak was the leading seller of digital cameras in the United States. Nonetheless, it lagged behind the leaders (Sony and Canon) in the global picture. Its near-brush with obsolescence can serve as a cautionary tale against complacency. There is always the possibility that the market will shift away from what you are doing, and your strategy always has to be flexible enough to meet that possibility.
The Life Sciences
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Kodak's strategy had to play catchup with the market. But Merck Pharmaceuticals acted ahead of a market shift, when in 1995 it released 15,000 gene sequences into the public domain. By doing this, and by following the same pattern for all the gene sequences uncovered by Merck over the years to come, the company gave up any profits it could have made by laying claim to those sequences as its own intellectual property (IP).
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Merck's Market Shift Strategy
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Merck sees gene sequences not as one of its products, but as a crucial input for its products. By encouraging open collaboration in gene sequencing, Merck ensured that its development and marketing of drugs would not be hindered by transaction costs and licensing fees.
As Don Tapscott and Anthony D. Williams explain in their book, "Wikinomics," before Merck's move there had been concern in the pharmaceutical industry that a "gold rush dynamic" was developing that would end with the whole human genome staked out by one entrepreneurial group or another, hindering progress. But "recent evaluations" indicate that the threat of such a dynamic has "significantly eased." This is an example of mass collaboration.
Mass Customization
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A related market shift is the mass customization of products. Through innovative supply-chain arrangements, companies such as IKEA have learned to provide efficient production of the common element of products with the inclusion of individually customized elements at retail.
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References
- Photo Credit pharmacie image by muro from Fotolia.com
