Week+6

Team B

Ecosystem Strategies - Keystone - Physical Dominator - Niche - Commodity
 * Companies that create and share value.
 * Keystone corporations are so valuable, that their removal could cause and entire system failure. They try to help and improve their ecosystem for their own survival as well as the survival and prosperity of others. The Nash Equilibrium is a format that wise companies use to help determine their overall strategy - they recognize that the prosperity of the overall system depends on the prosperity of the individual players in the system. The theory describes a framework where each decision maker (company) makes the best decision possible based on the best-made decisions of all other players in the market - if somebody doesn't make the best decision, the system (market) becomes unstable until finding a new equilibrium point. Best decisions lead to an expanding market with everybody getting a bigger slice of the pie, and poor decisions lead to a contracting market with everybody getting a smaller slice of pie. Nobody wants an increasing share of a decreasing market.
 * We used Microsoft as an example in class. It is in Microsoft's best business interest to have many players in the computer market. Even though, for example, Firefox is a competitor to Internet Explorer, it still runs on the Windows OS. Another example would be none other than Intel. Most equate Intel with being the dominent microprocessor supplier in the market, which is true, but in the mid-90's they were also the dominent supplier of computer motherboards and PC systems. But the goal for Intel was not necessarily to be the dominant motherboard and PC system supplier. The goal was to design and quickly launch the platforms that would provide profit from the new technologies designed into the silicon parts. And during this time Intel worked with low-cost Taiwanese design/mfg companies with the goal of providing the new motherboard and PC system designs to then have these companies immediately mass-produce the products that would drive sales of Intel's core competency: silicon. Today Intel continues to work with multiple PC system suppliers such as Lenovo, HP, Acer, Dell, etc., creating the new platform designs that enable all the silicon features. The PC system suppliers then customize the base platform designs to differentiate from each other. In doing this, Intel continues to drive demand for their core competency: silicon design and mfg.
 * Due to the effects of generics, pharmaceutical companies are exploring new strategies within their ecosystem. How could the large pharmaceuticals become keystones, possibly for their retailers.
 * Sometimes companies try to leverage off an existing ecosystem when in reality the company is outside the ecosystem. An example is Wolfram Alpha's search engine. According to [|this] article in The Guardian Wolfram tried to position itself as superior to Google and the next evolution over Googles keystone product. In reality Wolfram is totally different than Google. Wolfram does mathematical calculations and doesn't even search the web. This caused alot of confusion with potential users. It's not always a benefit to try to add on to an existing ecosystem if you're outside that ecosystem; create a new ecosystem.-Eric I agree with Nick regarding the cash for clunkers. It resulted the same results once the money was gone. Perpetuates the same cycle.

Our Hotelling's Law example showed how a beach with two vendors (selling identical products at identical prices) will find that the vendors eventually migrate toward each other in the middle. Each vendor will serve half of the customers on the beach - one will draw customers from the East and the other from the West. It would seem that each would split the difference and relocate halfway to the center so that the distance to customers is as little as possible. However, each prefers to move closer to the center to keep the other from potentially relocating and taking a larger market share. I do agree, but believe as they migrate toward the middle, there is great risk involved with losing potential customer base from either the East or West. It was mentioned this is case, that such a move could cause such an outcome if the move was too close toward the middle.
 * Hotelling's Law**

Ecological Cycles: exploitation, conservation, release, reorganization. The question is did the financial bailout buy us some time before we cycle into a release? Or, did the financial bailout move us quickly through release and onto reorganization? -It would seem that the injection of money into cash for clunkers and the $10,000 program for first time home-buyers are Washington not allowing the economy to fall to the bottom of the cycle(it can be debated we are there now!). Cash for clunkers forced would be car purchasers to wait until the program was put into effect; creating a month long hiatus that would have normally been spread out. A stimulant in the form of money is the same as any other stimulant; you come down and expect more to maintain at that level. We need to let these industries burn down and grow back stronger. Whereas government intervention with the 'Cash for Clunkers' program produced short-term positive effects for car mfg'ers and some buyers, it is/was just that: a **short-term** or band-aid solution. The overall ecosystem was disrupted by an external variable that is not nor was ever intended to be sustainable. A sustainable business plan ensures short-term profits with long-term growth. I would argue the government's short-term cash infusion defnitely caused us to take significant back-up steps.

I also agree we took back-up steps. When I look at the adaptive cycle, I see the release and then the subsequent reorganization step involving a paradigm shift. I'm not seeing a paradigm shift in our current economy; I think we are still struggling with inertia.

4 P's - tonight we covered "Place"

Destination shopping Example: Woodburn Outlet Mall - people are traveling longer distances to get there and thus feel like they have to spend more at the location. They see "destination shopping" as more of an entertaining activity or a fun way to spend the day. In the end, people end up spending more $$. Although the stores are competing for our business, they are also cooperating to bring in business to the mall, as a whole. It's interesting how the mall concept came about. Someone had to take the first step to create that destination. It wasn't always part of the ecology system.

We were talking about retail (or I was....hee-hee) and I found an interesting article and Consumer-Centric Retailing--an approach that my company is using []

PS: Jerry is the man! I agree.