I think CEOs often time forget that a potential must be persuaded to purchase a product. A sales force does add cost to the firm, but without the sales force, the company would be exclusive. As an associate in a retail company, we at times convinced customers that they “needed” the product. If the customer feels there is not a need the customer will not have interest in making. The web only encourages and adds convenience for customers because the internet more of a benefit for customers who know exactly what they need while the sales force helps convince the customer what they need.
The business of selling technology isn’t the same because organizations are no longer spending top dollars on technology. Technological companies are having to make adjustments through new initiatives including: cutting the expense, changing the selling and support models, focus on a small target and emulated consumer technology sales and support models.
In my opinion marketing tends to be one of the greatest expenses because technological companies have to advance within themselves create a must have product for customers. In order to create that product extensive research and development is required along with general and administrative costs.
The change in today’s economy poses more of a risk for technological companies, which requires an adjustment. Organizations are less willing to pay the top dollars for the technology, which therefore requires companies such as Oracle to increase the level of risk associated with the creation of a product.
Technological providers have to think beyond their corporate strategy because the industry is changing. Organizations now have to consider expansions through outsourcing or focusing on a value discipline and consider mechanism such as subscriptions and value based licensing to charge for the level of use of resources.
I feel that the change in the industry is moving towards service, which goes beyond offering higher levels of technology. The technological companies need to shift their target market and consider companies that aggressive invest in IT projects or companies that require constant innovation to maintain success within their organization. If the technological organizations are not considering shifting their markets, there needs to be a balance between buyers and sellers where both parties are at an optimal level of profits or equilibrium.
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4 comments:
I couldn’t agree more with you more that customers must be convinced that they “need” a product. I have not worked for a retail company like you have, but whenever I’m shopping, I ask my friends, “do you like this??”. Often they’ll say that looks awesome, “You need that!”, but then I get home and realize I really didn’t need whatever I just bought. If I hadn’t had them along convincing me of this “need”, than I most likely wouldn’t have made the purchase. Therefore, as you said a sales force does add cost, but potential buyers must be persuaded. It alarms me that CEO’s often fail to understand this.
Also, I agree that the IT industry is shifting to service as you pointed out, and the book recommended stalling new developments and focusing on their current services that are performing well. I am kind of surprised at this recommendation. If a company discovers a new technology they think will be in great demand and is easy to implement, then maybe they should work on the new technology while performing current services.
I agree, it shocks me to know that despite our level of intelligence, we can still be influence to invest in something we either don't need, or already have. You are so right though, we don't realize the lack of need for it until we are home and away from our "persuaders"
I also agree too that new technology that is in great demand along with simplicity of implementation shoucld be considered by a company if it increase the value of their current services.
I agree that the technological companies need to shift their target market to diversify their products to expand their business and not just isolate their technology. The company can find the way to develop other products under the technology they have already had. That will be another way to gain profit.
Besides, we should consider companies that aggressive invest in IT projects or companies that require constant innovation to maintain success within their organization.
The question still remains how far are companies willing to go to maintain constant innovation? Will organizations change their market, downsize to cover the cost of innovation to implement new projects? I think innovation is required to maintain competitive advantage but organizations must evaluate how they are going to innovate while either maintaining or changing their culture, strategy or target market to be successful.
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