Strategic tools for the practising manager

KIT

THIS WEEK: INDIAN DIGITAL ACCESSORIES PART II

Digital accessories include high-end electronic items such as premium mobile phones, PDAs and digital cameras.

High-end digital cameras with video capabilities place themselves above simple digital still cameras, camcorders and handy cams and non-digital photographic cameras, with a category engagement of 22 per cent.

Affluent sections in the northern and southern parts of the country are better aware of digital camera brands than their western and eastern counterparts.

Consumers in the 30 year and above age bracket are the most aware; however, those between 30 and 40 years rank higher in their purchases of branded digital cameras.

On an average, the affluent Indian consumer buy a digital camera every two years.

The per capita annual spend on premium digital cameras is approximately Rs 17,000.

Word of mouth, through friends and relatives of affluent consumers, is the strongest medium of brand awareness, with up to 61 per cent of the population indicating this trend.

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NUGGETS

Viacom and CBS have pulled videos from Google's YouTube. The Academy of Motion Picture Arts and Sciences recently requested that some Oscar footage be taken down from YouTube as well. And Google's efforts to sell radio and print advertising have not met expectations.

In short, Google's ability to navigate the traditional media landscape doesn't seem to be going particularly well. What's the problem? The simple answer: The traditional media environment is complicated. While Google has the resources to create significant deals with content companies, it still must contend with a number of confounding crosscurrents "" content owners' concerns over intellectual property and a clash of advertising models, among others.

Signing a deal with a television network like CBS is just the first step; figuring out all the back-end issues to make the partnership work is a whole other issue.

"It's difficult for Google," says Wharton marketing professor Patricia Williams. Traditional media companies "have models that have evolved to be inefficient."

For instance, a single snippet of video content "" such as a commercial "" most likely has multiple parties looking for compensation. An actor in a television commercial may get paid every time it runs, and the ad agency could also be remunerated based on the number of times the commercial is aired. What happens if that same commercial is uploaded and played on YouTube?

At Google, the search is on for a new approach to old media
Knowledge@Wharton
March 2007
Read this article at http://knowledge.wharton.upenn.edu

Firms compete to incorporate new technologies and services that will give them a competitive and economic advantage over their rivals.

For instance, advances in information technology have enabled firms to develop new retail channels via the internet and to offshore an increasing number of productive activities. But what drives the diffusion of new technologies across sectors?

The diffusion of new technology can be an adoption decision (hospitals buying new medical equipment), or a development decision (automobile manufacturers launching a hybrid engine).

In this working paper, Francisco Ruiz-Aliseda from the department of economics and business at Universitat Pompeu Fabra, Barcelona, and Peter Zemsky, associate professor of strategy at INSEAD, step away from the standard, cost-driven model of technology diffusion and explore what happens when time-consuming, costly development is brought into the equation.

The authors find that the first mover's competitive advantage for adoption lasts longer, but the payoff for development is higher.

Adoption is not development: first mover advantages in the diffusion of new technology
By Peter B Zemsky, Francisco
Ruiz-Aliseda
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