Grow Your Business vs. Destroy Your Business
Both Grow Your Business (GYB) and Destroy Your Business (DYB) strategies are essential for companies to understand if they plan to remain in a competitive market long-term. The DYB strategy implies the assessment and evaluation of products offered in terms of their design and price. In essence, the strategy is necessary for identifying existing flaws and, therefore, examining the advantages and disadvantages of a company’s position with regards to whether or not it can sustain its profitability long-term.
However, the technique is quite disruptive to business activities because all stages of operation are subjected to scrutiny. Nevertheless, DYB remains a powerful tool that companies can use to realize their faults before it is too late. If comparing DYB with GYB, the latter implies a company uses the information gathered from product evaluations and employs it for introducing various business enhancing practices, while the former cannot recommend any specific actions for improvement.
An interesting point to mention is that the GYB strategy capitalizes on relationships with customers through developing a new client base while nurturing the one that already exists. In terms of profitability, staying competitive against rivals, and sustaining the business long-term, both strategies ensure that businesses know their strengths and use them accordingly. However, the DYB strategy is more useful because it encourages companies to identify their weaknesses, stay focused on their achievements, and make any necessary changes in cases when there are significant limitations in their performance.
Cannibalization
Market cannibalization refers to the adverse impact that a new product introduced by a company has on the performance and sales of already existing products. In this case, a new product “eats” or “cannibalizes” the demand for other products, thus negatively affecting the overall sales of a company, as well as influencing the market share. When a business introduces a product, the demand for which is higher than for any others by the same brand, the bottom line can be drastically affected if this is done unintentionally. With the negative aspect of cannibalization, products’ lives end prematurely due to the shift in demand for a new product.
However, there are instances when cannibalization is done intentionally and therefore can have a positive impact on a market share of a business. The cannibalization strategy may facilitate the capturing of a large market share that has previously been occupied by a competitor. In comparing cannibalization to the DYB strategy, it is hard to identify which one is better because companies may find themselves in different situations. While both strategies will allow businesses to build future success on past success, the cannibalization strategy is superior because it can be controlled more efficiently.
The first example of cannibalization offers a positive look at the strategy. Apple, Inc. as a company is a bright example of this strategy, which predominantly brings positive results. When Apple releases a new iPhone, iPad, Apple Watch, or MacBook, it expects that the sales of older versions of the mentioned products drop because the company made the newer ones better and more advanced intentionally (“Market cannibalization,” 2018). In some cases when newer Apple products are extremely superior to outdated versions that are reaching their maturity, the share is captured.
The second example of business cannibalization shows that the strategy can often be improperly implemented. The introduction of Amazon Kindle as an alternative way for customers to buy and read books has drastically affected the brick and mortar business (Rankin, 2015). Since the company sells print books on Amazon.com, selling e-books is counterproductive, and despite increasing the overall demand for book reading, the company contributed to the decline in print book sales (Li, 2013). The implications of this move are different. For instance, publishers have started setting higher prices on ebooks to account for the fact that print versions are not bought as often.
Aligning Information Systems and Business Strategies
Changes in business strategies usually entail the reevaluation of information systems (IS). The main reason for doing so is to ensure that IS goes hand-in-hand with the new strategy. On the other hand, with the new advancements in IS, business strategies should also be reviewed for determining whether any of the long-term impacts harm a companies’ operation. For instance, when the market for smartphones began to advance quickly and led to significant changes on a global scale, every business was forced to reassess the way they use IS. Since the influence of smartphones on modern business is extremely large, those companies that overlook the trend and continue using dated IS tend to perform worse than their competitors.
Another reason for aligning business strategies and IS refers to the adequate use of social information technologies that companies use regularly. When a business changes its strategy, or rebrands, social IS are key vehicles that can aid in communicating this change to its potential customers (Pearlson & Saunders, 2013). Areas for improving a social business strategy include innovation, collaboration, and engagement, all of which are supported by the successful use of IS.
The last reason for reevaluating information systems when business strategies change is the lack of alignment between the two; disruptions can lead to struggles in the operational performance until the balance is restored (Pearlson & Saunders, 2013). Such struggles can limit competitive advantage, lead to employee turnover, and prevent companies from being clear in their strategic direction. Because of this, the alignment of business strategy and information systems a company uses can be lacking.
Social IT for Aligning IS and Business Strategies
In modern business, information technologies (IT) have a variety of uses. As mentioned previously, social IT can be used for aligning a company’s business and IS strategies through engaging with the target demographics for establishing an enhanced presence. For instance, when a company transforms its strategy from manager-led to a cooperative organization, social IT can be used for communicating the news through media outlets and making sure that not only employees but also customers understand the change that has occurred.
When it comes to collaborative capabilities, social IT is an efficient way to share information among workers of a business that need to be aware of the changes in business strategies. In return, workers are encouraged to collaborate and give their feedback on changes that managers then review. It is advised for the higher management of companies, HR specialists, department managers, and regular employees to use social IT to enhance collaboration within companies.
While some companies use social IT already available to the general public (e.g., Skype, Viber, Facebook, Twitter, etc.), others pay software developers to create specific social software that can only be used by a company’s employees. Regarding how social IT can be used for aligning IS with a business strategy, the best way is to only use it during working hours to avoid the leakage of unwanted information.
References
Li, H. (2013). The impact of ebooks on print book sales: Cannibalization and market expansion. Web.
Market cannibalization. (2018). Web.
Pearlson, K., & Saunders, C. (2013). Managing and using information systems: A strategic approach (5th ed.). Hoboken, NJ: Wiley.
Rankin, J. (2015). Third-party sellers and Amazon – A double-edged sword in e-commerce. The Guardian. Web.