ANEXO 1: CONSULTA DE COBERTURA

Sumantra Ghoshal and Christopher Bartlett have noted: “In the slow-growth 1990s, however, overcapacity is the norm in most businesses: 40 percent in automobiles, 100 percent in bulk chemicals, 50 percent in steel, and 140 percent in computers, for example. Both technological progress and customer needs are driving toward smaller lot sizes and higher variety.”12

Old local companies can, and do, now compete all over the world. New companies can, and do, now enter traditional industries. As firms no longer need to make everything that they plan to sell they can buy it from someone else entry bar- riers are evaporating. Totally new entrants, or firms that historically competed in other industries, can combine com- ponents from other companies. They don’t need huge amounts of capital or specialist knowledge. Invisible invaders can attack conventional companies from all directions. Supply is surging – and it will keep on surging.

Costless communication

Finally comes the phenomenon of decreased communication costs. Information costs have dramatically plummeted. In 1930, a three-minute call from New York to London cost some $250 (in 1990 dollars). Thirty years later, the cost for a similar phone call was down to $50. Now, we are approaching zero.13_{Similarly, the cost of sending a 40-page}

document from LA to Washington is $9 by fax; $16 by FedEx; $3 by snail-mail; and 9 cents by e-mail.14 _The

Internet provides zero-variable transaction costs – costs that occur when you do business (setting up and controlling con- tracts, etc.). Little wonder that Michael Dell has said that the Internet is only surpassed by telepathy.

Sending information has never been cheaper. Ditto searching for information. IT enables us to scan the entire market. We can scan the world. Armed with our search

engines, we are no longer restricted to the special offers in our neighborhood. CompareNet, for instance, offers detailed information on more than 100,000 consumer prod- ucts.15 _{The flood of information allows us to always find}

the best deal. Infomediaries are already a powerful force. Some 16 percent of all US car buyers shop on-line before turning up at a dealer.16 _{The Internet, or any other source of}

processed information, makes comparison shopping a picnic.

The return of the demanding customer

We are moving toward increasingly perfected markets. The result is total competition. In the surplus society the cus- tomer is more than a king: the customer is the mother of all dictators. And this time it’s for real. If the customer speaks you have to jump high and jump fast. The customer wants products in orange with purple spots. The customer wants them today in Fiji. You have to deliver otherwise you will soon be out of business. As Lou Gerstner, Chairman and CEO of IBM, put it at the OECD Ministerial Conference in Ottawa, Canada, in 1999: “Control ... has been tacitly trans- ferred into the hands of tens of millions – soon hundreds of millions – of users worldwide.”17_{Power to the people. The}

figure below illustrates the consumer’s metamorphosis over the last 40 years – from cheeping mouse to roaring lion; from nice, stupid and humble to mean, smart and demanding.

This is only the beginning. Aided by new infomediaries, people will use the Net to link up with their binary siblings – other individuals with similar cravings. They will join hands and create unions – customer unions. Just look at LetsBuyIt.com, an Internet auction-house/co-shopper, which has realized that in an age of senseless supply, those who own the demand are in charge. If you are buying a new car, how much bargaining power do you have in relation to Ford Motors, Honda, Daimler-Chrysler or even the smallest

car company in the world? Not a lot. But, what if you could link up with 999 other consumers who are interested in buying the same car? Today, we can. The power is ours to use and abuse. Consumers of the world unite. Technology provides the tools. Values provide the frame.

Some may assert that they’re unlikely to see any of these developments in their industry. Maybe they won’t but, one way or another, we will all be affected. There will be no exceptions. Your suppliers may be directly affected or your customers. If so, so will you. The force of the demanding customer or client will be felt up and down the supply chain. Universities will feel it. Soul singers will feel it. Car companies will feel it. Diamond dealers will feel it. The question of who will pay for this is not clear – maybe all firms will. The question of who will be the ultimate winner is easier – the final customer: you. We own the marketplace, lock, stock and barrel.

102 FU N KY B US I N E SS FUNKY VILLAGE Dead duck Over- supply Under- supply High Low

Information search costs Market

situation

Demanding dictator

Competing for attention

In an age of abundance, companies have to work hard to get noticed. They are on constant tip-toe at the back of the frame trying to squeeze in. Companies are competing for a few seconds of attention. They want to be noticed in the tidal wave of information hitting everyone, everywhere and all the time. In fact, they have to be noticed.

To get noticed, they go to extremes. Excess is a business necessity. In a commercial for Miller’s beer a magician makes hair grow from the armpits of the women around him. A Mercedes-Benz TV commercial in the States fea- tures a woman who so enjoys driving the car that 20 seconds into the spot she has an orgasm – from driving a car. Extreme times call for extreme measures. This is a “seen it, had it, heard it, done it, been there” type of soci- ety. Sameness sucks!

In the funky village, real competition no longer revolves around market share. We are competing for attention – mind

share and heart share. If you cannot capture the attention of prospective customers or employees, you are out. To attract them, you need to provide experiences that are immediate, intense and instant. In an excess economy, attention is scarce. Handle it with care.

Indeed, we may well have to start paying for attention. American marketing star Seth Godin, talks about permission marketing.18 _{Our contacts with those customers who don’t}

want to drown in a tidal wave of information will be by invi- tation only. Yesterday, we had to pay for newspapers, phone calls and Internet connections. Today, we can get them for free, as long as we are prepared to read, listen to or watch ads. Tomorrow, we will be paid for it. We will be paid to receive a particular newspaper, to use a particular telephone company or Internet service provider. Paying for attention is the logical progression from what is already happening.

NOT ONLY ISthe funky village marked by abundance and excess, the three driving forces also cause dramatic changes in time, mass and space.19_{Everything is being turned upside}

down and inside out. We used to do business in a world where there was plenty of time. What mattered could be seen and touched, and the game was taking place in our own back yard. No more. Now, a weird wired world is unravel- ing in front of our eyes. The new society is developing in real time; competition is brain-based; and the economy is globally linked.

Let us provide you with a road map for the future. The current contraction in time and expansion in space leave you standing here. 104 FU N KY B US I N E SS FUNKY VILLAGE Contraction Expansion Contraction Expansion Space Time