ADM1370N Jan 14 , 2014 Innovative Connectivity; Digitization; Social Media Structure and Revenue
YUJIE YI (Nicole)
Social media tools connect people to processes and information
Create the connectivity.
It’s hard to get the right apps to the right people.
Apps are simply the means of doing that to help prevent information indigestion
Business processes gain new perspectives – people and businesses become more
It accelerates the data to information cycle to make information usage more efficient.
Data → Information → Knowledge (pp. 69)
Definition: Basically means the replacement of physical tasks by digital means –
Facebook is social digitization.
Significant business relationships have been digitally enabled
Supply chains are a good business example – we used to design products face to face
but now we often do it piece by piece in different locations.
1 /12 Ex: Walmart has a really efficient supply chain (a competitive advantage). Compared
with the warehouse storing, the digitize supply chains can cut down costs and keep
suppliers informed at the first time.
Definition: Goods that can be delivered over a digital network.
E.g., music tracks, video, software, newspapers, and books.
Industries with digital goods are undergoing revolutionary changes (publishers, record
labels, etc.) – pages 14 – 26 of Socialnomics Chapter.
These change impact many other processes (i.e. recruitment, marketing).
Changes to Business Processes
“Offline” avenues are also impacted by digital goods – i.e. social clubs, education, TV
channels (pp. 13).
Offline business (i.e. postal service) becomes online.
Canada Post obtains fewer profits because of the high cost of paper mail.
Instead of delivering everybody’s mail, Canada Post have several places in
downtown for people who still want their mails to pick up by themselves.
Bit Torrents & P2P (i.e. Napster) changed what we do. ADM1370N Jan 14 , 2014 Innovative Connectivity; Digitization; Social Media Structure and Revenue
YUJIE YI (Nicole)
Required new laws to be created because of technology.
Online banking – new security standards have to be created
To survive and thrive an organization must create a competitive advantage
Competitive advantage – a product or service that an organization’s customers
place a greater value on than similar offerings from a competitor.
Firstmover advantage – occurs when an organization can significantly impact its
market share by being first to market with a competitive advantage.
THE FIVE FORCES MODEL – Evaluating Business Processes and Strategy
Porter’s Five Forces Model determines the relative attractiveness of an industry.
3 /12 Porter’s 5 Forces Model
Buyer power – high when buyers have many choices of whom to buy from and low
when their choices are few.
Sellers don’t want their buyers have many powers, because they’ll have more rights
se IT t reduce buyer power (thus creating a competitive advantage) through loyalty
programs (i.e., shoppers’ optimum card).
Loyalty program rewards customers based on the amount of business they do with a
particular organization (frequent flyer programs, Shopper’s optimum, coffee shops
where you get your 10 cup of coffee free, etc.).
“Long tail” of social networking provides access to previously inaccessible market
niches and customers. (another way to reduce buyer power)
Impact of Social Media on an Industry’s Five Forces
Bargaining power of suppliers
(+/ ) Procurement using mobility tens to raise bargaining power over supplies (e.g.
Walmart and RFID), though it can also give suppliers access to more customers. ADM1370N Jan 14 , 2014 Innovative Connectivity; Digitization; Social Media Structure and Revenue
YUJIE YI (Nicole)
(+/ ) Mobility provides a channel for suppliers to reach end users, reducing the
leverage of intervening companies, but it may also provide direct channel to industry
rivals and thus disintermediate channels.
(+/ ) Mobile procurement and mobile markets tend to give all companies equal
access to suppliers, but they can also be used to create privileged access to some
Barriers to entry
(+) Increases barriers to entry by eliminating waste and contributing to efficiencies
(+/ )Mobile applications are difficult to keep proprietary from new entrants, but
consolidation favors incumbents.
() A flood of new entrants has come into many new industries.
Rivalry among existing competitors
(/ +) Reduces difference among competitors as offerings are difficult to keep
proprietary, but increases the potential for eff