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Monday, March 06, 2006
High Tech Strategist

I read a monthly newsletter called "The High Tech Strategist". It is written by an individual investor in the US, who does a tremendous amount of research on companies in the technology industry. I highly recommend the newsletter. In the November addition, a few key points were made about the technology industry:

1) Comapnies with large exposure to the consumer sector did relatively well in Q3, while those whose businesses were more enterprise-driven did not.

2) Semiconductor companies are particularly vulnerable to a consumer sales shortfall, as consumer end markets accounted for a greater percentage of their sales in Q3 than ever before.

3) The seasonal inventory build for consumer goods peaks in Q3, which means that we could face a higher than normal drop-off in Q4.

This near-urgent situation reminded me of analysis that I read in a book called "The Experience Economy". The contention of this book is that there are 5 kinds of things that a company can charge another company for. Each of these 5 things sends a different message about your company. Here they are:

Commodity- If you charge for "stuff", then you are a commodity business

Goods- If you charge for tangbile things, then you are a goods business

Services- If you charge for activities that you execute, then you are in the service business

Experiences- If you charge for the time to help clients create experiences, then you are in the experience business

Transformations- If you charge for the demonstrated outcome the client achieves, then and ONLY then are you in the transformation business

Given the facts that I described from "The High Tech Strategist", I think it is time that we enter the "transformation business" with our clients. What do you think?

posted by Rob @ 5:42 AM  
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