Is it a good idea to encourage ALL employees to trade in these markets? Should insiders and/or highly uninformed people be allowed to trade? Do they help or hurt the market?
Yes, it certainly is important to encourage all employees to trade in prediction markets. Prediction markets are speculative markets created for making predictions. Prediction market is a tool companies are increasingly using to make better decisions by allowing employees to trade in a mock stock market based on information they have about the business. The advantage of having an open prediction trading system gives employees an incentive to share information they have that may be valuable. Several large companies have started using this tool to help make assessments about all kinds of projections including how customer numbers will grow, assess demand for their products, what changes needs to be made and so forth. Therefore, this tool benefits the company in making informed decisions. So, the higher the number of employees that use prediction markets the better it is for the organization.
Although insiders or highly uninformed people may not have all the information to trade, however they will increase the number of participants. As mentioned earlier, the higher the number the better it is for the company to get an aggregate view. Due to the increased number of uninformed traders and insiders the ‘Law of Large Numbers’ come into play resulting in aggregated views and will work to the benefits of the organization. Sometimes, the social and cultural issues which may have prevented an employee from sharing information are also, kept aside, because all trades are anonymous. Therefore, all employees must be allowed to trade in prediction markets because they actually help the company and the market.
Information about Google from additional research
Source: http://www.consensuspoint.com
Google, the search giant, has been using such markets since 2005 to estimate - among other things - traffic volumes, and when its international offices will open. About 1,500 employees will trade at any one time, and each has 10,000 ‘Goobles’ - a mock currency - to play with per quarter. The markets run for anywhere between two weeks and three months. When they close, successful traders are given cash prizes and specially branded T-shirts which end up being a greater incentive than the money.
Thursday, April 23, 2009
Thursday, April 16, 2009
Threadless Discussion Question
In what other industries or areas would Threadless’ community-driven product development model work well? And not so well?
Threadless’s community driven business model works well due to two main reasons. (1) Firstly, the business model itself is unique and has created a first mover advantage. (2) Being a small company, it has focused on small scale manufacturing which has enabled the members to continue their contribution to Threadless. Threadless’s business model actively involves customers, which is unlike other apparel companies that release monotonous t-shirt designs. At Threadless members actively participate by critiquing designs, blogging and by posting songs and videos. Threadless has also been profitable by selling the designed t-shirts to its members.
Basically, Threadless business model offers customization of products. This community driven product development model will work well in an industry that focuses on limited or specialized number of product lines. In other words, the model will not work out well in large manufacturing industries such as cars, machinery and parts. In large scale manufacturing industries products are usually designed/manufactured in a monotonous manner due to economies of scale and mass distribution. So it will not work well here. On the other hand, Threadless’s model will work well in the following industries and if implemented right it will also enable the company to make huge profits.
Threadless’s community driven business model works well due to two main reasons. (1) Firstly, the business model itself is unique and has created a first mover advantage. (2) Being a small company, it has focused on small scale manufacturing which has enabled the members to continue their contribution to Threadless. Threadless’s business model actively involves customers, which is unlike other apparel companies that release monotonous t-shirt designs. At Threadless members actively participate by critiquing designs, blogging and by posting songs and videos. Threadless has also been profitable by selling the designed t-shirts to its members.
Basically, Threadless business model offers customization of products. This community driven product development model will work well in an industry that focuses on limited or specialized number of product lines. In other words, the model will not work out well in large manufacturing industries such as cars, machinery and parts. In large scale manufacturing industries products are usually designed/manufactured in a monotonous manner due to economies of scale and mass distribution. So it will not work well here. On the other hand, Threadless’s model will work well in the following industries and if implemented right it will also enable the company to make huge profits.
- Furniture industries
- Home Building
- Manufacturing Antique products and designs
Thursday, April 9, 2009
Social Networks Discussion Questions
Online social networks have become ubiquitous in the past few years. What forms of value do users get from these services and who is most likely to sign up on LinkedIn versus other sites?
In the past 5-10 years, Internet has enabled a communication revolution. Most importantly, it has changed the way we work, connect with people and even the way we live. Social networking has become a fundamental part of the global online experience. Social networking is not just growing rapidly; it's evolving both in terms of a broader audience and compelling new functionality to meet the competition and the increasing needs and expectations of an average user. Examples of few famous online social networks are Face book, Friendster, MySpace, LinkedIn.
Value –
1) Social Networking focuses on building online communities of people. People share interests and activities and connect with other people around the globe.
2) Provides different ways to interact with people such as instant messaging, emails, exchange photos, share blogs and stories.
3) Allows people to find friends who are located in different parts of the world. Most importantly, builds a bridge so that friends can reconnect.
4) Allows individuals to promote their own businesses and sometimes helps with raising initial investments from venture capitalists.
LinkedIn – LinkedIn is an interconnected business oriented social networking site mainly used for professional networking. The purpose of the site is to allow registered users to maintain a list of contact details of people they know and trust in business. (http://en.wikipedia.org/wiki/LinkedIn)
Although the social networking tools offers the above value and benefits, the following individuals are most likely to sign up on LinkedIn versus other sites:
Ø Business Professionals who want to be connected with other experts around the globe.
Ø Recruiters, Hiring managers and Head Hunters
Ø Job Seekers
Ø Executives and Senior Officers
Ø Individuals who own or would like to own a small business like to sign up so they can get connected with venture capitalists.
In the past 5-10 years, Internet has enabled a communication revolution. Most importantly, it has changed the way we work, connect with people and even the way we live. Social networking has become a fundamental part of the global online experience. Social networking is not just growing rapidly; it's evolving both in terms of a broader audience and compelling new functionality to meet the competition and the increasing needs and expectations of an average user. Examples of few famous online social networks are Face book, Friendster, MySpace, LinkedIn.
Value –
1) Social Networking focuses on building online communities of people. People share interests and activities and connect with other people around the globe.
2) Provides different ways to interact with people such as instant messaging, emails, exchange photos, share blogs and stories.
3) Allows people to find friends who are located in different parts of the world. Most importantly, builds a bridge so that friends can reconnect.
4) Allows individuals to promote their own businesses and sometimes helps with raising initial investments from venture capitalists.
LinkedIn – LinkedIn is an interconnected business oriented social networking site mainly used for professional networking. The purpose of the site is to allow registered users to maintain a list of contact details of people they know and trust in business. (http://en.wikipedia.org/wiki/LinkedIn)
Although the social networking tools offers the above value and benefits, the following individuals are most likely to sign up on LinkedIn versus other sites:
Ø Business Professionals who want to be connected with other experts around the globe.
Ø Recruiters, Hiring managers and Head Hunters
Ø Job Seekers
Ø Executives and Senior Officers
Ø Individuals who own or would like to own a small business like to sign up so they can get connected with venture capitalists.
Thursday, April 2, 2009
Wiki Discussion Question
How do Wikipedia’s processes for creating and modifying articles ever lead to high-quality results?
Wikipdia is a free content encyclopedia project. It is written collaboratively by individuals all over the world and anyone can edit any content. Visitors do not need special knowledge or need to be a subject matter expert to contribute to wiki. They can add, edit information, cross references however must comply within Wiki’s edit policies and standards.
Wikipedia produces high quality results, because wiki model is different when compared to other tools such as blogging. Wiki gives its users incentive for their writing. If a user writes high quality articles citing apprpriate references and sources of information then chances are that it will stay in the website. However, if a user writes something inaccurate or something that annoys or disputes with people then there is a high chance it will dissappear from the site. All users to the Wiki site have read, write, edit and delete access which makes it easier to remove inapprpriate content that do not add any value and ensure the site delivers only high quality content.(atleast for the most part).
Quick Statistic (Reference Wikepedia Site) – Due to its high-quality content Wikipedia has grown rapidly into one of the largest reference websites attracting atleast 684 million visitors yearly by 2008.
Wikipdia is a free content encyclopedia project. It is written collaboratively by individuals all over the world and anyone can edit any content. Visitors do not need special knowledge or need to be a subject matter expert to contribute to wiki. They can add, edit information, cross references however must comply within Wiki’s edit policies and standards.
Wikipedia produces high quality results, because wiki model is different when compared to other tools such as blogging. Wiki gives its users incentive for their writing. If a user writes high quality articles citing apprpriate references and sources of information then chances are that it will stay in the website. However, if a user writes something inaccurate or something that annoys or disputes with people then there is a high chance it will dissappear from the site. All users to the Wiki site have read, write, edit and delete access which makes it easier to remove inapprpriate content that do not add any value and ensure the site delivers only high quality content.(atleast for the most part).
Quick Statistic (Reference Wikepedia Site) – Due to its high-quality content Wikipedia has grown rapidly into one of the largest reference websites attracting atleast 684 million visitors yearly by 2008.
Thursday, March 26, 2009
Blogging at DrKW
What are the advantages and disadvantages of implementing internal versus external employee blogs in a corporate setting? Are there certain industries where one of these strategies makes more sense?
Internal Blogs
Internal Blogs are great communication and information sharing tools within the company. Internal Blogs encourages spontaneous information among employees and can be shared at any time and most importantly it removes the pressure because employees are not required to post information within a specific time.
Advantages & Disadvantages – The informal nature of the Internal Blogs allows the employees to express their views more freely when compared to any external communications, which is subject to careful review and edits prior to release. This encourages free flow of information. In some cases, Internal Blogs serves as an alternative for meetings. Especially, when a company has many branches spread across different parts of the country and/or employees are operating at different locations, blog serves as a tool to connect employees for virtual meetings. Internal Blogging serves as a ‘Knowledge Management Tool’ as it increases employee participation and collaboration, promotes dialogues outside the team and enables to find different sets of ideas across divisions. In some cases, solutions/different alternatives to a business problem can be found by encouraging an integration of conversations. Internal Blogging provides ‘unlimited’ space for sharing interpretations and different points of view, which can be used for further debates. It serves as an easy tool to share and serves as a means to understand an integrated view of the organization as a whole. Internal Blogging promotes ‘organizational knowledge’ & ‘builds trust’ by serving as a record of the organization’s thoughts and conversations. Internal Blogging is secure compared to External Blogs, due to the safeguards that are put in place to ensure more control. Although Internal Blogging has many advantages it does not reach the customer and obviously fails to capture the public views of the company or the product. In some instances, information contained in the blog could be biased and one-sided because it is usually posted by an SME within the company or someone that is very close to the issue.
Internal Blogging is suitable for service/tech industries where there is a mass of expert knowledge. Service/Tech industries solely rely on expertise. By sharing their knowledge to specific issues in a blog site, employees could create their own job aid for newer employees and/or for current employees. This could also serve as a ‘free’ training guide.
External Blogs
External Blogs are publicly available sites where internal employees, customers, any other interested party has the ability to share information or read the posts.
Advantages & Disadvantages - One of the biggest advantages of External Blogs is that it includes the customer and incorporates the public information whether good or bad. External Blog serves a ‘communication tool’ where information is being transmitted from customers/public to company or vice versa. It can be used to announce upcoming new products or services, clarify customer concerns and react to public criticism. Given the informal nature of the blog, companies can communicate with the target market at a more customized or personal level when compared to a formal level. This in turn could builds positive relationship with the customer and could improve the marketing and branding activities. Therefore, an External Blog could serve as a ‘Sales & Branding Blog’. Like the Internal Blogs, External Blogs also serve as an organizational learning tool because now they can also learn from the customers. Sometimes customers may have better information/suggestions about the products because they tend to use the competitors products. An External Blog provides an opportunity to learn about the competitor’s information and the customer’s feedback/psychology about the various products. Therefore, it enables companies to harvest more knowledge from the external environment. Although External Blogs present the above advantages, there are some risks associated with it. Given the open nature of the External Blogs, firstly it is not safe and secondly it is prone to inappropriate or negative information posted by customers/public. This is turn could affect the brand name. So, if a company decides to use External Corporate Blog they must analyze these risks and take a calculated well-informed decision.
External Blogging is suitable for companies that are looking to develop a network or a community around themselves. Secondly, it is also suitable for companies that are developing new products or services because customer feedback and input is very essential in the product development process.
Internal Blogs
Internal Blogs are great communication and information sharing tools within the company. Internal Blogs encourages spontaneous information among employees and can be shared at any time and most importantly it removes the pressure because employees are not required to post information within a specific time.
Advantages & Disadvantages – The informal nature of the Internal Blogs allows the employees to express their views more freely when compared to any external communications, which is subject to careful review and edits prior to release. This encourages free flow of information. In some cases, Internal Blogs serves as an alternative for meetings. Especially, when a company has many branches spread across different parts of the country and/or employees are operating at different locations, blog serves as a tool to connect employees for virtual meetings. Internal Blogging serves as a ‘Knowledge Management Tool’ as it increases employee participation and collaboration, promotes dialogues outside the team and enables to find different sets of ideas across divisions. In some cases, solutions/different alternatives to a business problem can be found by encouraging an integration of conversations. Internal Blogging provides ‘unlimited’ space for sharing interpretations and different points of view, which can be used for further debates. It serves as an easy tool to share and serves as a means to understand an integrated view of the organization as a whole. Internal Blogging promotes ‘organizational knowledge’ & ‘builds trust’ by serving as a record of the organization’s thoughts and conversations. Internal Blogging is secure compared to External Blogs, due to the safeguards that are put in place to ensure more control. Although Internal Blogging has many advantages it does not reach the customer and obviously fails to capture the public views of the company or the product. In some instances, information contained in the blog could be biased and one-sided because it is usually posted by an SME within the company or someone that is very close to the issue.
Internal Blogging is suitable for service/tech industries where there is a mass of expert knowledge. Service/Tech industries solely rely on expertise. By sharing their knowledge to specific issues in a blog site, employees could create their own job aid for newer employees and/or for current employees. This could also serve as a ‘free’ training guide.
External Blogs
External Blogs are publicly available sites where internal employees, customers, any other interested party has the ability to share information or read the posts.
Advantages & Disadvantages - One of the biggest advantages of External Blogs is that it includes the customer and incorporates the public information whether good or bad. External Blog serves a ‘communication tool’ where information is being transmitted from customers/public to company or vice versa. It can be used to announce upcoming new products or services, clarify customer concerns and react to public criticism. Given the informal nature of the blog, companies can communicate with the target market at a more customized or personal level when compared to a formal level. This in turn could builds positive relationship with the customer and could improve the marketing and branding activities. Therefore, an External Blog could serve as a ‘Sales & Branding Blog’. Like the Internal Blogs, External Blogs also serve as an organizational learning tool because now they can also learn from the customers. Sometimes customers may have better information/suggestions about the products because they tend to use the competitors products. An External Blog provides an opportunity to learn about the competitor’s information and the customer’s feedback/psychology about the various products. Therefore, it enables companies to harvest more knowledge from the external environment. Although External Blogs present the above advantages, there are some risks associated with it. Given the open nature of the External Blogs, firstly it is not safe and secondly it is prone to inappropriate or negative information posted by customers/public. This is turn could affect the brand name. So, if a company decides to use External Corporate Blog they must analyze these risks and take a calculated well-informed decision.
External Blogging is suitable for companies that are looking to develop a network or a community around themselves. Secondly, it is also suitable for companies that are developing new products or services because customer feedback and input is very essential in the product development process.
Thursday, March 19, 2009
iPod vs. iPhone Discussion
Has the digital music market irreversibly tipped in Apple’s favor?
Based on the information presented in the case it does feel like the digital music market has tipped in Apple’s favor atleast for the time being. With over one million songs to choose from and backed by the five major record labels, iTunes presents a tremendous opportunity to understand the digital music landscape. However, given that digital music is in its early stages of development and Apple is the only company that has proven successful within a short period this could eventually change in the long run if another company comes up with a better competing technology. In other words, the case clearly indicates that the competitive landscape for Apple is increasing.
Most importantly a lot of things occurred in 2007 that seems to threaten Apple’s stranglehold on the digital music market. Microsoft launched its new Zune MP3 players, meanwhile Amazon launched a DRM-free MP3 download service at a cheaper rate compared to Apple. However, it will take a long time for these companies to really defeat Apple in the digital music market. The competitors must really succeed in their product offerings in order to weaken Apple’s stranglefold. Apple’s iPod’s and iTunes have created many customers in the market and it has gained a leading position as a result of its early mover advantage and 99 cents per song pricing, (per the case by spring 2006 Apple’s share of the US digital music market ranged between 70% and 80%). Many customers are satisfied with the iTunes and iPod experience and for most of them DRM does not matter. They can buy songs on iTunes and comfortably load them on their iPods. Eventually in the long run, Apple may lose some of its grip and stranglefold on the digital music market when the competitive players take bigger leaps and introduce a better technology than Apple. But with the right business model, technological improvements and increased customer base Apple will continue to be the leader in the digital music market for some more time.
As mentioned earlier digital music is in its early stage with one just Apple being the dominant leader in the market. Additional research suggests that the market for digital music would grow six times in several years and would reach $14.9 billion by 2010. Digital music in 2006 represented 12% of all revenue posted by record labels. Research suggests this will grow to 40% of the overall record label revenue by 2010. With nearly $33 billion in total recorded retail music revenue accumulated in 2005, this is an enormous opportunity for those involved in mobile and broadband distribution across the supply chain.
Based on the information presented in the case it does feel like the digital music market has tipped in Apple’s favor atleast for the time being. With over one million songs to choose from and backed by the five major record labels, iTunes presents a tremendous opportunity to understand the digital music landscape. However, given that digital music is in its early stages of development and Apple is the only company that has proven successful within a short period this could eventually change in the long run if another company comes up with a better competing technology. In other words, the case clearly indicates that the competitive landscape for Apple is increasing.
Most importantly a lot of things occurred in 2007 that seems to threaten Apple’s stranglehold on the digital music market. Microsoft launched its new Zune MP3 players, meanwhile Amazon launched a DRM-free MP3 download service at a cheaper rate compared to Apple. However, it will take a long time for these companies to really defeat Apple in the digital music market. The competitors must really succeed in their product offerings in order to weaken Apple’s stranglefold. Apple’s iPod’s and iTunes have created many customers in the market and it has gained a leading position as a result of its early mover advantage and 99 cents per song pricing, (per the case by spring 2006 Apple’s share of the US digital music market ranged between 70% and 80%). Many customers are satisfied with the iTunes and iPod experience and for most of them DRM does not matter. They can buy songs on iTunes and comfortably load them on their iPods. Eventually in the long run, Apple may lose some of its grip and stranglefold on the digital music market when the competitive players take bigger leaps and introduce a better technology than Apple. But with the right business model, technological improvements and increased customer base Apple will continue to be the leader in the digital music market for some more time.
As mentioned earlier digital music is in its early stage with one just Apple being the dominant leader in the market. Additional research suggests that the market for digital music would grow six times in several years and would reach $14.9 billion by 2010. Digital music in 2006 represented 12% of all revenue posted by record labels. Research suggests this will grow to 40% of the overall record label revenue by 2010. With nearly $33 billion in total recorded retail music revenue accumulated in 2005, this is an enormous opportunity for those involved in mobile and broadband distribution across the supply chain.
Thursday, March 5, 2009
BrightCove and the Future of Internet Television
What are the strengths and weaknesses of Brightcove’s business model?
Strengths
One of the major strengths of Brightcove’s business model is its core focus on helping the video-rights owners build businesses around the delivery of content via broadband Internet. Their core focus helped construct a new model for media delivery where video publishers essentially controlled their own content. Brightcove’s focus marked a shift from the traditional media businesses where control resided with broadcast networks. Brightcove’s approach marked a significant positive change in the market. Brightcove developed the software technology platform to drive this radical shift. With its publishing platform, Brightcove presented a turnkey solution for creating and maintaining broadband video channels. Brightcove’s unique business model allowed video publishers to gain unprecedented control of the delivery and monetization of their content. Secondly, Brightcove’s model served the “long tail” of video content. The nonlinear nature of online programming created a new opportunity for video content owners to distribute vast libraries of content just like Netflix. Thirdly, the model put Brightcove at the center of a new, multisided television ecosystem. Brightcove was an all-in-all, in other words served many stakeholders. Just like the broadcast network, Brightcove distributed producers’ content both to consumers and affiliates, sold advertising, created a b2b marketplace just like eBay. Through Brightcove’s offerings, website affiliates were also gaining advantage. Fourthly, another strength of Brightcove’s business model is its usage-based fee plans. Although it followed this system, it aimed to shift more and more of its customers to revenue sharing arrangements based on advertising and pay media sales. The model enabled publishers to rent or sell ‘near DVD quality’ video downloads and let publishers keep 70% of the revenue from such transactions.
Weaknesses
Firstly, Brightcove’s goal is to become a multisided media distribution business serving not only content owners but also advertisers, distributors and consumers. The relaunch of the website is a major step toward fulfilling this ambition as this will help attract more content owners. However, other steps are necessary to develop the remaining sides of the multisided business. The development of this business will require lot more resources and most importantly cost and time. Brightcove should understand the existing competition in the market most importantly from giants like Google / You Tube. Brightcove may end up focusing on too many things, which could lead to confusion, customer frustration and at the end of the day it could be a stretch to reach the main goal. Secondly, Brightcove’s platform customers during the early stage fell into two categories of which one group were large media companies that expected “high-touch” service from Brightcove, while insisting that they retain full control over use and branding. Demands for customization work drained crucial engineering and business development resources and made it harder to manage the transition from providing back-end technology services to constructing a media distribution network. Thirdly, Brightcove’s goal is to make a strategic transformation from a platform business to a media distribution business. Google made a successful transition by leveraging its search technology licensing business. Apple and Microsoft had built prominent media businesses after first succeeding as technology platform providers. However, the issue is Brightcove lacks the “deep pockets” and the established user relationships that the other companies possess.
Strengths
One of the major strengths of Brightcove’s business model is its core focus on helping the video-rights owners build businesses around the delivery of content via broadband Internet. Their core focus helped construct a new model for media delivery where video publishers essentially controlled their own content. Brightcove’s focus marked a shift from the traditional media businesses where control resided with broadcast networks. Brightcove’s approach marked a significant positive change in the market. Brightcove developed the software technology platform to drive this radical shift. With its publishing platform, Brightcove presented a turnkey solution for creating and maintaining broadband video channels. Brightcove’s unique business model allowed video publishers to gain unprecedented control of the delivery and monetization of their content. Secondly, Brightcove’s model served the “long tail” of video content. The nonlinear nature of online programming created a new opportunity for video content owners to distribute vast libraries of content just like Netflix. Thirdly, the model put Brightcove at the center of a new, multisided television ecosystem. Brightcove was an all-in-all, in other words served many stakeholders. Just like the broadcast network, Brightcove distributed producers’ content both to consumers and affiliates, sold advertising, created a b2b marketplace just like eBay. Through Brightcove’s offerings, website affiliates were also gaining advantage. Fourthly, another strength of Brightcove’s business model is its usage-based fee plans. Although it followed this system, it aimed to shift more and more of its customers to revenue sharing arrangements based on advertising and pay media sales. The model enabled publishers to rent or sell ‘near DVD quality’ video downloads and let publishers keep 70% of the revenue from such transactions.
Weaknesses
Firstly, Brightcove’s goal is to become a multisided media distribution business serving not only content owners but also advertisers, distributors and consumers. The relaunch of the website is a major step toward fulfilling this ambition as this will help attract more content owners. However, other steps are necessary to develop the remaining sides of the multisided business. The development of this business will require lot more resources and most importantly cost and time. Brightcove should understand the existing competition in the market most importantly from giants like Google / You Tube. Brightcove may end up focusing on too many things, which could lead to confusion, customer frustration and at the end of the day it could be a stretch to reach the main goal. Secondly, Brightcove’s platform customers during the early stage fell into two categories of which one group were large media companies that expected “high-touch” service from Brightcove, while insisting that they retain full control over use and branding. Demands for customization work drained crucial engineering and business development resources and made it harder to manage the transition from providing back-end technology services to constructing a media distribution network. Thirdly, Brightcove’s goal is to make a strategic transformation from a platform business to a media distribution business. Google made a successful transition by leveraging its search technology licensing business. Apple and Microsoft had built prominent media businesses after first succeeding as technology platform providers. However, the issue is Brightcove lacks the “deep pockets” and the established user relationships that the other companies possess.
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