Interactive participation is not only enjoyable as an educator but creates an environment which allows the application of concepts as well as active involvement from students. Reading this blog article, you will understand why I enjoy the interaction.
This blog article was inspired by a student last semester during a discussion about business strategies. Thanks to Shannon McGreevey for posing a question during a lecture that challenged me to analyze her question and expedited mental agility for an accurate response.
Technology Should Be About Technology?
Imagine a football coach preparing for the next game. When the referee starts the clock in the first quarter, it is about football and execution. However, the preparation is about strategy … viewing and analyzing videos, compiling data (e.g., videos, game/individual statistics), and then assembling a strategy for the next game before designing a series of plays.
Many business and education professionals believe that implementing technology should focus on technology using complex technology concepts (e.g., cpu speed, network protocols, cybersecurity methods, etc.).
In my first class for every semester, I hold up my phone (heresy in a class these days haha) and say this …
Raise your hand if you believe this (the cell phone) is the focus of technology.
Almost everyone raises their hands … While those that don't are thinking "he is tricking us" or may not awake yet 😊.
The answer at the end of this article.
Technology is Business Strategy
An example to begin the discussion.
Would your company decide to modify the design and composition of a product by immediately implementing the change? I hope not. Why? If the topic was redesigning a product (for example a toaster), there are many questions and data points to consider.
- Are sales declining for our toaster? Is the toaster market declining?
- What are the trends for competitors relating to market share or sales? Are there any substitute products for toasters that affect market trends?
- If the market for this product remains viable, then the strategy should be focused on design features, product cost and/or quality.
Business professionals should focus on the strategy guiding the process. Not the concepts of how electricity creates heat to the unit.
Why? By focusing on business strategy.
Consider the toaster as the cell phone. The strategy will focus on the design of those features and functions which are embedded in the cell phone mobile app to return the desired outcomes and goals of the corporation to fulfill a market need.
By focusing on the customer (consumer, buyer) and the internal goals of the business organization. Profit, market share, operating costs, brand recognition and product quality.
All focused on a competitive advantage strategy.
Walmart, Strategy and Technology
Consider Walmart. For those of us that are older, what was their advertising campaign involving the "smiling yellow face" (1990 - 2006)? "WAL*MART Always Low Prices. Always". In commercials, showing a price sign with numbers falling off the sign. Lower prices.
Sure, we know that Walmart negotiates with their suppliers to reduce their product cost. But how did they implement a low-cost branding in addition to a supplier negotiation process? A technology strategy coupled with streamlined processes.
Setting the stage. Walmart analyzed the process of ordering replenishing products that are maintained at their store locations. The shelf stock level requires an accurate balance between overstock (especially for spoilage or seasonal items) and low stock.
An empty shelf translates into lost sales. If the "stock outs" continue and magnify at the store level, a loss of customers. What do you and I do when we cannot find a product in a retail store? Ordering online. So how did WAL*MART approach technology "strategy"?
- Analyzing the process of ordering replenishing stock for their stores. An empty shelf translates into lost sales.
- By integrating suppliers into the inventory levels (e.g., store level and warehouses) associated with their product line.
- Instead of Walmart buyers monitoring and ordering stock from its suppliers, they decided to integrate the suppliers into the Walmart systems to eliminate "manual" monitoring of stock.
- The new process would automatically order products when the store's quantity on hand falls below the safety stock value.
- Then, this new strategy and process would create additional efficiencies by implementing technology systems.
- Why? To lower labor costs (manual process of analyzing stock and re-ordering manually), risk of stock outs (loss of sales), increase brand (shelves always stocked with product ready to purchase), and reduce manual intervention by both suppliers and Walmart for expedited shipments..
Now the questions to consider. Why would Walmart's suppliers …
- Expend the resources and expense to accept the responsibility of processing replenishment orders for Walmart?
- And the time and expense of new technology systems?.
Expend the resources and expense to accept the responsibility of processing replenishment orders for Walmart?
And the time and expense of new technology systems?
If you would like to print a copy of this article, click Porter_2024-04-24-Part1.
If you wish to continue to Part 2 of this article, click here.
I hope that this blog article was enjoyable and informative. If you reference any information from this article, it would be appreciated to cite this article.