Before we move the discussion onto our team’s case analysis of the newspaper industry’s current business model, I feel it’s pertinent to provide a backdrop to a few common disruptive technologies. In general, the publishing industry, from newspaper to medical publishing, has been attempting to predict, harness, and capitalize on technologies that are sustainable and have long-term growth. However, forecasting and predicting future trends will only be as good as the tools a person uses to forecast and the people who are actually doing the forecasting.
The publishing industry has suffered greatly because the act of publishing has become much simpler and less costly than it was before the Internet. However, this doesn’t mean that there is no value to having an article, manuscript, story, or paper published professionally. In today’s publishing environment, publishers need to be agile and have the ability to detect and capitalize on emerging trends. This is easier said than done, especially for established publishers. Following is a brief overview of a few disruptive technologies. While these disruptive technologies are not necessarily directly related to publishing, it will help to more fully understand our team’s case analysis and our reasoning behind our strategic actions and recommendation.
Defining customer needs is difficult. Many technology products are not designed for a specific use, while some products are developed for a specific application, but constantly changing customer needs end up altering how the product is developed and marketed. We’ve identified three technology products that have the capability of fulfilling differing customer needs depending on the market in which these technologies are used. Ranked from most important to least important, these technology products are fuel cell cars, social networking sites, and geographic information systems (GIS). We’ve linked these technologies to fairly specific markets and ranked these technologies according to two criteria, their disruptive potential and how well these technologies meet the current, pre-defined customer needs. While the markets for fuel-cell technology, social networking, and GIS may not be fleshed out completely, these technology products offer useful insights into the direction that our society is generally heading in the next 5 to 10 years.
Hydrogen fuel cells have been around for several years, but 2008 saw fuel cell vehicles available to the public in small numbers. Honda’s Clarity FCX fuel cell vehicle is being leased to select residents of Southern California. Chevrolet has begun to test market it’s Equinox fuel cell SUV in New York, Washington DC, and Southern California. Although both are limited productions, and the future of fuel cell vehicles are uncertain, this marks the first time the technology has been available to the public at large.
Fuel Cells generate electricity from a chemical reaction with pure hydrogen as fuel. The hydrogen reacts with oxygen, producing only water vapor as a byproduct. Fuel Cell vehicles use electricity generated by onboard fuel cells to power an electric motor that actually drives the car. The three biggest problems with the technology are the cost of producing the cars, the difficulty and cost of producing pure hydrogen and the lack of distribution channels for hydrogen fuel. There are 70 or more hydrogen fueling stations in the US, many in Southern California, and this limits the range of fuel cell cars. The vehicles are very expensive, and some doubt whether fuel cell cars will ever be commercially viable.
The reason fuel cell cars are being created is problems with pollution, cost, and international implications through our reliance on oil. Rising gas prices have led to a demand for alternative fuels that could become cheaper in the future. Carbon dioxide emissions and other pollutants from cars damage the environment and contribute to global warming. More and more people are becoming concerned about the environment and are demanding new fuels that produce fewer emissions.
However, there is not a huge immediate need for fuel cell vehicles. Standard gasoline engines, gas-electric hybrids, and future plug in electric cars are all alternatives to fuel cells. Customers don’t really need fuel cell vehicles at this point, which is partially why there is such limited production. There are many alternatives, and the people who are hurt most by high gas prices are unlikely to be able to afford the price tags associated with fuel cell vehicles. Since the support infrastructure is so limited and there are so few refueling stations, owning a fuel cell car at this point is actually an inconvenience. Whether these vehicles catch on will depend on whether the costs of producing the vehicles can be decreased, whether easier and cheaper methods of producing hydrogen can be developed, and whether hydrogen distribution infrastructure can be put in place.
Our second ranked technology is social networking sites. Facebook is a well-known example. Facebook was originally designed as a college networking tool, but has since morphed outward to encompass a much larger audience. The next generation of Facebook is LinkedIn. It is the businessperson’s version of Facebook. It allows a user to stay in contact with business associates, look for new jobs, and even post their resume for others to view.
The next version of this technology is part of the collection of technologies that make up Web 3.0. This technology has not yet been implemented, but it is feasible. What separates Web 3.0 from Web 2.0 stems from the fact that communication is done in real-time. In contrast, every user of Facebook currently must login, read the message, and then post their reply. Web 3.0 would effectively change this process and allow someone to interact with other people as if they were in the same room.
People have a desire to communicate with each other. This technology created another medium for that to happen. The difference between social networking and the telephone, another medium of communication, is that there is no limit to the applications of social networking. It is a dynamic technology that can meet a variety of needs. For example, consider Web 3.0 technologies. This technology could be used to interview future employees, seek advice from experts, manage distant parts of your company, communicate with headquarters while traveling, help your clients, or sell your product.
Social networking technologies do not fulfill a specific customer need; however, it provides convenience and saves time and money. These are all worthwhile attributes, which has been a part of this technology’s commercial success. The technology push through Web 3.0 innovations will help to further define customer needs.
Mapping technologies, specifically geographic information systems or global positioning systems, are the third worthwhile product technologies introduced in the last few years. Geographic information systems (GIS) meet an even more salient customer need through the combination of critical data with the map. GIS have various uses: from getting directions to saving lives in the hospital. Hospitals use GIS to route ambulances pathways to optimize the transport of a patient or any other emergency situation where time is of the essence. GPS systems allow a controller to know the position of all emergency response vehicles and to integrate images from traffic cameras which leads to better decision making.
There is a constant need to improve services and improve processes. GIS aid customers by integrating data with 2-D or 3-D maps to aid in decision making. For instance, some utilities use GIS to visualize customer location and pipeline locations and how to dispatch units. GIS systems give companies a competitive advantage by making the business more efficient.
GIS were ranked third because the systems are still relatively complex, are costly, and have limited availability. These barriers are keeping the majority of potential consumers out of the market. In addition, this is an incremental improvement technology which will cause more consumer adoption as prices come down. Moreover, mapping areas need to be expanded as does the information that enhances the map. Consumers will increasingly use items such as the Navteq Traffic Patterns as prices lower and the mapping and information areas become greater.
For many businesses the return on investment is evident. Many have found that digital maps with the overlay of statistical information enhance decision making to aid in the generation of a greater ROI. For instance, insurance companies can better gauge risks of insuring a beachfront house in Florida by using images and data from hurricanes and other historical weather patterns. Unmanned aircraft and other technologies have evolved out of this visual interface of data to enhance decision making. GIS systems are undergoing incremental improvement and finding more and more widespread use and application.
Fuel cell vehicles could be considered a market pull innovation, while it could be argued that social networking and mapping technologies are technology-push innovations. In either case, it is evident that customer needs are not always fulfilled with a particular technology product. While a product might benefit society as a whole, it might not be lucrative enough for a company to pursue. Quite possibly, a customer may not know what they need and it is up to companies to define that need through innovation and technology products. Lastly, even if customer needs are pre-defined, a technology product may not be successful for any number of reasons, such as price barriers, substitutes, or lack of distribution channels.
