This chapter first proposes that in order to remain successful to the emerging trend of less overall technology spending, sellers must take new initiatives. It seems to me the need for changes and reforms buyers experienced after years of reckless spending are nearly through and have now shifted to sellers. The needed changes, cutting expenses, changing selling models, and focusing on small markets to name a few, are drastic, but rapid implementation is needed.
At first, I was shocked to see focusing on smaller markets and planning to be acquired as a recommendation. Since technological investments are predicted to be less, then the greater the market, the greater the sales. However, I made this assumption before I discovered the distinction between the two types of sellers. The first composed of large companies offering broad ranges of products will be seeking to acquire the second, which consists of smaller sellers that focus on a specific business or function. I think the main challenge for larger companies will be choosing which companies to acquire and when. Acquiring a company with different business goals or attitudes could do more harm than help. Conflict between acquired employees and current ones could be detrimental, and management should prove the need for the acquisition and cooperation from the start. Next, I see timing acquisitions as an issue. For example, if word spreads of IBM’s new acquisition, Microsoft, SAP, and everyone else will need to do the same. Jumping on the latest trend without analyzing if it meets company goals can be damaging as shown by buyers in the 1990’s. Before acquisition, these companies should determine if they have enough money, time, and skills to implement the acquisition now or if it could be handled best at a later time. Despite these challenges for large companies, I think those of smaller companies will be much greater. With a threat of acquisition lying over their heads, these companies may be stressed and do things without thinking. The best approach I think they could take would be: avoid the possibility of an acquisition, limit target market, stall new product developments, and focus on products and services they perform best.
In conclusion, the substantial reduction in technology investments will challenge sellers who have enjoyed great demand for years. Since this book was copyrighted in 2004, I was curious if technological investments did in fact decline and if sellers experienced less demand. In another class, we study the economy using financial indicators from the Dismal Scientist. The report on durable goods for October showed the third consecutive drop in orders, and although weakness was caused by several components, the report claims the weakest segment computer products where orders fell 8.4%. Even though this is just October’s results, I think the reduction in investment will continue into the future encouraging sellers to revolutionize.
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2 comments:
I feel that because innovation, especially within technology, spending will remain at an average rate, however, the spending will be more strategic than "I must have it" spending. At the same time, there are some organizations that find it more cost effective to focus on smaller target markets,which will reduce their need for the "high" functional technology. With smaller target markets, there will be a shift in demand. The question that remains is, are companies willing to make such a drastic change?
I feel that whoever the buyers or the sellers have to change their business models and consider what IT projects companies or what innovation companies should maintain for their success. If the technological organizations are not considering shifting their markets, there needs to be a balance between buyers and sellers. Thus, any of them have to keep watching the changes of today's business environment.
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