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Agi Partnerships In A Downturn James Richardson
1. A Geographic Perspective on the Importance of Partnerships in an Economic Downturn Sarah James, IT Project Manager, Mouchel PLCJohn Richardson, Marketing Manager, Innogistic 29th September 2010
2. Overview Evidence suggests that a greater number of strategic partnerships are being formed by companies within the geographic market. Why is this happening? How does this relate to the market lifecycle model? How will the management of partnerships help during an economic downturn?
8. Mergers, Acquisitions or Partnerships? “Much better to buy small and often than the one big acquisition that busts the company.” Richard Holloway “There is little point trying to compete solely on price as there will inevitably be someone cheaper.” Marketing Paradigm
9. Good in theory but what about practice? The decision, having the insight and business acumen to work together like the Innogistic and Mouchel case: “Shortly after the software was up and running at Mouchel, both parties realised that there would be other organisations with the same problem as Mouchel who would be interested in this solution”
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11. Where can partnerships come from in the Internet Age? “Digital world watching” Facebook or LinkedIn profile Twitter No substitute for face to face communication
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14. The Future of Life, the Universe and the Geospatial Market.
15. Conclusion Innovations to come over the next 5-10 years (3dTV, the cloud etc) offer great potential for strategic partnerships. GIS has enormous –possibly scary -potential EG Linking to other IT such as CCTV and Government networks and databases to GIS Could the world largest internet provider and the world largest data provider ever come together in a partnership and provided free data and free information to the world? Such then are the potential partnerships for the future.
Notes de l'éditeur
Geospatial industry = young, vibrant market brimming with innovation and exciting new ideas.This has certainly been true in the better times.Recession and global downturn = damper on things and companies “can do” to weather this storm.Paper = roles that strategic partnerships play in geographic market
Marketing and business strategists, and now even geographic strategists, well-developed and tested theoretical model for the lifecycle of any given market,beginning with the innovation and growth phases and ending with maturity and decline. lifecycle model point for strategic alliances and partnerships to strengthen. There is already evidence of this happening more and more within our sector. In the paper we look at Why? How? And the economic downturn
Strategists will recognise - distribution curve model for a market or product lifecycle The model - growth of a given market or product over time beginning with innovation, growth, maturity finally decline. However looses some of its validity or predictive power when applied to broader, more multi-faceted markets. In the next example - significant new innovations can elongate the overall life of the market - continuously answering demand but in ever-evolving and innovative ways.
IT-based geospatial and GIS market born in 1980s. Before then processing power of available computers was insufficient to cope with the data processing levels needed!!!Third generation of computing (i.e. computers that use integrated circuits, disk storage and online terminals) the software and hardware that our industry needed.The first picture in 1975 is one of the worlds early (35 years ago). Before I was even born.Disc drive units shown (which are inexchangeable) are 200MB discs. Processor is an ICL 1904S and it operated on 64K of memoryCost of a typical installation was around £2million. In 2010 iPod storage as 40MB. Would have cost £80 million. £100 for an iPod is worth it because of how far we have come.
Lifecycle Curve where is geospatial market - geospatial market is a lively and intelligent sector and has been a source of a huge number of innovations and new ideas which have grown to become dynamic and viable business offerings in their own right. increasing evidence - change in our market - more established business sector, and the strong growth of the 1990s and 2000s has begun to slow. higher levels of company mergers and acquisitions; for example, Pitney Bowes’ acquisition of Map Info and more recently, Hexagon’s acquisition of Intergraph. There is also Trimble’s acquisition of Defines’ Earth Sciences Business to expand its GeoSpatial Portfolio and a URS Acquisition Offer recommended by Scott Wilson.
transition period = increase in the number of mergers and acquisitions - join forces to compete better, look to create differentiation in their offering or invest to gain market share. In a recent article by Warwick Ashford in Computer Week, he states that the UK was second only to the US in the number of technology sector mergers and acquisitions during the first quarter of 2010. The same article quotes Richard Holway, the chairman of research company TechMarketView, who said: “Much better to buy small and often than the one big acquisition that busts the company.” But what is the choice for those organisations that wish to remain independent? Victor Kiam - which says: “There is little point trying to compete solely on price as there will inevitably be someone cheaper.” A position that the low cost airlines are currently finding a little uncomfortable! To answer this, Professor Michael Porter - company either differentiate by justifying higher price, or to focus their offering on a specialist market segment. This, of course, is fine if you are talking about consumer products or services but it is a little more difficult to apply when talking about the business-to-business environment.
Unfortunately, today’s geographic market is reaching its maturity stage - market more volatile and increased levels of competition beyond where it would have been if this had occurred in better times. It therefore follows that geospatial organisations need to fully research and understand their individual competitive environments far more closely than before. With that knowledge, the idea of a partnership as a strategic solution - innovator grow his or her business into a mature organisation.create differentiation in many ways, forming strategic partnerships and alliances is certainly a strategy for these hard times and past evidence has suggested that existing partnerships grow stronger during a recession and are thus an enabler for market growth as we exit the downturn.
Everyone is speaking about the influence of social networking on the web. The phenomenal growth of Facebook, LinkedIn and Twitter is being debated in every newspaper, blog, news, website and business forum. Increasingly businesses, make use of the power of social networking to get their message across to customers. However, social networking, as a two-way process, also has the potential to act as an inward conduit of information and a link to ideas and business contact networking. This has proved of particularly value in the development of IT solutions and new product offerings. It is inevitable that where there are two or more individuals discussing possibilities and developments, business ventures are formed. But whereas this used to just be limited to a table in the local pub or a meeting at a trade organisation, now we are discussing business ventures in real time with people on the other side of the world. For example Geovation. So what does this mean for forming partnerships? How do you go about creating partnerships in this brave new world? How can you change with the times and why should we embrace the new technologies of today to help us create partnerships for the future?
Are we, in reality, likely to see greater merger, partnership and acquisition activity? In short yes John and I believe so!The prudent MDs of geospatial companies should already be planning how they will react to these eventualities. They should already have their plans in place to welcome, combat or instigate merger, acquisition or partnerships.Building a successful business is always a fine balancing act and requires us all to walk a narrow path which could lead to heaven or hell. Will the company grow, develop strong partnerships, thrive, merge if it wishes too, allowing the move gracefully into heaven or will it contract, isolate itself from possible beneficial partnerships, be subject to hostile takeover & subsequent rationalisation or asset stripping, thus taking it to hell.
Next 5-10 years there will be a vast number of innovations; 3dTV, hologramatic imaging, the cloud! However, all these innovations will breathe new life into the geospatial industry, elongate and refresh its lifecycle and provide the opportunity for further partnerships to be formed and to thrive.The cinema, as usual, can give us a highly stylized view of the future. Films like, Enemy of the State and Eagle Eye show the potential and sometimes scary power of GIS when combined with other forms of IT such as CCTV and pervasive Government networks and databases. Some say that this is already happening but one hopes that the reality is somewhat more benign. But this is certainly a scenario which a high profile partnership might bring. What would happen, for example, if the world largest internet provider and the world largest data provider came together in one of these new partnerships and provided free data and free information to the world? Has it all ready happened?The GIS specialist could therefore disappear into the business analyst role for companies and GIS solutions will be about creating visualisation for those in the board room, to help them understand the overwhelming amount of data which is available. Technicians and map makers will need to develop skills in 3D technology and be able to create the means to display useful analysis of data using many different tools, GIS being only one. Such then are the partnerships for the future.