Category: Business Strategy

Creating a blog involves much more than merely choosing a theme, posting an entry and publishing it live to the internet. If you are going to be blogging for money how do you intend to monetize your site or even generate traffic since you will need a steady flow of visitors to your site. Before all this however, consideration must be given to what your subject is going to be and your ability to supply the content needed for your blog posting. This in fact is the most critical stage of the blog building process because the direction you choose will dictate the degree of success you experience! And if you intend to be blogging for money the stakes are even higher, making this stage all the more important!

Here are 5 critical stages through which you must pass to help establish the direction your blog building efforts will take and the probability of your success!

Got an Idea

Do you know what you want to write about? Is it something other people will want to read about? Remember a blog is actually a small ‘niche specific’ social network site so to be able to successfully generate traffic there will need to be an interest. But regardless of demand your very first step is focusing on what you will be writing about.

Got Passion

Blog posting will take a lot of time, research and just plain effort so it is advisable to always choose a subject with which you have an interest. This interest or passion will be the driving force behind your motivation to continue learning about the subject your site is based upon. This research will supply you the content you will need for your posting and will serve you well during the blog building process which tends to take time. And speaking of time…

Got Patience

As previously mentioned blog building takes time and results are often slow in developing. If you are blogging for money results may take even longer since you first have to gain reader loyalty and then their willingness to spend money on your site! Are you patient enough to continue investing time and effort even before you have any measurable results to show for it? This is a question only you can answer so if you do not want to devote a lot of your time into something and then walk away before you are successful, you may want to think twice

Got a Strategy

Are you blogging to be heard or to be paid? Personal blogs involve more of a ‘go for it’ type strategy whereas business blogs needs more structure and of course a business plan! If you are blogging for money you will need to determine how you will get paid and when you will even start marketing products on your site. Some business bloggers launch their sites and immediately begin to promote products while others first develop a strong and loyal following. In this area you will have decisions to make as to what direction you want to take.

Got a Blog

If you answered yes to all of the above then the only thing you seem to be lacking in is motivation if you do not already have a blog! Time to get busy but relax, setting up your own site is relatively easy and can actually be a lot of fun. Enjoy!

Creating a blog successfully is dependent upon the ‘developmental’ stages you take before even selecting a host or determining how you will generate traffic. It is the thought you put into what subject you will focus on and your honest determination as to the level of your commitment. The 5 stages reviewed above, will help you evaluate both your commitment and abilities to create the content needed for your blog posting. Whether you will be blogging for money or for personal reasons, success in terms of how you choose to measure it will likely take time and definitely effort! Knowing and excepting this beforehand will increase your chances of achieving whatever goals you may have established for your blog!

In many industries the pricing models are as old as the industries itself, and the rules of the game were set a long time go and are well known by everyone. This is not the case of SaaS. Being a young software delivery model, the key factors of a good pricing strategy are not that clear.

It seems, just by taking a look at the pricing models of many SaaS offerings, that traditional licensing model of the on-premise software is not the best idea for OnDemand software.

Also, the traditional services (like consulting) model “I charge for the time you are using my resources (professionals) and their value (junior, senior, etc…)” doesn’t seem to be the best way to approach the SaaS pricing problem (probably fits better when talking about cloud computing). We are not talking about traditional services, we are talking about pricing a subscription business.

In SaaS, the change from offering “products” to “services”, from “acquire” to “subscribe” implies the need of defining the best way for charging for the solution offered.

So, any SaaS provider faces the problem of fixing the right price to its solution / services. There are many alternatives and factors that should be considered when dealing with this.

Most of the proposals out there use some (or all) of this ideas:

* Pay periodically: This means charging the customers on a regular basis (usually monthly).

* Pay for each user: Very widely used, from Salesforce to that new SaaS start-up that two college students just started.

* Pay for the resources: This usually means computing resources: CPU/hour, GB, Bandwith, etc… it is used very often in IaaS or PaaS.

* Pay for the features: So the customers pays just for the features in our solution they really need. Maybe new functionality or maybe simple using ‘more’ of the tool (for example more applications in a PaaS offering).

Each of this ‘ideas’ have its own pros and cons. For example, ‘paying for each user’ has the problem of generating fear in the customer about adopting the solutions widely, or ‘pay for the resources’ has the problem of the customers not knowing what they will pay the next month…

In one word, usually SaaS pricing models are more flexible than in the traditional license-based on-premise software, and mean less risk and a wiser spending. This can, though, lead to a problem of complexity that should be taken care of.

Let’s take a look about something one should always keep in mind, the goals that any pricing strategy for SaaS should pursue in order to sustain a profitable business model.

* Make it interesting for a new customer to start using the product. Having a free version, a trial version, or simply a ‘pay-as-you-go’ strategy starting low, usually solves this.

* Make the costs for the customer predictable. Everyone likes to know what to expect when talking about paying… some SaaS offering have this problem (specially those that have cost based pricing models). One should let the customer know, and decide what they want to spend. Though we should keep in mind the next goal.

* Try to increase the customer share once the customer is using the tool. This can be achieved in many different ways, most of them related to the ‘pay-as-you-go’ model (features, users, resources, etc…). The customer should feel that spending more really means extracting more value from the tool.

* Don’t make the pricing model too complex. This is a problem very often found in SaaS offerings, and that can make the adoption of the tool by the market slower and harder. Let’s keep in mind that many companies are not used to SaaS yet.

* Make sure that the customer does not abuse in the use of the solution. This can happen quite easily in solutions where lots of data are involved, like those that use video, business intelligence tools, etc… the provider should be protected against this.

So, how would this goals and the main ideas explained in the first post be applied when defining a SaaS pricing strategy?

Let’s take a look at a real world example: coghead

Coghead is a very good, and quite veteran PaaS offering that distinguishes itself by giving the chance of developing an application on their platform mostly by visual “drag and drop” operations. They are well funded and should be considered as a strong competitor to companies like Intuit with quickbase or Salesforce’s force platform.

So, let’s analyze their pricing model without talking about money, we are interested in the model:

* They charge basicaly on three different concepts: users, records and file storage.

* They offer a free account with: 1 user, 2000 rows and 100MB of space.

* From there you have two options to scale: the workgroup bundles (with discounts) or the ‘pay-as-you-go’ more flexible depending on your needs.

* There are four different workgroup bundles: plus, pro, premium, business, each one with a fixed price for a certain number of users/records/space. Of course a bundle is cheaper than having the same amount of usage via ‘pay-as-you-go’.

* The ‘pay-as-you-go’ model basically charges you for each user/10000 rows/1 GB you use.

You can take a deeper look at Coghead’s pricing model here.

Let’s talk now about how does this pricing model relates to the “model ideas” and goals we talked about:

* They, obviously have a periodic (monthly) payment. Something that makes perfect sense for a PaaS offering.
* They charge both for the users and for the resources used. This is very often used in PaaS offering, that can be very easily overused. Charging for number of rows or space is a way for Coghead to make sure nobody abuses the platform.
* They have some feature pricing also: Limited users and acces point for applications that wish to be public.
* They have both ‘pay-as-you-go’ and a ‘package’ alternatives.

So, they seem to use all of the ideas we talk about, this, of course brings a problem of complexity but gives the users a lot of flexibility.

And now the final question, does this pricing models achieve the goals we wrote about in this post?

* It is certainly atractive for a new customer/developer to start knowing/using the platform via the free basic account.
* About making the costs for the customer predictable: They offer this through their bundled-workgroup choices. You know what you pay for. This is not true in the ‘pay-as-you-go’ option, which is also more expensive, so their pricing model tends to bring customers to the ‘workgroup’choices.
* Increase the customer share: This true for the ‘pay-as-you-go’ , but not so true for the ‘workgroup’ option, where de customer could hesitate before buying the next and more expensive bundle.
* Don’t make the pricing too complex: We really think Coghead fails at this one, their pricing model is quite complex for the average user. We didn’t even talked here about their partner offerings or the concepts behing the different kind of users. We asume that, for a PaaS offering whose customers are both business and technically skilled, complexity is not such a big problem.
* Avoid customer abuse: This is quite covered there is no easy way that a customer could make a very extensive use of the platform without paying for it. Maybe they could have a problem with bandwidth, something they don’t charge for (they actually have limits at least for public/web users of an app).

We consider that the usual behaviour of a customer would be to:

1. Try the free account.
2. Go for the first bundle.
3. Then the second, third, and finally the ‘business’ option.
4. If the customer has further needs they wouldn’t have any option but going for the quite unpredictable ‘pay-as-you-go’ model.

So, in the end, increasing the complexity of their pricing model by using most of the usuall ideas in SaaS pricing, (they made some changes recently) Coghead has been able to cover most of the goals. We think they have an strong pricing model (complexity is not such a big trouble for this kind of PaaS tool) that supporting their excelent flex-based tool, should help them in becoming a big player in the PaaS area.

Most of us use the cloud services without even knowing it. If you are using any internet service like Facebook or a smartphone app where you give out your information or upload your pictures and other information you are most probably using a cloud service. So, what is a cloud service? .Services offered by companies who store the information of various business organizations and even the information of an individual who uses the services of internet based companies like job websites, social networking websites and other services using data center, which is a centralized location for the storage, management and circulating data and information for a particular business.

Benefits of Cloud Computingfor Enterprises

Cloud computing provides enterprises with services in the form of software,platform and infrastructure. Cloud computing service providers make sure that your data is secure and is accessible to the authorized persons. One of the best benefit of cloud computing is that it provides scalability, so if you plan to grow your business you dont need to worry about the infrastructure to accommodate the workload. The employees of the enterprises can work from any location using the internet with their security access credentials. This makes enterprises to work more efficiently without worrying about the data loss due to power fluctuation or natural calamities. One of the biggest advantages of using cloud computing is that it is cost efficient. It lowers the company IT expenses and you dont need to worry about upgrading and maintaining the IT expenses on your own. It provides enterprises with unlimited storage space for their data

Drawbacks of Cloud Computing

Cloud computing is dependent on the internet connection. You need to have a fast internet connection to access the services. If you have intermittent internet connection or slow internet speed issues, you might want to fix them before switching to cloud services. One of the major concerns with the cloud services is the security. Storing the valuable company data using a third party cloud service provider puts the information at a great risk. Also the enterprise data is vulnerable to threats and attacks from hackers which hesitate some of the enterprises to switch to the cloud based services.

Effective ways to use Cloud Computing

Using Cloud service has both advantages and disadvantages based on the strategies implemented by the enterprises. An enterprise requires a Cloud service provider which ensures the security and scalability of the data. More importantly if the data can be migrated in the future, if the company decided to use the service from other cloud service providers. Enterprises need to choose a service provider that takes the security of the data seriously and updates their security sensors regularly to protect the information from the latest threats and hacks. All the data must be classified according to the importance of each section. All the data must be stored in correlating manner to prevent the data from being manipulated and avoid redundancy. But with more and more improvements in the cloud services, many Enterprises and mostly the startups are switching to cloud based services.

The economic and financial uncertainties several businesses face every day pose a variety of tactical challenges for the part of team managers. But there’s one tool that can help them deal with these challenges, and that is a thorough application of their strategic plans.

Strategy analysis is an advanced financial model offering executive management two main benefits. First, it puts in perspective the various ways in which companies can achieve their financial goals, and second, it ensures that the companies are able to maintain their competitive edge amidst the changing business landscape. A strategy analysis encompasses value-adding financial plans and strategic forecasting using the company’s previous and current financial statements. Strategy analysis is about looking at everything that’s going on in a business, company or organization. It generally focuses on these two questions:

What are the company’s business goals? What are the company’s current resources and how are they being used to achieve the company’s goals?

In broad strokes, strategy analysis takes a look at all aspects of business, dissecting each one to determine whether the company’s business strategies and its processes and procedures are in line with the company’s business goals.

The focus of strategy analysis is to determine whether the current strategies of the companies are still relevant given the changing business landscape. This is a recalibration of sorts, a process that allows companies to evaluate their performance and revise their strategies as necessary. Both internal and external factors are important in the analysis. Internal factors need to be analyzed to check if resources are prudently being utilized for streamlined processes and cost-efficient operations. External factors, on the other hand, need to be considered to check the competitive landscape and to identify potential business risks to prepare for. How It Adds Value to Companies

The results of strategy analysis make it possible for companies to improve their processes, maintain their competitive edge, and increase profitability. Doing an analysis of the company’s business strategies gives management a clear idea of where it is at present and how it can move forward in the coming months and years. The company’s existence is, in a way, justified by how it is faring in terms of its strategic goals. Sometimes, an outsider’s view of company performance vis–vis its business strategy is necessary. There are consultants who specialize in objective analysis of business strategies. These professionals are also able to give concrete recommendations or lead the management team in re-formulating or revising the company’s business strategies.

If you are looking for information on strategy analysis, click on the link. Or visit the website at http://www.quantum-group.co/.

Porters five forces of competition

Under this model, porter mentioned threats of new entrants who may be interested in the same

business. New entrants affect market share, thus reduce profitability and increase costs of

marketing (Porter, 2008). New entrants also pose a threat since they may introduce a different

entry strategy that is inconsistent with existing firms. New entrants also may redesign, marketing

routs parallel to existing ones, and thus creating market related conflicts. Porters also looked

at the power of suppliers in the model as key drivers of business profitability, because they

influence supplies like raw materials and other services needed by firms, in order to produce.

Pricing of raw materials and other services is vital in determining the price of the finished

product. Suppliers determine the level of input thus affect production related overhead. Another

aspect of competition in the porters framework is the bargaining power of customers. Porter

insists that, customers can mount pressure on the firm to adjust its prices downward, particularly

in a price sensitive environment. This also involves buyers choice and preferences as well as the

purchasing power of such buyers. Threats of substitutes are also another factor that determines

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firms’ competitiveness according to porters theory. Under this, Porter was concerned with

possible product substitutes that can provide alternatives to customers in the event of price

variations. This reduces market attractiveness thus reduces firm’s profitability. At the center of

all these, Porters model also dwelt on competitive rivalry as one of the key aspects of the five

forces of competition. The number and capability of the competitors, determine the level of

market attractiveness that may affect market penetration and profitability of firms (Porter, 2008).

Application of Porter’s five forces of competition

This model applies to our company in many ways. We have to consider that as our company

seeks market expansion, there is likelihood of new entrants in the industry coming on board. In

the event they produce similar products at a lower cost, customers are likely to switch to these

alternatives, which is likely to affect our market share. We have also to consider that using

external website may reduce our direct physical contacts to our renowned customers as much as

it provides an avenue for new customers. On the other hand the bargaining power of these new

buyers may also affect our prices in the new market much as our production costs may reduced

through online marketing. The company also needs to consider the existence of rival firms that

may target our best customers by providing lower prices for similar products. This is because

our rivals will be able to monitor our strategies on our website are likely to employ counter

tactics to our strategies. The power of suppliers should come into the picture when developing

these strategies because expansion of the market may increase demand for raw materials thus

mounting pressure on suppliers to supply more. The power of these suppliers to bargain for

supplies also determines the pricing aspect in the both existing and new markets. Suppliers may

also be forced to seek alternative sources of raw as demand increases. These may come with

extra costs of obtaining these raw materials, which is likely to be passed to our firm. Expansion

may also come with the introduction of new suppliers. These suppliers may have different

strength and bargaining power. Our company will also require some time to build mutual trust

and good working relationships in the event of new suppliers. The cost of switching from one

supplier to another may adversely affect our firms profitability. This should therefore be put into

consideration, thus strategies should

Generic strategies applicable to Adventure Works

As our company embarks on the development of this strategic plan, in relation to its operational

changes, there is a need for new strategies. This can include adopting relevant generic strategies

developed by porter, in our scenario, adopting a focus strategy is key in our new direction. The

company needs to focus on our existing customers and other potential customers in Europe and

develop contacts with them. Focus strategy will enable us to concentrate on a narrow customer

segment with an attempt to achieve cost advantage. However, we need to employ a focus

strategy with an element of cost leadership given that the firm indents to utilize online

marketing; for this reason, there is need to monitor the implication of this online system on our

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distribution costs. Online business provides two important advantages that include reaching a

wide number of potential customers and reduces barriers that affect business (Rainer, Kelly, and

Cegielski. 2012). This strategy best fits our specialized business that revolves around bikes and

metals. This company needs to capitalize on existing customers needs with whom it has already

built good relationship and mutual. There is need to strength our regional sales teams as we

embark on our new plan. This can be done through mapping of customers in every region and

customization our website based on regions to suit the already existing systems. The focus

strategy will enable our company to concentrate on a market niche that we understand most. This

strategy is possible because of already specialized venture in bicycle and metals. Our company

will be able to capitalize on the existing customers based on our brand loyalty. In this case, as we

broaden our market scope, we have to consider our market niche that we are quite familiar with

before penetrating any new market. We also need to bring something new in the mix that will

enhance the attractiveness of our product to customers. When applying the focus strategy, the

aspect of cost leadership will not pose a major challenge because our company will rely on our

website as a key marketing tool when targeting bicycle buyers. Relatively, the company will be

able to reduce cost of distribution through the utilization of online marketing. Cost reduction will

also be realized across the value chain through engagement of specialized suppliers and market

agents across our company. Superfluous Activities in the value chain within the target segment

will also be eliminated through focus strategy. Cost leadership will also be necessary at this

point of time because broadening market entails penetrating other competitive environment,

however, we need to concentrate on existing customers as per contact our list, in this case our

company needs to understand market dynamics including the bargaining power of suppliers and

buyers before the aspect of cost leadership is prioritized. Much as other strategies like

differentiation may create brand loyalty in the market by reducing oversensitivity of customers

on prices, we have to consider that the company already has the best customers that it entails to

concentrate on during its expansion. The newly acquired Importadores Neptuno in Mexico,

provides a framework upon which networking and mapping of potential customers can easily

be achieved through our regional sales team. The focus strategy will be right for our company

to sustain and satisfy already existing customers, we shall also be able to clearly segment our

products in the new geographical regions in relation to renowned customer. Focus strategy is

built on the concept of serving a defined group of customer nitch exactly what our company

should look forward to achieve. Also to note is that focus strategy can help achieve

differentiation as well as the low cost advantage within a narrow market. The focus strategy will

also echo well with this company because of the understanding of customers unique needs and

market dynamics. This is because we have all along served our customers uniquely well,

according to the feedback we get from the hem.

Implementation Tactics

One of the most effective tactic we can use to achieve this is timing tactics. Douglas, John and

Essam (2012), p. 130 noted that moving earlier than competitors to introduce and sell new

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product or model makes an organization first mover while others will be early followers. While

we employ time tactics we must consider our resources, capabilities and competences. The

driving force in timing tactic is considering a market share as organization goal. OShaughnessy,

(1995), established that by using market share as a goal, a company either intends to protect its

market share or advance its market share. By use of a timing tactic, our firm will be able move

before competition, move with competition and move away from competition as provided by

OShaughnessy (1995) in his competitive timing direct matrix. Effectiveness of time strategy

will be determined by how we choose and prioritize our goals. Setting implementation goals

in terms of long term and short term will enable us to evaluate the progress and development

intervention approaches where necessary. This involves setting targets in relation to our current

position in the market and time of achieving these goals for evaluation purposes.

The competitive position tactic will also be key in the implementation of this strategic plan. We

need to position our initiative as market leader who will be followed by other competitors by

virtue of our customer base and their loyalty across our regional markets. More significant is

our level of technology that includes reaching our extensive markets through our website. The

competitive position tactic will make our competitors more of followers. Taking up competitive

approach will mean that, our company defends its position as market leaders within our

market scope through customer defensive tactics. It is good to understand that our expansion

majorly focuses on existing customers, thus losing even one of them will be detrimental to our

strategy. Douglas, et al.p. 134 noted that leaders are always vulnerable to attackers. In this

case, positioning ourselves as market leaders need the adoption of defensive tactics. Defensive

tactics entail to reduce the possibility of attack and reduce threat attacks to an acceptable

standard (Porter 1985b). One of the ways is protecting current market share through position

defense tactic by building fortification around our current position. By focusing our attention

on this strategic plan, our company will be able to position and maintain itself as leading firm in

manufacture and sole distributor of bicycles.

I will be glad to be part of the team that will oversee the smooth implementation of this strategic

plan when in place, and will always be available in case you need any of my input.