Bet big, stay focused

This is a new era and it requires new managerial responses

THE PAST IS THE PAST: it is there for us to reflect on and learn from, but we can only live in the now and prepare for the future. Objects in the rear-view mirror hold many lessons and many experiences, but objects in the road ahead and the route that we choose will define our future and ultimately who and what we will become.

Most of us celebrate and value technology. And, yes, sometimes we curse it. But it is certain that when wielded effectively, it has remarkable power. On a worldwide basis, IT spending continues to grow in developing countries. One-third of IT spending now occurs outside of North America, Western Europe, and Japan. These developments are creating innovation in IT, many new competitors, and new usage patterns.

Markets are complex. Aside from fundamental metrics like market size and key buyer demographics, there are the many changing and conflicting forces of competition, market maturity, buying trends, geography, and channel realities. Mapping these dimensions is the foundation of today's entire marketing strategy.

About 65 per cent of IBM's revenue comes from outside the United States, including 22 per cent from red-hot emerging economies. While IBM does rely heavily on the business of financial service companies, it is noteworthy that 75 per cent of its financial services sales are non-domestic and most of that is from recurring contracts that provide ongoing revenue streams.

In many cases, constraints on sales growth in domestic markets have pushed companies to expand abroad. Growth prospects in Australia may be limited due to a number of factors, including market saturation, excessive competition, and, yes, even the 'R' word. Demand pull, especially in countries such as the US, market size, and growth prospects act as powerful incentives to internationalise.

The advances of IT have also been an impetus to the ongoing wave of strategic alliance and merger activity. Hardly a week goes by without the announcement of another deal. Many of these combinations arise directly from the opportunities created by new technology offerings in different countries where many are trying to replicate a workable and desirable version of Silicon Valley.

There will generally be two types of leaders -- technology leaders and market leaders. The technology leaders will nearly always be the smaller companies that often don't have the baggage of past successes but are niche-oriented, well focused, and able to develop new technology areas. The market leaders will be the large vendors that are able to grow with the changes and have international distribution capabilities. This transition means markets will become much more globalised.

This is a new era that requires a new breed of leaders with a global view of change and able to adapt quickly. Successful new market entry depends on a company's ability to match its capabilities to the requirements of new customers wherever they may be.

Len Rust is publisher of The Rust Report.

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