CHAPTER TWO - METHODOLOGY
Review of relevant literature
Reviewing literatures plays a vital in this research study as it can integrate informative means of understanding strategic and marketing management of software business expansion in China. The need to have basis on several frameworks and matrix that are ideal for presenting in effective grounds of secondary research from wherein applications are important and essential for realizing goals and objectives for execution purposes. This literature review will be divided in several sub headings that deals with software business industry in Chinese context and assimilation.
Software Industry – Case of China
The Chinese software industry barely existed before the 1990s. The Institute of Computing Technology at the Chinese Academy of Sciences built China’s first computer in 1958. However the government devoted most of its financial resources and limited pool of skilled labor to reverse engineering key hardware such as integrated circuits and technologies with mixed military and civilian importance. There were scattered software development projects in state-owned research institutes, but commercial research and development can be non-existent because of the organizational and institutional barriers separating the research institutes from the market. Chinese programmers at the Institute of Software at the Chinese Academy of Sciences and other research institutes also began to develop simple information systems, typically by directly manipulating a database for a limited set of functions such as searching and reporting the ability to update information interactively[carolc1] . These systems were developed separately for particular end-users and little attention was given to integration or overall design.
One of the difficulties in China is the concepts of Standardization
Management-oriented business publications discuss standardization in relation to product standards or formal agreements, such as promoted by the International Organization for Standardization (ISO). For example, Bowles (1992, p. 142) defines standards as: “formal agreements that define the contractual, functional, and technical requirements to ensure that a product, service, process or system does what it is supposed to do”. Alternatively, Dilworth (1996, p. 99) understands standardization as: “having fewer choices of components and products that must be produced the use of common components in multiple models of product. Thus, Levitt (1983, p. 94) indicated, “the most effective world competitors incorporate...the same kind of products sold at home or in the largest export markets.” In other words, standardization should be seen as process that involves the creation of a standard to be applied rather than the creation of standard to be achieved.
The software industry has matured into a global business with software products and applications growing in number, complexity, and market importance. Global sourcing and software production and operations sharing are becoming the industry standard. At the same time, the marketplace has become less tolerant of poor-quality products and hidden maintenance costs. Reviews various existing standards and frameworks and discusses the massive consolidation and coordination efforts currently ongoing for the purpose of developing international quality standards. Warns that becoming ISO 9000 registered is only the first step to achieving consistent software quality.
Software quality problems
Achieving quality software is a somewhat elusive goal. Most people base their estimates of a product’s quality on its functionality and the appearance of user interface. However, there are other attributes of a software product besides functionality. Testability is the measure of difficulty in testing a product. Portability is the measure of effort required to modify and test a product to allow that product to run in an environment other than the one for which it was developed. Extensibility refers to the ease of enhancing the product, and maintainability is more narrowly focused on updating the product to deal with bugs in the system. All of these attributes taken as a whole determine the quality of a software product.
Software programmers and development teams rarely achieve their objectives for all of these attributes, and they often miss their deadlines and cost targets. A study focused on meeting deadlines in software projects in Germany revealed that 60 percent of the projects investigated were more than 20 percent behind time, while only 5 percent were completed on time (Eversheim et al., 1997, p. 288). Studies demonstrate that maintenance and debugging costs often make up 60 percent or more of the total development costs for a software product (Eversheim et al., 1997, p. 288). In recent years, software has increasingly become a critical component in products in the consumer and capital goods industries. More and more products contain multiple software components, on which they depend for many of their functions. In addition, software has come to play an important role in many service industries such as the banking and insurance industries.
Current development of international software standardsStandards are documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics, to ensure that materials, products, processes and services are fit for their purpose. The emergence of a global market has caused firms to seek uniform standards to reduce the costs of transacting business with various customers as well as suppliers. International standards thus contribute to increasing the reliability and effectiveness of the products and services we use and produce. International standardization also plays an important role in trade, commerce and technology transfer within, and between, countries. ISO 9000 can be effectively adapted for use in the software industry. In fact, ISO 9000-3 was published by the International Organization of Standardization in 1991 as a guideline for the application of ISO 9001 to the development, supply and maintenance of software. Nevertheless, there are some profound differences between ISO 9000-3 and good general software practices (Oskarsson and Glass, 1996). ISO 9000-3 defines only a limited set of requirements for quality software development methodologies, which means that companies need to search for additional sources of information in order to develop a complete methodology.
More Information Pointing China
Most of sales regarding China's leading domestic software firms are in this business as several reasons can be:
- Low user sophistication and strong desire to integrate software with their product creating strong pressure to become not just producer of particular piece of software, like Enterprise Resource Planning (ERP), provide services allowing systems integration
- Extreme levels of piracy make it difficult to develop products, while services, including mix of hardware and software do not face similar piracy risk
- Software business such as not advance in some IT capability as certain suppliers often use systems integration work as an entry point for software development.
China's policy toward foreign direct investment (FDI) is reviewed and the volume, sources, geographic distribution and composition of FDI are analyzed. It is found that FDI has been positively associated with economic growth, and the increase of total fixed asset investment in China. Foreign direct investment have forced an increasing number of domestic manufacturers to compete globally. It has also been associated with phenomena such as accelerating uneven development between the coastal and inland provinces, worsening income distribution, declining ideological commitment. While the opening of the Chinese economy to FDI is still an ongoing process, positive stimulating effects of foreign direct investment in China are observed, and these are found to contribute toward the success of its recent economic reforms. Much has been made of the importance of emerging markets and transition economies as the future of the software industry as why Chinese markets are proving attractive to Foreign Direct Investment examining theories of internationalization and drawing on key FDI data as well as transition economies of China and assesses whether government should continue to support Software expansion industry as part of development process. There has been a high degree of FDI that makes the decisions will depend on the parent company and government officials still play a very important role in procurement process and bride Clone, source code stealing are very common in China as well as high localized requirements The attraction of foreign direct investment is key economic development strategy for China as with FDI becoming more prevalent in Software business service sectors, example of non-market based investment in the computer services and China’s software sector. Although the emergence of offshore data processing and programming are well chronicled, as software becomes increasingly standardized, international divisions of labor are also developing within the leading producers of standardized software packages. Diskeeper Corporation can possibly establish software domains from which there manufacture and localize software products for the Chinese market. There would appear that while the promotional evidence and data may exaggerate the strategic importance of Chinese software industry, the nature of FDI in software industry is of higher quality than previous rounds of FDI in the region. The Chinese government has assisted software industry in more ways such as, it helped realize the model represented by Great Wall: that of allowing a state-run computer company to become privatized as a successful PC maker. The Chinese government had influence on the software industry by sponsorship of national research efforts on “core technologies” deemed essential to the nation’s computer industry. Some examples include various large-scale government-funded projects dedicated to developing Chinese competence in core computer technologies (Lovelock et al., 1997). The Chinese government developed many of the same policies for the
software industry, but much support has been along the lines of infrastructure provision, incentives and provision of skills, Chinese government appears to be trying to avoid getting into the industry directly, and is simply seeking to foster basic conditions for industrial formation.
[carolc2]
In addition to competitors, foreigner suppliers are important, especially in what concerns ‘pure’ development work. Of top firms in China doing software, dominance stems from higher product quality and scale economies (IDC, 2001). Furthermore, Microsoft, IBM, Oracle and some others dominate the market. Foreign companies pay high salaries[carolc3] , enabling them to attract top talent (Wright, 2002).
How about Linux?
Linux exemplifies how software development and appropriation of economic returns can be decoupled from the control of one firm, and instead rely on the actions of many, distributed computer programmers. At the same time, Linux is an example where one set of knowledge software gains in popularity and in number of users, this may attract people interested in
appropriate benefits according to the hybrid business model. In short, they have begun to offer a choice to users. Unlike the examples of Microsoft and Netscape, Linux is not one firm. It is instead an operating system, now based on open-source software, which has developed through network. The Linux operating system is called the Linux kernel. As with Microsoft’s operating system, the Linux kernel is a sort of translator down to the ones and zeros of the computer language as well as a platform for running different applications. For Linux,
there are official and test versions of the kernel as well as patches improvements, which can be added onto the kernels to make them work better. The test versions are like beta versions release by commercial companies,
as discussed above under the Microsoft example. One individual wrote the initial source code which forms the core of the Linux operating system, but
further software development has been structured through a network, or community, of software programmers. Linux was attracting relatively many expert user/developers who thought it was a good operating system and were willing to develop it further. The concept of ”open source” software, with specific rules of conduct, was proposed to unite the various licenses for free software (PC+ 1999). These rules and certification were also self-organized and developed over the web by computer programmers. The following nine conditions for certification set some boundaries which will influence how and why invention and
innovation in open source software will differ from commercial software: Free redistribution, without restrictions or fees. Program must include, and allow distribution, in source code as well as compiled form. License must not be specific to a product, e.g. dependent on being part of a software distribution, license must not contaminate other software, e.g. must not demand that all other software is also open source.
And why Microsoft can penetrate the market so well. it should be good point to elaborate
The most important event for Microsoft’s software probably came the firm was
incorporated, because IBM introduced its personal computer (PC) as the American market and the installed base of IBM PCs and clones grew rapidly, which meant that this software market would also grow rapidly. ”The enormous size of the personal computer market created unprecedented scale and profit
opportunities” (Steinmueller 1996, 34). Microsoft got crucial market leader opportunity in PC software, when IBM endorsed its PC-DOS operating system as the standard, then later Windows. Microsoft was quick to act upon this, becoming the dominate supplier of PC operating systems. Microsoft’s operating systems has in turn often been sold with a package of other applications and also pre-installed on hardware. Over time, Microsoft successfully created a mass market bundle of programs around their core operating system, which has been
attractive for large numbers of users. Strategies for, and competition over, that bundle has changed over time. For example, Microsoft recognized the value of images on the PC start-up screen and desktop. They have been accused of going to extreme measures to keep their programs pre-installed and to keep their trademark image on the start-up screen, through threats to hardware vendors. The firm has, however, also made mistakes in trying to decide which areas
will be of economic value in the future, and sometimes has been an imitator rather than a leader. Microsoft gave away its Internet Explorer for ’free’, or as part of the package. The challenge at the time lay in a combination of Netscape’s browser with the workstation company Sun’s Java language. The idea was
that NCs could actively use programs found on the web and based on Java rather than relying on installed software in PCs (Economist 1996). Microsoft’s core market for standardized, mass market software bundles for the PC. People would no longer need to buy these products nor would the operating system be the foundation software necessary for the whole bundle.
China is encouraging their government agencies to use "open source"
software developed by communities of programmers who distribute the code
without charge and donate their labor to cooperatively debug, modify and otherwise improve the software. The best known is Linux, a computer operating system that Microsoft now regards as the leading competitive threat to its lucrative Windows franchise in the market for software that runs computer servers. The foremost corporate champion of Linux is I.B.M., which is working with many governments on Linux projects. Microsoft worries that some governments may all but require the use of Linux for their powerful servers, which provide data to large networks of computer users. For the most part, the battle does not involve the kind of software that runs on the typical
computer user's desk.Microsoft's new business-oriented operating system, in China last spring. Unlike the Windows source code, which Microsoft keeps secret, the Linux code is open for all to see and is freely distributed with the stipulation that anybody can improve it as long as any modifications are shared with the rest of the world. The almost communistic "from each according to his ability, to each according to his need" approach appeals to China's Marxist
leaders. Despite the government's stand, no one is suggesting that Microsoft is finished in China. Though it will not provide specific sales figures, the company says its software sales in China surged 80 percent last year and continue to grow. The turning point in Microsoft's image was the introduction of its Chinese-language Windows 95 operating system, which was programmed to display references to "Communist bandits" and to exhort users to "take back the mainland." Beijing, infuriated to learn that Microsoft had used computer programmers in Taiwan to write the software, demanded that the company hire mainland programmers to fix it.
How about the story of A330 assembly in TianJian that can tell why Boeing fails in China from year to year but Airbus wins
Airbus launched its first model A300, the world’s first twin-engine wide-body passenger jet. Following Boeing’s lead in offering aircraft families sharing common features, Airbus launched A310 in early 1980s, a stretched version of the A300. With the A300/A310 family, Airbus gradually established its reputation for innovation and leadership in extending usage of composites to secondary and, later, to primary structures10. In the mid 1980s, Airbus launched the A320, a single-aisle aircraft with 150-seat capacity. The A320 was a huge commercial success for Airbus and with more than 2500 deliveries till today, the A320 family still brings in more than half of Airbus’ total sales revenues. One of the most important features contributing to the A320’s success is the introduction of “fly-by-wire” technology. This innovation enabled the pilot to maneuver the aircraft using a side-stick control, reduced the weight of the aircraft, and increased fuel-efficiency. Most importantly, this innovation allowed Airbus to introduce the concept of “commonality” different aircraft platforms sharing the same features, such as using the same cockpit design within the same family or across different families. The A350, which started as a modified A330 and more recently has come under some criticism by customers, is being re-designed and, having fallen behind by about three years, One country that truly understands the importance of off sets is China. By pitting Boeing and Airbus against one another for sales of aircraft, the country has secured the transfer of technology and production by U.S. and European aerospace companies and taken a great leap forward in developing an aerospace industry of its own. Boeing has signed hundreds of millions of dollars of supplier contracts with China’s aviation industry, while Airbus, in addition to entering into supplier contracts, has announced the establishment of an assembly facility for the Airbus A-320 in China.
Chinese software industry still consists of too many small companies as because of to the earlier stage of growth in the local industry as well as the fact that they have not yet mastered the art of managing growth in technical capability and process. The strategic marketing industry is evolving, especially in: the use of superior knowledge of the Chinese business practices and preferential purchasing practices by domestic government, for example UFSoft and Kingdee have come to dominate 60% of China's accounting software market and are increasingly the market for enterprise resource management software (Saxenian, 2003), critical challenge will be the ability of firms to specialize and deepen their knowledge in particular areas.
Industry structure
Given the rapid growth of the markets for software products and services in China since the late 1990s and the policies introduced since 2000, there has been high rate of growth in new entrants into the industry while, at the same time, group of Chinese software firms with established reputation have become relatively large. Thus, domestic Chinese software and systems integration firms with an annual income in 2002 of more than 500 million RMB Yuan represented 0.8 per cent of all firms in the sector, while those with annual revenue less than 10 million RMB Yuan constituted 75 per cent. The proportion of software and systems integration firms that earned a revenue larger than 10 million RMB Yuan in 2002 formed almost 25 per cent of firms in the sector, a clear improvement compared to 2001 (CSIA, 2003 p. 96-97). In other words, although a group of Chinese domestic software firms had become reasonably large, the majority are very small. Although some specialized small new ventures may have a considerable competence and may be expected to expand their capabilities quickly in growing domestic markets (Tschang and Xue, 2003 p. 31), observers have lamented the weak technological status and capabilities of the greater part of small software firms in China.
Software Industry: Chinese Perspective
According China Software Industry Association (2002), “China has 5700 software companies of which 70 percent employ less than 50 employees each and further 20% employ only 100 to 500 employees as only 50 companies have more than 1000 employees. As for revenue, most of these earn less than $10 million and only 18 companies make above $50 million”. International software companies dominate most of the China software product markets. Some of policy initiatives that have been so successful in the realm of manufacturing have been applied to the software industry. Preferential taxation and special zoning arrangements, including high tech parks to attract domestic and foreign investors, have sprung up. The Chinese Government believes there are three problems that currently hamper the software industry and it has devised three key policy initiatives for addressing each in turn. There is also an expansion in IT training: recently, Microsoft, IBM and some Indian IT training firms have invested heavily in IT as the supply of new IT professionals should cease to be an issue after 2004. China may be able to compete with India in terms of cost, but it lags well behind India when it comes to quality (Amoribieta et al., 2001). The government believes that this problem will be partly addressed by its education and training measures, but its major initiative is to encourage firms to seek quality certification by means of an incentive refunding plan. According to Orbys Consulting, the average contract size of an offshore outsourcing is $7.2 million and the average contract duration is 3.3 years, which works out at $2.18 million per year (ComputerWire, 2001). However, the average revenue of a Chinese software company is less than $600 000 (China Software Industry Association, 2002). China identify software as critical industry that is essential to economic progress and national security, hence deserving of government promotion, along with more established industries such as computer manufacturing as well as telecommunications. There are unique opportunities in developing application software and embedded software for the sophisticated IT capabilities that have developed in China, including the recent expansion of IC and high end laptop manufacturing. Chinese companies are rapidly expanding foreign connections in part to enhance management and process capabilities.
Some Roles of Diskeeper
While locals may see presence of competing multinationals as negative, it is actually a sign of development of the local market. This is clearly the case in Diskeeper where there sellers of packaged software and high level consulting services. In China, the market is growing rapidly across many sectors, but much work is still systems integration, involving a large hardware component, and a smaller but growing software and services component. In China, the local market in certain sectors is largely dominated by foreign multinationals at the top end such as complex enterprise software, while in other sectors such as telecoms and transportation infrastructure, the domestic firms tend to focus on systems integration involving custom software and packaged software. Many small and medium sized Chinese firms also service the small and medium enterprises market with either custom or packaged software, often coupled with a lot of services. While no definite trend exists at the moment, the nature of the market in each of the nations may dictate which multinationals move there their software
development activities. So, it is likely that one will find software development for
manufacturing migrating to China; pure software development activities may have a bias because of its current image in the international market where it already possesses a strong base, but it may me at a disadvantage in the others.
Focus on Product
Significant number of firms known to have better capabilities and business models are product focused although the role of multinationals in China should not be marginalized as multinationals have not had a great impact on domestic Chinese firms, either in terms of employee experience or training, or by being clients for the firms. The biggest impact appears to be in terms of competition at the high end of products and services, with multinationals having secured about two-thirds of the domestic products market. Some aspects of the Chinese economy are expected to have positive influences on the industry’s growth, such as the strong manufacturing sector, which uses software in many products even beyond computer equipment, for instance, telecommunications equipment, consumer electronic products, automated machinery (CSIA, 2000).
Product Marketing Capability
China’s markets for software in different provinces are quite fragmented and difficult to break into, given the different standards across provinces. Existing relationships between firms local to those provinces and their customers or institutions may also form barriers to entry for other firms. In order to market and expand nationally, software firms have had to adopt different techniques in these conditions. There appear to be at least two ways to market products in China: through product branding, and through relationship sales. Some Chinese product firms have managed to establish themselves with strong domestic brands in specific sectors that have not rely on marketing method.
Capability as a Differentiator in the Marketplace
The deepening of technological or other forms of capability is one way in which
stronger companies differentiate themselves from their weaker rivals. There are many small, weak companies in China which compete on cost alone, and in a competitive market, these can make it difficult for the better companies to climb out of the pack. Diskeeper have tried to move to more technological sophisticated products at the higher end, so as not to compete with the many smaller companies who could not compete at that level, but this can prove difficult without the right skilled manpower or if the market does not support the move.
Critical selection of key methods and insights
There implies to strategic management and marketing management that relates to expansion of software business in greater China with a special case to Diskeeper Corporation initializing how the corporation expands their business successfully in China. Discussion and awareness for effective strategic management and marketing management for software business expansion at greater China and utilize a one ideal blueprint that brings in strategic marketing ways on the core paradigm as the research will cater more on analysis rather than mere description of what is software industry/business and other related points. Diskeeper Corporation as to how they can successfully expand their business operations in greater China, allowing internal and external environment analysis is of a crucial factor that astounds to a positive outcome of strategic and marketing formation into an effective assimilation. The presence of adequate marketing information comprises internal and external issues and includes estimates of sales potential and assessments of the cost effectiveness of various marketing expenditures.
The research identifies marketing challenges small software firms face during their growth and internationalization processes. It starts with an analysis of Diskeeper software company activities along continuum from strategic business’ to ‘market driven business management. The brief analysis of Diskeeper in strategic marketing, in which there is paradigm shift from notion of marketing mix management towards strategic centered marketing as needed along such framework for identifying major marketing challenges facing Diskeeper software company in the present millennium. Through this dissertation, there has been showing of research focus and presenting some parts of research areas which are to be tackled in such strategic market based environment. The main argument is that Diskeeper management style and organizational structure determines a significant extent of the known process and nature of effective strategic marketing tools as being envisaged under certain perspective from within market structure and culture.
Example discussion of strategic marketing tools that Diskeeper can utilize
Diskeeper to use and apply 7S Framework in such ways that the framework have to devise such strategy, but Diskeeper have to be able to implement it if it's to do any good. The need to take account of the seven of factors to be sure of successful implementation of Diskeeper strategy, and the relative importance of each factor will vary over time, and Diskeeper can't always tell how that's changing. The 7S Framework is useful way of checking that Diskeeper have covered important bases.
The Seven Factors that Diskeeper will have to consider can be :
Strategy
A set of actions that Diskeeper start with and must maintain
Structure
How Diskeeper people and tasks or work are organized
Systems
All Diskeeper processes and information flows that link the Diskeeper together
Style
How Diskeeper managers behave
Staff
How Diskeeper develop managers in current and future time
Superordinate Goals
Longer-term Diskeeper vision, values stuff, that shapes the destiny of Diskeeper
Skills
Dominant attributes or capabilities that exist in Diskeeper
There is more on 7S framework, especially how Diskeeper applies it in practice. It may appear as an outmoded concept in today's environment of "constant change and learning", but the basic principle that Diskeeper got to watch a lot of factors all the time as Diskeeper implement any strategy still applies. Diskeeper can assume management of their value chain as one effective source of Diskeeper success in strategic market business that links to enterprise resource planning and based from below diagram Diskeeper can adjust value chain and analyze them according to the points presented.
The above value chain assumes a distribution channel between Diskeeper manufacturers and its internal departments, Diskeeper manufacturers and its dealers, distributors and retailers network, Diskeeper manufacturer and its materials logistics network. Aside, Diskeeper manufacturer and its raw material provider suppliers network then, Diskeeper manufacturing company and its sales force, also customer support network. Linking customers of the Diskeeper presenting in better software expansion in China. Diskeeper upon integrating value chain managing the information about product flow from suppliers to end users to reduce defects and inventories, speed time to market and improve Diskeeper customer satisfaction. Diskeeper can use branch automation software to access their data from various locations and can use various softwares for different purpose and use data solution to access data from Diskeeper web server database and use in local Diskeeper software. Now that Diskeeper has begun to focus on the value chain as way to improve their strategic market position, the inevitable result has been the evolution of technology to help Diskeeper effectively accomplish marketing based tasks.
Today, value chain software is making its way into Diskeeper and helping the businesses boost their profitability. Diskeeper to adopt software to help with every step of the chain through software, like CAD for engineering, and demand planning technology will begin helping Diskeeper business to develop better products that has been effectively meet the needs of loyal buyers. Furthermore, online purchasing, warehouse management systems, as well as enterprise resource planning have helped Diskeeper efficiently get the goods they need, control their inventory, manage Diskeeper manufacturing process so that costs are reduced and production cycles at Diskeeper are faster. A number of other types of value chain software are available and are being used by manufacturing firms. Customer relationship management, electronic data interchange, financial management systems are effective popular options that have been adopted by Diskeeper as these technologies allow for improved internal and external communication, fewer human errors, superior business performance of the software business and give Diskeeper competitive advantage in the market. However, Diskeeper goes to adopt any value chain software need to realize that picking the right technology is critical for their success. Choosing that software means giving serious consideration to the needs and plans of Diskeeper business, plus analyzing Diskeeper's process to identify where value can actually be added and where significant profit can be produced.
Diskeeper can end up spending large sums of money to implement new technologies that may offer some improvements in business performance but which may not generate enough supplemental revenue to cover Diskeeper’s initial expense. Also, Diskeeper which plans to roll out several new value chain software items either simultaneously need to make sure that technology will work together effectively. Incompatible programs will require Diskeeper money and more hassle for the company, its IT staff, its employees for improving software business. The adopting of value chain software is becoming optional in Diskeeper's competitive, strategic driven markets. To have any type of advantage in the software industry, Diskeeper must take the next step and figure out ways to add value to Diskeeper products and services, and Diskeeper signal need for expansion business to do the same in research and development field.
In addition, staying competitive is only one of the benefits of adopting value chain software, these programs do produce additional profitability for Diskeeper for instance, and manufacturers have found that manufacturing resource planning software has boosted Diskeeper profits as management systems have allowed Diskeeper to make more money and drive in Diskeeper towards the adoption of value chain software. The success of China software business depends not just on the program but on how well it fits into the Diskeeper's picture. Thus, careful analysis and planning can allow Diskeeper business to make the most of software expansion and to secure strategic market place even those are linked in tight market structures.
Review of previous applications of key methods
The 7S framework can be used in variety of situations where an alignment perspective is useful like to help Diskeeper:
- Improve their software business operations and performance
- Examine the likely effects of future changes within Diskeeper company.
- Align Diskeeper departments and processes during such merger and acquisition if present
- Determine how best to implement Diskeeper strategic options
McKinsey 7S model can be applied to elements of Diskeeper team as alignment issues apply, regardless of how Diskeeper decide to define the scope of the areas into the research study. The 7S model involves seven interdependent factors which are categorized as Hard element, easier to define or identify and management can directly influence Diskeeper in formal processes and IT systems. Soft element can be more difficult to describe, less tangible and more influenced by software culture and are as important if Diskeeper strategic marketing management will be going to be successful. The model is based on the theory that, for Diskeeper to perform well, elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve Diskeeper performance, maintain alignment during other types of change.
SPACE framework
The SPACE framework does exist upon placing shared value that emphasize Diskeeper values central to the development of some other critical elements. Diskeeper's structure, strategy, systems, style, staff and skills all stem from why Diskeeper were being created, what software business stands for. The Diskeeper visions are formed from the values of the creators and Diskeeper value changes along with several models. Diskeeper can use the SPACE framework to help analyze the current situation, proposed future situation and to identify gaps and inconsistencies between Diskeeper ways and ensure that Diskeeper works effectively from desired strategic marketing endpoint. The 7S model is good framework to help Diskeeper ask the right questions but won't give Diskeeper every answer needed. For that Diskeeper will need to bring right knowledge, skills and experience.
Value Chain analysis
Value Chain Analysis involves identifying top level process areas of Diskeeper and mapping Diskeeper as user of effective value chain. The value chain illustrate series of top level processes Diskeeper uses to take input from the strategic market, transform inputs, and then deliver value added products and/or services back to the market within better profit as the process is synergistic in nature, justifying Diskeeper profit margin. The value chain is modeled in terms of primary and support activities. Primary activities feature in the value chain itself. They are the processes responsible for engaging with Diskeeper market and directly transforming inputs into outputs. A primary activity must only contain at least one process that contributes to Diskeeper value chain also have multiple value chains and may arise where Diskeeper serves more than one market. Different strategic markets may be served with fundamentally different processes within the organization. The value chain depicts an end process that executes left to right. Diskeeper marketing sits of value chain because the business must determine what products it is going to offer before doing anything else. Then, the software expansion business is in good position to start selling services and products to customers. Diskeeper value chain give functional model of software industry in China and model the functions Diskeeper performs without consideration for how Diskeeper performed such market stability as illustrated below.
As lower level processes change within Diskeeper, so may the roles and responsibilities and by extension Diskeeper structure. This is further evidence of why Diskeeper should model capabilities around business functions rather than organisational structure as it provide considerable stable model. Diskeeper value chain has forced strategic marketing of software industry to consider the business in holistic and process centric way impeding an excellent tool for identifying Diskeeper top level process centric business capabilities that Diskeeper can then use to define business service model.[carolc4]
Any example on how it relates particularly to Chinese market ?
Value chains and business models
A systematic approach to identifying architectures for business models can be based on value chain deconstruction and construction that is identifying value chain elements, and identifying possible ways of integrating information along the chain. It also takes into account the possible creation of electronic markets, approach remains useful in order to identify effective business service models.
E-shop
This is Web marketing of company or a shop. In first instance this is done to promote the company and its goods or services. Increasingly added is the possibility to order and possibly to pay, often combined with traditional marketing channels. Benefits sought for the company are increased demand, a low-cost
route to global presence, and cost-reduction of promotion and sales. Benefits for the customers can be lower prices compared to the traditional offer, wider choice, better information, and convenience of selecting, buying and delivery, including 24-hour availability.
E-procurement
This is electronic tendering and procurement of goods and services. Large companies or public authorities implement some form of e-procurement on the Web. Benefits sought are to have a wider choice of suppliers which is expected to lead to lower cost, better quality, improved delivery, reduced cost of procurement. Electronic negotiation and contracting and possibly collaborative work in specification can further enhance time- and cost saving and convenience.
Third-party marketplace
This is an emerging model that is suitable in case companies wish to leave the Web marketing to 3rd party, offers at least user interface to the suppliers’ product catalogues. Several additional features like branding, payment, logistics, ordering, and ultimately the full scale of secure transactions are added to 3rd party marketplaces. An example for business-to-consumers is to provide a common marketing around a special one-off event profiled by well-known brand names. ISPs may be interested in this model for business-to-business, using their Web builder expertise. However, it may equally appeal to banks or other value chain service providers. Revenues can be generated on the basis of stored in a retrieval system, or transmitted in any form.
Value-chain service provider and collaboration platform
Specialize on a specific function for the value chain, such as electronic payments or logistics, with the intention to make that into their distinct competitive advantage. Banks for example have been positioning themselves as such since long, but may find new opportunities using networks. New approaches are also emerging in production/stock management where the specialized expertise needed to analyze and fine-tune production is offered by new intermediaries. A fee- or percentage based scheme is the basis for revenues. There provide a set of tools and an information environment for collaboration between enterprises. This can focus on specific functions, such as collaborative design and engineering, or in providing project support with a virtual team of consultants. Business opportunities are in managing the platform
The Boston Consulting Group Strategic Environment Matrix
There axis shows the market share relative to the industry leader which is always the leftmost circle. The other axis shows market growth rate for the industry. A circle is drawn for each competitor. The size of each circle represents that Diskeeper's dominance. The expert system will position Diskeeper enterprise on the chart based upon the description of share of market, condition of the market as Diskeeper can trace through the supporting analysis and its conclusions, adjusting Diskeeper input until Diskeeper are satisfied with description accurately characterizes Diskeeper enterprise.
The Ansoff Matrix
Ansoff's Matrix in Ghemawat, P. (1999). Strategy and the Business Landscape. Addison Wesley Longman Incorporated
The above matrix shows what product and market strategy will be needed to achieve the strategies of software business adhering to Diskeeper as in order to make Diskeeper products more open and customizable considerable strategic market development will be necessary. Diskeeper’s market strategy which involves effectively developing an operating system for the internet falls under new market and new product and will mean that software will be set of components distributed over the internet that are platform by Diskeeper and if the latter does not adhere to effective market management and strategy then, there may come such considerable software expansion threat. Diskeeper’s ability to position itself in a certain way to achieve competitive advantage it also has certain resources which it should leverage in order to achieve and sustain its competitive advantage. Diskeeper specific resources such as the significant number of knowledge bases built up by Diskeeper of Research and Development is not easily transferable and this would tend to increase the sustainability of their competitive advantage to which the value appropriated by Diskeeper will have right amount of strategic market potential as available in the growing business and that Diskeeper’s effective marketing tools base are ideal. Scope and limitations The scope of research is evident from the key points discussed above and that it presents in several frameworks, analysis and matrix that are ideal upon noting in effective strategic and marketing management for software business expansion, case directed and linked for Diskeeper from within case study approach is duly served and accounted in research. The scope deals to several market environment based tools as noted in the latter headings of this dissertation. The limitations of the study is deemed at combining secondary research through articles, journals and certain case links pertaining to the software business posits that Diskeeper company holds. Also, limiting to the analysis that integrates strategic markets in value of tool based analysis sanctions such as for example, Value Chain Analysis, 7S framework and others aside, with case finding limitations centering on reliable information that places in ample discussion and assessment of strategic management and marketing in grounding basis of models, frameworks as put into Diskeeper application and research content process along with some studies presented by such proponents.
References
Amoribieta, I., Bhaumik, K., Kanakamedala, K. and Parkhe, A.D. (2001) Programmers abroad: a primer on offshore software development. The McKinsey Quarterly, 2, 129–39
China Software Industry Association (2002) Current Status and Trends (China Software Industry Association, Beijing).
China Software Industry Association (2000) Annual Report of China Software Industry, Beijing, 2001
ComputerWire (2001) Offshore economies drive market. Computer Finance, 7, 13–16.
CSIA (2003). Annual Report of China Software Industry, 2002-200 Beijing: Zhongguo, China Software Industry Association
CSIA, (2000). Report on the Chinese Software Industry, China Software Industry Association
IDC (2001) China PC Market Analysis and Forecast
IDC (2001) China Software Market Overview, 2000-2005
Tschang, T. and Xue, L. (2003). The Chinese Software Industry: A Strategy of Creating Products for the Domestic Market. ADB Institute Working Paper, January 15.
Saxenian, A et al., (2002) Local and Global Networks: Immigrant Professionals in Silicon Valley, Public Policy Institute of California. San FranciscoWright, Winter, 2002. China's Changing Software Sector. AMCHAM CHINA 10-2002.
[carolc1]One of the difficulties in China is the concepts of "standardization" which can also mention
[carolc2]And also, a high degree of FDI that makes the decisions will depend on the parent company
And... Government officials still play a very important role in procurement process
And bride
Clone, source code stealing are very common in China as well
High localized requirements
[carolc3]How about Linux? And why Microsoft can penetrate the market so well. it should be good point to elaborate
How about the story of A330 assembly in TianJian that can tell why Boeing fails in China from year to year but Airbus wins
[carolc4]any example on how it relates particularly to Chinese market ?
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