Platform rules: Money-back guarantee in Crowdfunding

Crowdfunding is an interesting example of a platform mediated network. In this case the platform connects people with ideas in need of funding with people that want to fund ideas. There are no winner-take-all dynamics in this industry as multi-homing costs are low and the demand for differentiated features exists.

As there is a demand for differentiated features, the rules that platforms use to govern the exchange between the two user sides are important and offer platform providers means by which they can differentiate themselves. One of the pressing issues in crowdfunding is the problem with product ideas that never materialize. When an idea is funded yet it never materializes, potential funders can quickly lose faith in the platform. In a way it is seller uncertainty fueled market for lemons problem.

Indiegogo – one of the largest crowdfunding platforms – is attempting to find a solution to this problem. They want to answer the question: “How do you get your money back if the product never materializes?”. Indiegogo aims to answer this question by offering an insurance service, called perk insurance. The insurance service is optional and will allow funders to receive a full refund – minus the cost of insurance – if an idea doesn’t materialize before a preset date.

Perk insurance is fairly expensive, the costs run between 10-20 percent of a funding pledge amount. These high premiums could be indicative of fairly high degrees of seller uncertainty, as it would only make sense to purchase such an expensive insurance policy if your faith in the person you are investing in is low.

One of the offerings that offered insurance to funders was Olive – a wearable to manage stress – out of 1447 backers only three made use of the insurance option. These low rates might be indicative that the price of the insurance is too high to overcome the seller uncertainty that some funders experience.

sources:

http://techcrunch.com/2015/02/18/indiegogo-testing-way-to-refund-money-if-crowdfunded-project-does-not-ship/

https://www.indiegogo.com/

Makeup Genius: How L’Oréal is transforming and taking over the cosmetic industry.

Along with tackling the premise of information asymmetry in its online web shop, L’Oréal has acted upon a very strategic and innovative way of testing make up with the use of an app that integrates augmented reality within its system. Instead of going to crowded drugstores, being frustrated by the fact that trial makeup is not the most hygienic way of testing the product on your face, and the disability to test products within a short timeframe, this application enables you to test a large variety of L’Oréal’s products anytime and everywhere. In order to establish Makeup Genius L’Oréal cooperated with Image Metrics, a company that creates facial recognition software for video games and movies. This technology enables you to use the front-facing camera as a virtual mirror.

Makeup Genius enables you to have a drastic way of trying on make up with using nothing but your phone. Makeup Genius scans your face and allows you to select from a large range of L’Oréal’s products. The results are extremely realistic, which makes it seem as if you’re actually wearing the products. In order to make this Augmented Reality application, L’Oréal invested 18 months to develop, test, and enhance the application. While developing, the multinational incorporated thousands of products and over one hundred unique facial expressions. You can try out just eyeliner or create complete looks. Once you like what you see, you can save your look and share it with friends, as well as purchase the products online.

Furthermore, another way Makeup Genius removes the hassle of the in-store experience is by allowing you to scan the products and try them on virtually. Since the launch of Makeup Genius, many magazines have appraised the application. Fast Company even perceived L’Oreal to be one of the most innovative companies of 2015 (Mala, 2015). Additionally, more than 10 million people have downloaded the application and have tried on more than 25 million looks altogether, while using more than 65 million products (which is thus 65 million more makeup trials of L’Oreal’s products) (Makeup Genius, 2015).
This implementation of AR reduces information asymmetry in a very significant way, allowing customers to witness the traits of the products in a real life manner, whereby certain ambiguities about the product performance are slightly diminished. However, the product does not allow a customer to witness whether the product quality and user-friendliness is compatible with their expectations.

Will you be the new Makeup Genius user? Would you download the app and use AR to buy cosmetics of L’Oréal?

Digital Transformation Project – Group 12

Following the grand tradition of restaurants being relatively slowly to adopt new information technologies, this report investigates the current use of IT for the King’s Arms, and prescribes the adoption of new processes so as to improve the business.

As of today, the King’s Arms operates on a first come first served basis. Albeit long waiting times, sometimes reaching up to 45 minutes for a single customer, the restaurant is able to perform 3 rotations of 120 diners a day, which depicts the success of the food. In spite of the tremendous demand for the services of the King’s Arms, employees deplore that the current ordering processes whereby each table is served after the other is ineffective. Interviews revealed long periods of idleness in the kitchen which limit the revenues of the restaurant. Another issues stemmed from variation in procurement due to a lack of traceability from software.

As a result, this report proposes the establishment of personal digital assistants (PDAs), which are handheld ordering devices, in order to facilitate the communication between the floor staff and the kitchen. These devices allow for enhanced coordination of these functions and result in an increase of speed of service amongst other benefits. The back end digitalization of inventory management allows for a more accurate operation of the restaurant and a more effective tracking of supplies.

A business plan outlines the required investments into new technology as well as the potential financial outcomes, as modelled with scenario analyses. HioPOS is proposed as provider of the technology since the specifications of the HioPOS Plus meet the need of the King’s Arms. Risks remain relatively low when put in perspective with the potential benefits, which is why we strongly urge for a transition towards PDAs and its interconnection with an inventory management software.

The prescribed implementation timeline is to be used as a guideline for the introduction of the new technology. The report outlines necessary preparations that must take place before the IT-system is adopted. The transitional phase can be regarded as being critical seen that this is the phase requiring a long mutual understanding of the new system by all members of staff. Finally, after a period, successful implementation will ultimately be reflected through an increase in profit.

Tom Hendry – 366163th
Dennis Huisman – 369919dh
Micaela Arizpe – 368389ma
Theo Fromentin – 371049tf
Dylan Greenfield – 365747dg

Pillory anno 2015

Unless the form is changed over time the concept is been known for centuries: the pillory of a person. When a person did something wrong he or she was punished for that by “the public”. During the Stone Age rocks were thrown, in the Middle Ages rotten food was thrown at people and now, during the “digital era” there is a new way to let people be punished by the public: Social media.

Shaming is a quite new phenomenon, but can have very big impact on both people and companies. Just a little mistake, an inappropriate tweet or post can go viral in a very short time. Most of the time the effects are irreversible and can ruin a person or company totally.

For example the case of Justine Sacco: She was 30 years old, senior director of corporate communications and had only 170 followers on twitter. Right before she boarded for her flight from London Heathrow to Cape Town she tweeted: “Going to Africa. Hope I don’t get AIDS. Just kidding. I’m white!”. Her tweet went viral and (off course) not in a positive way. While she was asleep, during her flight she became the nr. 1 trending topic on Twitter. When 11 hours later her flight landed the damage was already done.

Her Twitter feed was filled with angry tweets and it went worse and worse.

“In light of @Justine-Sacco disgusting racist tweet, I’m donating to @care today”

“How did @JustineSacco get a PR job?! Her level of racist ignorance belongs on Fox News. #AIDS can affect anyone!”  

“I’m an IAC employee and I don’t want @JustineSacco doing any communications on our behalf ever again. Ever.”

And then one from her employer, IAC, the corporate owner of The Daily Beast, OKCupid and Vimeo: “This is an outrageous, offensive comment. Employee in question currently unreachable on an intl flight.”

Not only were people angry with her and was she target of a crusade against racism, the tone changed overtime into excitement and from there into entertainment.

“All I want for Christmas is to see @JustineSacco’s face when her plane lands and she checks her inbox/voicemail”

“Oh man, @JustineSacco is going to have the most painful phone-turning-on moment ever when her plane lands”

“We are about to watch this @JustineSacco bitch get fired. In REAL time. Before she even KNOWS she’s getting fired.”

In an interview she said: “I had a great career, and I loved my job, and it was taken away from me, and there was a lot of glory in that. Everybody else was very happy about that.”.

Another example was last summer with the killing of lion Cecil. Walter Palmer, the American dentist who paid 50.000 dollar to kill the lion was globally shamed for it. According to Dr. Peter Vasterman, media-sociologist social media are ideal to express indignation. First, because it is a easy to do and can be done immediately. Second the chance is quite big that you’ll find support from others. This has an amplifying effect. And there is a problem with the power of social media. According to Mr. Tempelman, IT attorney most people are hanged by the public before they are even convicted.

Hess & Waller conclude that in these digital times the shaming will increase and that for “ordinary” people there is almost no protection, regardless of the question if this person is guilty or not guilty. I think it is good to think about the consequences of “just sharing or retweeting” that one tweet or post. Like seen above, the impact can be way bigger what might be appropriate.

 

References:

Hess, K. & Waller, L. (2014) ‘The digital pillory: media shaming of ‘ordinary’ people for minor crimes’, Continuum: Journal of Media & Cultural studies, 28,4, pp. 101-111.

Ronson, J. (2015) ‘How one stupid tweet ruined Justine Saccos life’, The New York Times Magazine, 15 February 2015: p. 20

Unknown author:

NOS op 3 (2015) ‘Als prooi overgeleverd aan de social media’ 31 July 2015. Available: http://nos.nl/op3/artikel/2049759-als-prooi-overgeleverd-aan-de-social-media.html

 

Technological Innovations in Music Festivals

glastonbury

Technology has always been an important part of festivals. How else are thousands of visitors able to hear the music that a band is playing on a big stage? Last years, however, some major innovations have taken place in the music festival industry, and these innovations are mainly focused on improving the visitors’ experience of the festival.

Nowadays, every music festival has its own app. These apps, consisting of information about performing artists and a map to indicate where all the stages are, seem to replace the traditional small booklet distributed at the entrance. Furthermore, the number of other apps that are concerned with the visitors of music festivals is rising. Visitors can use apps like ‘Tent Finder’ to find their tents in the middle of the night, or apps like ‘Festvl’ to create your own line-up of the acts you’re dying to see.

FestivalApp

Another innovation is the digital festival wristbands. With the help of NFC (Near Field Communication) technology, we can pay with our smartphones or wristbands. More and more festivals are integrating a payment chip in their wristbands in order to increase the efficiency of buying food or drinks at a food truck at their festival. Another advantage of this innovation is that it increases the safety at festivals, since no cash is going over the counter.

There are also some trends that show the fear for technological innovations. One of them is the fact that people like to use a selfie stick to take a selfie with their friends at a concert of their favourite bands. This innovation, however, can lead to irritations to other visitors of the festival. This is exactly why festivals like Coachella, Lollapalooza, Pinkpop and Lowlands don’t permit these selfie sticks. Another innovation that can have some negative effects is the use of apps like ‘Periscope’ or ‘Meerkat’. Whit these apps, visitors can stream live video of the concerts they visit to share it with their friends. This can lead to serious copyright issues.

Concluding, most technological innovations improve visitors’ experiences of the music festival, and we have to continue to try to improve this even more. But we must be careful that these innovations don’t lead to new issues or problems.

Sources:

de Hooge, M. (2015) “Technologie tijdens festivals” [online] Available at: http://iq.intel.nl/technologie-tijdens-festivals/ [Accessed at: 18-10-2015]

van Iersel, F. (2015) “Festivals verbieden selfie sticks” [online] Available at: http://leijp.nl/festivals-verbieden-selfie-sticks/ [Accessed at: 18-10-2015]

Williams, R. (2015) “The 10 best festival apps” [online] Available at: http://www.telegraph.co.uk/technology/news/11680861/The-10-best-festival-apps.html [Accessed at: 18-10-2015]

Matthew van Cooten – 359947

The future of fully self-scan supermarkets

Looking at supermarkets nowadays, we see many new developments when it comes to doing grocery shopping. Doing your groceries just isn’t the same as it used to be anymore. New innovations (made possible by new technology), enable us as consumers to experience grocery shopping in a whole new way, all of it to make grocery shopping easier, more efficient and more convenient.

Albert Heijn, for example, provides customers with the option of self-scanning (with a hand scanner or mobile phone app) and self-check outs. In the AH To Go’s the self-checkout service is already offered, as well as in other AH supermarkets.

Recently, however, AH decided to take the self-scanning concept to a major store and has opened its first fully self-scan (and pin) supermarket in Amsterdam. Customer can choose out of three options: self-scanning using the hand scanner, using the Appie app on one’s smartphone or the self-scan checkouts. Customers pay the bill without the intervention of the cashiers anymore. Scrapping the old-fashioned checkouts also means an increase in amount of space availability for products (DutchNews, 2015).

Ahold says the self-scan supermarket is not intended to cut cost and the self-scan supermarket has just the same amount of staff as like the similar supermarkets with old-fashioned cash registers. Staff, like cashiers, are getting a different role and are on hand to answer questions from customers, and to help customers with self-scanning. Another feature of this supermarket is that customers cannot pay by cash anymore, but can only pin.

albert-heijn-opent-zelfscan-supermarkt

First of all, I think this is a very interesting concept, especially an interesting approach AH has taken to open a fully self-scan supermarket. Nevertheless, there are a few things I am wondering about. They say the number of staff has not reduced, although, will this still be the case in the future? Cashiers perform a whole different kind of job now, walking through the store, helping customers with questions about self-scanning… how will this kind of job end up like based on the long-run? After a while, customers are probably going to need less help with self-scanning and the need for (the same amount of) employees is most likely going to drop in the future. So what kind of effect does this change have on the job market according to you?

Second of all, there is no option to pay with cash, which I find a bit inconvenient as well. I assume most people pay by debit card anyway nowadays, but there should still be the option to pay with cash, for example for small groceries. The fact that AH only provides payment by debit card (pin) is most likely going to help them with marketing and/or data collection as well. They are able to track consumer behavior even more now by only providing aforementioned payment option.

Third, the idea of a fully automated kind of supermarket just makes me feel like there’s definitely going to be less customer interaction. Technological advances drive us even further away from actual human interaction. So what is the future going to be like for these kinds of supermarkets?

AH is very curious as to how customers will react, and so am I. I wonder if this really is the future for supermarkets. I doubt it, but I would love to hear some of your thought about this recent development!

Linda Tram – 355313
—————————–

References:

DutchNews, (2015), “Albert Heijn opens supermarket with self-scan check-outs only”, DutchNews.nl, accessed at: http://www.dutchnews.nl/news/archives/2015/10/albert-heijn-opens-supermarket-with-self-scan-check-outs-only/

Emerce, (2015), “Albert Heijn opent volledige zelfscan supermarkt”, Emerce.nl, accessed at: http://www.emerce.nl/nieuws/albert-heijn-opent-volledige-zelfscan-supermarkt

Predictive Policing

Two masked man break open a window and pursue to climb inside. Before they can set their feet inside the house a bright light blinds them and they hear the words being yelled ‘Freeze!’. A police offer prevents a burglary before the man can even enter the house. The scenario may suggest a coincidence of the officer being in the right place at the right time, in reality they were guided by a software program that predicted the crime.

Although predictions shouldn’t be taken as an absolute reality, the hypermodern technique to predict the time and location of future crimes using sophisticated computer models and algorithms is becoming a more widespread police system. The goal is to transform policing from a reactive process to a proactive process. An important side note is to view the technique as complementary to police knowledge, experience and judgment of possible relevant information (Greengard, 2012).

Key is to use a Data Warehouse encompassing data of criminal activities and linking relevant data to it (Willems and Doeleman, 2014) Although it is essential to keep the model simple, otherwise the model might wind up saying nothing definitive, over time other variables could be added in the model, such as epidemiology data, climate and weather, economic factors and even spatial geography and census data (Greengard 2012). To find additional patterns that the human eye would fail to see, data mining is being used. Crime will always have a significant stochastic or random component, however the non-random component that crime has is being exploited (Greengard, 2012).

For example the Amsterdam Police has implemented the system Criminal Anticipation System (CAS). High-impact crimes (burglary, robbery) are predicted by creating heat maps with territories that span 125 meter by 125 meter. Using only the top 3% of territories high risks are given warmer colors than lower probabilities with colder colors. On the basis of this information resources are deployed to timeframes and areas that seem to matter. 40% of all burglaries and 60% of all robberies are predicted by using only 3% of the territories in Amsterdam (Willems and Doeleman, 2014).

Heat

The opportunities of the system are obvious, however a possible threat to the system is criminals may anticipate on predictions and alter their behavior. A drop of criminal activity in one hot territory may be only temporal as in this cat-and-mouse game criminals will look for new spots to base their criminal intentions. Privacy issues are also a problem that may concern the system. Following individuals could touch upon privacy issues (Greengard, 2012). Furthermore these techniques may be used to justify greater data collection and more surveillance. Finally a future in which civilians are being corrected by the state before they do something suspicious is not one we root for (Reve, 2015).

Van het Reve, J. ‘De toekomstpolitie’, De volkskrant, 26-9-2015.

Greengard, S. ‘Policing the future’, Communications of the ACM, Vol. 55, no 3, march 2012.

Willems, D., Doeleman, R. ‘Predictive Policing-Wens of Werkelijkheid?’ Het tijdschrift voor de politie, jg 76, no 4, 5, 2014.

DTP Project: Albert Heijn Virtual Stores – Team 9

tesco-660_012715012420

Online grocery shopping has changed the way many people do their groceries in the Netherlands. Instead of spending time in the supermarket one simply places the order online and the groceries are delivered after 24 hours right in the kitchen. Online shopping usually appeals to customers doing large orders for the family for the whole week. Despite the appeal of shopping in this way, it doesn’t cater the need of all customers, like business people or students, needing some groceries for the evening. 24 Hours delivery time will be too long if you need something the same evening, delivery costs are relatively high if you order just a few products and you still have to remember and take your time to place an order. These customers are tired after working or studying the whole day and they don’t want to do the groceries anymore.

In our transformation project we therefore proposed a new business model for the largest supermarket chain in the Netherlands, Albert Heijn, to target this group of customers. In our plan the supermarket is brought to them in virtual form to the places where the a lot of time is usually wasted, waiting for public transit at the station (Samsung, 2014). These virtual stores will be formed by posters that look similar to the shelves of a real supermarket. The products will be placed side by side on these virtual shelves and will have a price label underneath them. Customers can ‘grab’ a product from the shelf by scanning the QR code next to the price label with their smartphone. The product will then be placed in a virtual basket. When finished, the customer can checkout the products and pay them using the phone. The virtual stores functions as a reminder to do the grocery shopping and let people quickly grab the products they need while waiting. The orders can then either be picked up at a local supermarket or at special pickup lockers at the same or other station on their way home. The local supermarket can even deliver the order at home within three hours.

This business model is fundamentally different from the current online business model. The current business model uses a small number of regional distribution centers to service an area, where the new business model will leverage the existing network of over 900 local supermarkets to offer this group of customers faster delivery and more pickup options. Using modern technology it combines traditional grocery shopping with modern online grocery shopping.

This model will also create extra visibility for the Albert Heijn brand at high traffic locations and will confirm Albert Heijn’s reputation as an innovative company. It can also create new revenue streams by allowing producers to have their product more prominently presented at the virtual stores.

J.H. Aben – 171724JA

L. Keijzer – 355076LK

K.B.T. Tram – 355313KT

C.K. Nguyen – 361546CN

Samsung (2014), Saai woon-werkverkeer kost Nederlander gemiddeld een week per jaar.

http://www.samsungpers.nl/saai-woon-werkverkeer-kost-nederlander-gemiddeld-een-week-per-jaar

Making Talking Generate Next Billion Dollar

In February 2014, WhatsApp was sold to Facebook for an unbelievable figure – 19 billion dollars. Within the next few weeks, it was all over everybody’s blogs, Facebook statuses, lunch conversations, and even kids in school were talking about it. People could not understand that a company whose only product is a messaging app could be worth that much money.

4  1   2   5

WhatsApp is not the only messenger out there. Snapchat, Facebook Messenger, LINE, WeChat, and many others are also stakeholders in the industry. They proved to be a cheap alternative to operator-based text messaging via SMS, and they provide many more features that SMS doesn’t have. According to statistics, in August 2015, WhatsApp has an active user number of 800 million, Facebook messenger has 700 million, and WeChat has 600 million. If we just do a simple math and not include all added features that each messenger provides, all chat messengers have a combined valuation of over 200 billion dollars. That’s half of Google or 4 times more than Yahoo!.

Interestingly on the contrary side, all these messaging apps struggled to figure out their revenue model. Evan Spiegel, the co-founder of Snapchat, acknowledged in an interview the extreme difficulty of making a feasible one. Many internet companies are backed by ads revenue. Google, for example, revealed in their multiple annual reports that more than 90% of their revenue comes from ads. One of their many services, Google Adsense, analyzes a web page and provides advertisements that best fit the content of that page. However, most people on messengers send private messages to their friends, and it is impossible to insert any ad into the conversation. Out of privacy concerns, it is also unlikely to run algorithms on user’s messages to provide personalized recommendations.

Realizing this limitation, apps began to expand their service into other communication areas, such as emojis, playing games with friends, sending money, interesting new content, etc. This is a very successful first step. In 2013, LINE reported in their Q2 quarter report, that out of their $100 million quarterly revenue, game purchase and in-game purchase accounted for 53%, and emojis accounted for 27%. Snapchat is piloting the new discovery feature that pushes sponsored content to the user. With the existing ads before playing video revenue model, the company stated that their revenue is estimated at $50 million dollars this year.

In addition to these efforts, LINE and WeChat also aim to build up their own ecosystems. WeChat launched a feature to send money to multiple friends in January 2014. It targets the Chinese tradition of giving monetary gifts to friends and family for auspicious blessings on special occasions. On 2015 Chinese New Year’s Eve, more than 1.5 billion “red envelopes” were sent on a single day. WeChat also keeps a semi-bank account for a user. Besides sending money to friends from the account, the money could also be used to make purchase, refill phone cards, call a taxi, pay utility bills and many more. WeChat has built a successful image within China and it has penetrated into many aspects of people’s life.

In conclusion, the entire messenger ecosystem is very enormous. The user-to-user communication nature allowed exponential growth in the user base. With the vastly and constantly growing user base, companies are able to reach billion dollars valuation within a very short amount of time. The next step, to achieve their billion dollars revenue, companies are experimenting to expand their services into our daily life. LINE and WhatsApp have built up their ecosystem that allows users to call taxis, stream music, order foods, and we can predict soon other companies will have similar strategies to expand their verticals.

Digital Transformation Project – PLUS Mobile App 2.0 – Team 38

Plus-groot-290x290

PLUS Retail is a Dutch supermarket chain with 255 stores across the Netherlands. The co-operative is run by over 200 independent entrepreneurs and reported approximately 2.1 billion net sales in 2014 (PLUS.nl, 2015). PLUS seeks to align its operations with four strategic pillars it has identified, namely: Attention, Quality, Local and Responsibility. These pillars are reflected both in the types of products and services PLUS chooses to offer, as well as the environmental initiatives it takes.

Currently, the Dutch supermarket industry is growing, especially with regards to the online segment, which grew by 55% in 2014. Despite the industry growth, PLUS has been losing market share, and so is required to implement new strategies to combat this. As the market is shifting away from only traditional retail stores, and towards a multichannel industry, PLUS needs to align its current IT strategy with the main market trends and consumer preferences.

In recent years, PLUS has realized the potential of optimizing its value chain through the use of information and communications technology (ICT). In 2013, it launched the “IT Excellence” program, with the goal of improving the IT infrastructure and optimizing processes. However, as changes are only being implemented now, it can be stated that PLUS is lagging behind with regards to its competition.

We believe that PLUS should develop a sophisticated mobile application, which will include a store locator, a product finder and an order management system. It will also enable PLUS to offer tailored promotions to its customers, based on their purchasing habits. There are many advantages expected from the implementation of this solution and the supermarket chain cannot afford to miss out on this opportunity and needs to be innovative in its digital strategy.  The app will not cannibalize the offline communication but improve processes and make them more efficient. There will be a high impact on the core organization but rather a low impact on the core strategy.

There are numerous benefits to using this solution. As the online grocery market is expected to double in size over the next 2 years, totaling 1 billion by the end of 2016 (Syndy, 2015), PLUS is expected to greatly profit from this growth with the implementation of this solution. This is mainly due to a higher service level provided and a larger customer base reached via the app. In addition, online customers tend to spend an average of 20% more than offline customers (Ahold, 2014). All these factors would result in a 52.5% increase in online sales and 35% growth in online market share, in the first year after implementation. The second year could result in an even greater increase, with 85.3% sales boost and 48% market growth, resulting in an additional 15 and 30 million in revenues, respectively.

Through the application, PLUS would be able to leverage its current status of being a competitive supermarket in the Netherlands in terms of its customer service while reinforcing its four pillars of ‘attention’, ‘responsibility’, ‘quality’ and ‘local’. The risks association with its development and implementation such as the ambiguity of the accompanying costs can be mitigated through thorough planning and proper staff training, which is undoubtedly within the skill set of PLUS’ experienced management board. Should the proposed digital transformation be a successful one, PLUS will be on its way to becoming a strong adversary in the online grocery retail space.

References

Syndy, (2015). The State of Online Grocery Retail in Europe.  [online] Amstelveen: Syndy. Available at:

http://www.syndy.com/report-the-state-of-online-grocery-retail-2015/ [Accessed 15 Sep. 2015].

PLUS.nl, (2015). PLUS retail – PLUS als organisatie | PLUS . [online] Available at:

https://www.PLUS.nl/info-over-PLUS/organisatie/PLUS-retail [Accessed 18 Sep. 2015].

Ahold, (2014). Ahold Annual Report 2014.  [online] Available at: https://www.ahold.com/Financialinformation/

Annual-reports/Annual-Report-2014.htm [Accessed 17 Sep. 2015].

Members:

Martin Kayser           353884mk

Benedikt Kolbert      353958bk

Kiki Huang                354902kh

Michal Floss              356166mf

Thomas Gratzmuller  357457tg

Digital Transformation Project: HR at PostNL – Team 1

PostNL_Web_512px

PostNL is the largest and best-known post and parcel distributor in the Netherlands. For a long time, PostNL was able to operate in a relative “safe” environment, as it had the privilege of being the sole organization that was allowed to distribute post in the Netherlands (originally, PostNL was state-owned). However, in the current environment PostNL is facing certain challenges which forces the organization to adapt. More specifically, the current market is digitising, e-commerce is growing, competition is getting fiercer, and the regulatory landscape is shifting. PostNL aims to differentiate itself by being customer focused, rethinking services and solutions, and by focusing on trusted delivery. These value-drivers are based on three pillars, being people, IT infrastructure, and a strong network. The workforce of PostNL is perceived to be their most important assets, as in the end, it is them who are creating value to the customer, and thus making revenue.

HR is the primary department that is focusing on managing the workforce. Within HR, a cloud-based solution, SuccessFactors, is introduced to streamline certain HR practices, including performance management and PostNL academy (training module). For the project at hand, we focused on the performance management process.

In order to improve the existing process, we recommended PostNL to introduce a digital portfolio, connected to the existing information technology. By doing so, the performance appraisal cycle will become become bottom-up, data driven, continuous, and interactive, instead of the current top-down, slow, and not-data driven manner. Employees will be asked regularly to give feedback to the peers they have met within the organisation. Thereby, data can be tracked continuously and from a wide variety of angles. This data can be used to facilitate the performance appraisal conversations with the given employees.

However, there are certain risks involved, when choosing to implement such a system. For example, the employees within the organisation may be reluctant to download an application that would facilitate the feedback-option. The adoptation rate is highly essential, as objective feedback requires much imput, instead of just a few ratings. Furthermore, by asking peers to give feedback to peers, there is a social desirability bias involved. individuals may either give overly positive feedback to peers they do like, or overly negative feedback to peers they do not like, or to those they have had an affective conflict with recently. In order to overcome such challenges, PostNL should clearly communicate what the exact value of the novel system is, and emphasize that in the end, the employees will benefit as it is their development that is at stake. Furthermore, it could provide trainings to show how the novel feedback system works, so that the individual employees may better see the value. Consequently, they will more likely to adopt the new way of performance management, and might be using it more objectively.

Eventually, the development of employees will enable PostNL to execute their strategy in a more effective manner; such a change in HR will enable the organisation as a whole to better reach their strategic goals.

Etihad Airways signs $700 million deal with IBM

On Tuesday 13 October Etihad signed a deal with IBM for services that include security and infrastructure. The agreement is signed for 10 years. IBM will deliver these services to enable Etihad Airways to transform the IT infrastructure to have a better service level for customers and employees.  One of the most important plan in this agreement is the usage of cloud-based platforms.

This is a good example of Porters view on IT: “Companies should not have internet as a strategy, but integrate it into their strategy.” The core value activities should not be affected by IT. This is the case at Etihad as their strategy is based on giving quality to customers. There is an alignment between Information Strategy and Business Strategy.

Why is Etihad so successful?

There are a few reasons that Etihad is successful. The most important reason is the partnerships they have made. Where there is usually an alliance (there are three major alliances: SkyTeam, Oneworld and Star Alliance), Etihad codeshares(same flight with different flightnumbers) with any airline that makes financial sense. As Etihad is not involved in an alliance, it is free to do this with any airline it wants. Etihad codeshares with AirBerlin (Oneworld) and Air France/KLM(SkyTeam) which are in the same region.

This is not the only thing Etihad does so well, they unique strategy they have is taking financial stakes in close partners. For example: Jet Airways, Aer Lingus, Air Seychelles, AirBerlin. According to Hogan (CEO Etihad) these equity investments allow partners to achieve a scale that has cost benefits, not just revenue benefits which are not found in codesharing partnerships or alliances.

Back to the deal, there are a lot of things that are being covered. For example the airline’s infrastructure will go to the cloud with a data centre in Abu Dhabi. Another part of the deal is a joint technology and innovation council which will take care of development of more personalized travel solutions.

Sources:

http://www.itproportal.com/2015/10/13/ibm-and-etihad-airways-sign-a-459m-deal/

http://www.etihad.com/en-ie/about-us/etihad-news/archive/2015/etihad-airways-signs-us-700-million-technology-services-cloud-collaboration-with-ibm-to-transform-global-operations/

Facebook chatting the substituut for a doctor’s appointment?

Have you ever felt sick and googled your symptoms? You probably found that you were having a n incurable decease and would die within a short period of time. Soon this problem might be over. Thanks to the use of social media healthcare professionals and patients can be connected. Social media can be used for several goals. It can improve or enhance professional networking and education, organizational promotion but for (potential) patients it can improve care and education.

The use of the term social media refers to ‘Internet-based tools that allow individuals and communities to gather and communicate; to share information, ideas, personal messages, images and other content; and, in some cases, to collaborate with other users in real time.

For online interaction with patients is a growing interest. Some physiciants try to enhance the communication with patients by the use of social media. Twitter and Facebook are the main channels. A study found that approximately 60% of physicians were in favor of interacting with patients through social media fort the purpose of providing patient education, health monitoring, for encouraging behavioral changes and drug adherence. They hope that these efforts will result in ‘better education, increased compliance and better outcomes.’

If patients have contact with their physicians via social media this can result in a better awareness of the advice. It can increase the time spent communicating with patients and therefore answering more questions, improving patient satisfaction. In addition, social media can be used for reminders, scheduling appointments, diagnostic test results, prescription notifications and answering general questions.

Messaging can be used to improve doctor patient contact particularly focus on patients with chronic, rare or fatal diseases. It would also be beneficial for questions about maternal or infant care.

Next to patient care and communications, patient education can also be increased by the use of social media. The distribution of credible information has been proved to motivate observable behavioral changes within social networks. Patients could access these platforms for health care information and other educational resources. Via social media patients can join virtual communities, participate in research, receive financial or moral support, set goals and track personal progress.

Physicians can tweet, make blog posts, record videos and participate in discussion forums. All these channels provide opportunities to distribute evidence-based information to counter inaccurate material on the Internet. This will make sure we don’t find at every symptom we Google we might die.

Observational learning by social media can be used for health care purposes. Showing on Facebook profiles if someone is an organ-donor can stimulate other to do so as well. Donate Life America experienced a 23-fold surge in donor pledges the week after Facebook allowed users to post their organ-donor status in their profile.

Social media offers the potential to improve healthcare, especially patient care. Having more possibilities to ask questions and find researched-based information will result in a better understanding of the patient’s own disease and this without having to leave the house. But would you like to hear via Facebook whether or not you’re having a fatal disease?

Source:

Ventola, C.L., (2014) ‘Social media and health care professionals: Benefits, risks and best practices’ Pharmacy and Therapeutics, 39(7), pp. 491-499

Digital Transformation Project: Nederlandse Energie Maatschappij (Group 17)

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The Nederlandse Energie Maatschappij (NLE) is a Dutch energy supplier located in Rotterdam. It was founded in 2005 following the opening of the Dutch energy supply market in July 2004. It has since established itself as one of the main competitors of the more traditional companies such as Eneco and Essent. NLE tries to distinguish itself from its competitors by offering purely ‘green’ energy, as well as offering energy at a lower price than its competitors.

The main issue for the Nederlandse Energie Maatschappij is the slow exchange of information between the company and its customers. In the current situation the company asks its customers to send their energy levels once a year, from which they calculate the customer’s energy consumption. However to prevent customers from having to pay a large amount of money at once, NLE charges customers a monthly fee based on the customer’s energy consumption from the previous 3 years. The drawback of this method is that at the end of the year the amount the customers have paid, and the amount of energy they have consumed hardly ever lines up. This results in either customers having to pay extra, or NLE having to transfer money back towards its customers. This leads to unnecessary transaction costs which conflict with NLE’s low cost strategy.

We propose for NLE to embed a technology called Crownstone into their business model. Crownstone is a device which customers can install in their homes, which essentially transfers their houses into ‘smart homes’. What this means is that NLE can access real-time information about their customer’s energy usage, and thus bill them accordingly. By implementing this technology we predict that NLE’s transaction costs will decline, therefore allowing them to further lower their prices, and thus increasing value for their customers.


A video introducing the Crownstone Technology

Babet van der Giesen 363995 B.G.

Yorick van de Riet 357297 Y.R.

Maikel Ooms 341182 M.O.

Mathijs Daalderop 360013 M.D.

Sjoerd Poppelaars 361339 S.P.

Putting Iron Man on the front line of US defense?

Iron man

“I am here to announce that we are building Iron Man.” This is what President Obama told the media at an innovation summit last year. “This has been a secret project we have been working on for a long time. Not really. Maybe. It’s classified.”

The US military is closer than ever to putting Iron Man on the front lines of the US army. Or at least, something that closely mirrors the superhero’s suit of armor. It is developing an advanced military suit: TALOS, or Tactical Assault Light Operator Suit. It is designed to protect the lives of soldiers on the fron lines, especially those who lead the army in a mission.

The idea came from Adm. Bill McRaven, when a US soldier under his command died during a raid in Afghanistan, after the soldier kicked in a door. The top commander vowed to prevent similar tragedies in the future. Gen. Joseph Votel, head of the US Special Operations took over the TALOS program that was launched by Adm. McRaven. The goal: “To give that operator the advantage when he is most vulnerable” (Votel).

talos
TALOS prototype.

Compared to Tony Stark’s suit, TALOS is a liquid armor that can soldify when it is hit by a bullet. However, it will not be able to fly or be guided by JARVIS, although the in-helmet technologies improve visibility and provide better communication with the troop. Nanotechnology was applied to produce this adaptive liquid material. The suit also monitors the wearer’s health, such as heart rate and body temperature.

The TALOS program has churned out several prototypes, it is aiming to deliver a first-generation suit by August, 2018.

 

How much will this cool tech eventually cost? A 2014 article by Defense Tech reports a budget of $80 million into R&D of TALOS, but it may cost even hundreds of millions more dollars to perfect the technology before it is used on the battlefield.

 

References:

http://edition.cnn.com/2015/10/06/politics/special-operations-iron-man-talos-suit/index.html

http://www.techtimes.com/articles/92478/20151007/u-s-military-to-deliver-its-first-bulletproof-weaponized-iron-man-suit-in-2018.htm

http://www.digitaltrends.com/cool-tech/us-military-readies-iron-man-style-suit-for-deployment/

https://theintercept.com/2015/06/02/special-operations-iron-man-suit-lives/

The Dell-EMC deal. Will it change the tech landscape?

One of the most important deals in the tech business this year is that Dell is purchasing the cloud- and data storage company EMC for about 67 billion dollars, which is around 24 dollars per share for the EMC shareholders. The merger of the two companies will allow Michael Dell to remain CEO and more importantly will allow for the diversification of Dell, which is essential for the company’s long term strategy, because the PC market is not as strong as it used to be, to put it mildly.

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According to Business Insider the same merger could have happened in 2002, but Michael Dell personally stopped the acquisition talks; he was afraid of an acquisition so large right after the burst of the internet bubble, despite EMC being valued at around 16 billion dollars back then. However, at the time Dell’s strategy was focused on manufacturing as many PCs as possible at an extremely high profit margin, utilizing its economies of scale that was practically unmatchable at the time.

EMC may not be as widely known as Dell, but it is actually a very large company with more 70 thousand employees worldwide, providing very popular cloud- and data storage services. The company also owns the RSA digital security software analysis company and the major part of Vmware, which is a software virtualization company. According to leaked information about the details of the merger, Dell has agreed to keep Vmware as an independently operating company.

According to Daniel Ives, who is the Managing Director in the technology, media and telecom research group of the enterprise software company FBR Capital Markets & Co., FBRC, this is just the tip of the iceberg and many acquisitions will follow from large, traditional tech companies. He also mentions some actual examples that could potentially happen in the foreseeable future: 1. Cisco and NetApp, 2. Cisco and FireEye, 3. IBM and Splunk, 4. IBM and Tableau, 5. HP and Fortinet, 6. Microsoft and Salesforce, 7.Oracle and Netsuite.

Do you think that the Dell-EMC deal will have a long lasting effect on the tech industry?  Will it motivate other large, traditional tech companies to engage in large scale M&A deals that will significantly change the tech landscape? And more importantly, is it beneficial for the tech industry? What is your opinion on the matter?

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References

https://www.twst.com/bio/daniel-ives-2

http://hvg.hu/tudomany/20151012_Rekord_megtortent_a_techvilag_eddigi_leg

http://uk.businessinsider.com/dell-emc-deal-2015-10?r=US&IR=T

http://uk.businessinsider.com/dell-acquires-emc-vmware-2015-10?r=US&IR=T

http://www.patentlyapple.com/patently-apple/2015/10/dell-buys-emc-for-67-billion-making-it-the-largest-technology-takeover-in-history.html

http://uk.businessinsider.com/dell-emc-deal-could-spur-more-huge-tech-mergers-2015-10?r=US&IR=T

http://uk.businessinsider.com/michael-dell-blocks-emc-acquisition-plans-in-2002-2015-10?r=US&IR=T

 

Learn everything; Khan Academy

A deeper look into Khan Academy

Multiple blog posts have addresses subjects like MOOC’s (massive online open courses), the need for learning programming and so on. I wanted to delve deeper into Khan Academy. Khan Academy is a free online place where everyone can learn. How is it different from MOOC’s? Well, Khan Academy does not offer courses; it merely provides the opportunity to learn from a wide range of subjects. You cannot earn an official certificate or degree from Khan Academy. However, Khan Academy is free and open for everyone. Any day and any time people can make use of the content on Khan academy. There is also an unofficial application so you can learn while being offline.

Background; Salman Khan founded Khan Academy in 2006. Khan Academy is a free online educational website. Khan Academy covers all sorts of subjects through Youtube videos and hands on practice. There are over 100,000 interactive exercises. The level of the subjects ranges from kindergarten to university. Over 32 million people have joined Khan Academy already. Since a few years Khan Academy encourages users by making use of gamification. Users can earn badges by completing exercises, watching instruction videos and so on. Some badges are easy to earn while others require a lot of work. The end goal is to earn all ‘mastery’ badges, which mean you completed (master) all parts of a subject.

Khan Academy is free and relies on donations to cover costs they make. However, they also need the crowd to improve their content. Users are encouraged to discuss the subjects, and when mistakes are spotted Khan Academy will fix their videos and other content. Khan Academy also makes use of the crowd for worth-of-mouth to advertise the experiences of users and to get new people to join.

In short the benefits of Khan Academy are:

  • Khan Academy is completely free
  • You can use it any time any day
  • They cover subjects in: Math, Science, Economics & Finance, Arts & Humanities, Computing, Test Prep
  • Provide help with College admissions and talks & interviews
  • It is a helpful tool for coaches
  • They are partners with institutions such as museums, MIT and NASA
  • You can earn badges

Have you joined the community of Khan Academy yet? If not, why? And if yes, what do you like most about Khan Academy? What is your favorite subject?

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Sources: https://www.khanacademy.org

DRM: Is it good or evil?

Recent hype about DRM

Recently, in Brussels an unusual committee session was held. JPEG committee discussed, whether  DRM (Digital Rights Management) protection should be added to digital images. In case of the DRM approval (luckily, this proposal was refused), it may happen that you won’t be longer able to set your favorite album cover picture as a wallpaper, because it may be DRM protected.

It reminds the situation with the banknotes. If you try to scan euros or dollars, the software of your scanner will recognize that it is a banknote and refuse to scan it <LINK>. Imagine what will be the consequences once DRM-protected pictures become widespread.

Defective by design

The dissatisfaction with DRM can be traced back even 10 years ago. For example, Free Software Foundation, NGO supporting the spur of free software, organized an initiative against DRM called “Defective by design” in 2006. The name of the initiative reflected the view at DRM.

Why do they think that DRM is so inefficient? The most common arguments are:

  1. What is the sense of punishing those who has already bought content? As only legal content can be DRM protected, this way the companies impose restrictions on those who really bought it.
  2. DRM locks in users on a particular platform. You may for example no longer be copy your e-book on your new device, if the previous device brand doesn’t match that of new.
  3. Locking in of users on one platform causes monopolization. Once switch costs from on platform to another got so high, you will no longer be able to negotiate price to the extent you could. It is applicable both for users and independent publishers.
  4. DRM software may cause lags. DRM-protected software works smoothly in most use cases, however, when you try to do something unusual as text-to-speech, the system will freeze.

Is DRM good for companies?

Tom Refenes, Super Meat Boy developer, claims that DRM causes more harm on a firm profitability than piracy does. He states that in the current market conditions there is no way to fight piracy. It simply exists and you cannot do anything with it.

Let’s take an example. You bought “Fifty shades of gray” for Amazon Kindle and it happened to be DRM-enabled. Let us assume, you Kindle broke, but you still have your old Pocketbook e-reader. You try to copy it over there and read, but you cannot. DRM-protection of Amazon allows you to read only on the devices operated  by the major operation systems, which is not the case of Pocketbook.

I have to underline, you are the one who legally bought the content. Will you be stressed in this situation? Will you buy DRM-protected content again, when you can download almost any book in few clicks for free illegally?

Therefore, companies risk to lose their sales from those customers who willingly paid in the past.

Conclusion

Bearing in mind, that piracy is really hard to beat today and DRM adds additional pressure on the users who are already paying decreasing their willingness to pay, it is rather evil than good.

References

http://www.forbes.com/sites/davidthier/2013/03/19/drm-hurts-companies-more-than-piracy-developer-argues/

http://www.defectivebydesign.org/faq#harm

https://www.defectivebydesign.org/the-worst-thing-about-drm

http://www.fsf.org/about/

https://www.eff.org/deeplinks/2015/10/theres-no-drm-jpeg-lets-keep-it-way

Scalable and fast 3D printing for SMEs

voodoo-manufacturing-3d-printed-products Founded by 4 ex-Makerbot employees, Voodoo Manufacturing is a Brooklyn based 3D printing shop which offers people and businesses the opportunity to print their design cheaply and quickly, ranging from small to large batches (Biggs, 2015).

With its offering, Voodoo Manufacturing positions itself to become an outsourcing marketplace for small and medium sized businesses. With the potential to accommodate for large batches up to 10000 units, Voodoo aims at building a service which would be available to companies whose operations would not legitimize the contracting of large scale commercial printingsea-of-printers-1024x768services (Zaleski, 2015).

The differentiating factor for Voodoo as opposed to other 3D printing services stems from the company’s use of a substantial amount (127) of desktop printers. Albeit the fact that some consider these unreliable, CEO Max Friefeld claims that at “1/10 if the cost of traditional printers, [the company] can grow [its] factory effortlessly to meet additional demand”, entailing speed and scale of operations. Essentially making the factory into a printer farm, the machines are all operated through a single proprietary software, which is at the core of the company (Grunewald, 2015).

On the Voodoo Manufacturing web interface, customers are encouraged to drag and drop 3D files in order to receive an instant quote for their products. Furthermore, orders for prototypes and small batches benefit from priority printing and are consistently shipped the next day, giving the company a speed of execution on small orders, which is matched by few if any (Zaleski, 2015).

With its ambition to become an outsourcing partner for end parts, Voodoo also offers production via API. This entails that partners could integrate Voodoo into their “application or service and automatically route orders to be manufactured, packaged, and shipped” (Voodoo Manufacturing, 2015).

As concluding remarks, it is interesting to recognize that this new model of 3D printing services could lead to operational advantages and enhancements for SMEs. With the developments to 3D printing services and possibilities, one can speculate about how entire supply chains could be redesigned towards one single supplier manufacturing most of the end parts required for businesses. On the other hand, it is questionable whether the model of Voodoo Manufacturing with small desktop 3D printer farms is truly scalable.

What do you believe is 3D printing’s impact going to be on traditional business processes?  

Bibliography

Biggs, J. (2015). Voodoo Manufacturing Taps The Power Of 3D Printing To Make Things On Demand. [online] TechCrunch. Available at: http://techcrunch.com/2015/10/06/voodoo-manufacturing-taps-the-power-of-3d-printing-to-make-things-on-demand/ [Accessed 18 Oct. 2015].

Grunewald, S. (2015). Former MakerBot Team Launches Voodoo Manufacturing 3D Printing Service Bureau. [online] 3DPrint.com. Available at: http://3dprint.com/99194/voodoo-3d-printing-bureau/ [Accessed 18 Oct. 2015].

Voodoo Manufacturing, (2015). Voodoo Manufacturing: Fast, Affordable, Scalable 3D Printing. [online] Available at: https://www.voodoomfg.com/ [Accessed 18 Oct. 2015].

Zaleski, A. (2015). This MakerBot spin-off just launched a commercial 3D-printing service. [online] Fortune. Available at: http://fortune.com/2015/10/14/voodoo-manufacturing-commercial-3d-printing-service/ [Accessed 18 Oct. 2015].

Smart workout wear

Ralph Lauren recently launched their new sportswear collection, and it is not the pretty style that made me write a blog post about it. Their new collection can best be described as smart workout wear. The collection integrates IT wearables into their clothing. The smart workout wear could well become the newest trend in the sports industry. The clothes can keep track of many body functions like heart rate or calories burned. The Ralph Lauren PoloTech™ shirt for example works with an IPhone and monitors your heart rate, stress level, and balance. The IPhone app not only monitors these functions, but also includes adaptive workout sessions.  Other companies which offer these smart workout clothes include Athos or OMsignal, which also offer an app on which you can track your progress in real time.

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These workout clothes are handy for people who need to keep track of their performance, like professional athletes. But I think the market is especially attractive for amateur athletes.  Professionals might not mind the looks of their wearables and aim more for quality, since it is necessary for them to always improve their performances. However regular customers might enjoy the wearables even more, because they can now keep track of their performances and look stylish in the gym. Especially with brands like Ralph Lauren adopting the trend, that will not only aim for quality wearables, but also for good looks.

There can however also be some concerns that stem from this technology. The accuracy of these wearables might not always be correct, and any medical conclusions can probably not be taken from the data. Furthermore there might be some privacy concerns, for example when the apps which communicate with these clothes would be hacked and all that the app has kept track of can be seen.

http://www.ralphlauren.com/product/index.jsp?productId=69917696

Wishbone – one of the fastest growing social media apps

Wishbone how it works

Wishbone is a new app that allows you to poll your friends, which in turn helps them to make decisions. It works by first downloading the app from the app store, either Apple & Google Play. Once registered, you can take two pictures, which you upload to the Wishbone network. The network can then vote on the two choices. As a result, you can see which picture has received better feedback, which should help you to make a decision (Wishbone, 2015; Kosoff, 2015).

However, this is not the only thing the app offers. Wishbone also offers the possibility to vote on “hot or not” topics, such as humor, fashion, celebrities, sports, music, etc. In order to keep its users active, the app provides a daily & nightly dozen, i.e. 12 most popular questions pushed daily, which people can then vote on (Wishbone, 2015; Kosoff, 2015).

Within 4 months the app grew to become part of the top 10 downloaded social networking apps in the iOS App Store in 4 major English-speaking countries, i.e. US, UK, Canada and Australia (App Annie, 2015). Ranking between apps such as Facebook and Instagram, the question arises how this is even possible? The app currently enjoys a “viral pickup” in popularity, because it makes use of social media trends, such as shifting social media usage towards teenagers and a female dominance in visual oriented platforms (Kosoff, 2015; Lenhart, 2015). Moreover, popular Instagram users post and promote the app to their audience, which is mostly comprised of teen girls – combining both major aforementioned trends (App Annie, 2015; Kosoff, 2015). Last but not least, posts are sharable across platforms, such as Instagram, Twitter, Facebook, Weibo, Pinterest, Whatsapp, Messenger, iMessage, which again helps to increase brand awareness (Wishbone, 2015).

What is so interesting about Wishbone is that it allows brands to use it as a research and marketing tool by offering them a possibility to let users’ vote on a set of products, e.g. two pairs of shoes – one being purple, the other one pink. By receiving immediate feedback by a user base of 3 million active users, and more than 40 million voters every day, brands can use this as a strong tool to test market acceptance of their products (Wishbone, 2015; Kosoff, 2015; Wagner, 2015).

Let’s see whether this is just a recent growth trend, or if Wishbone manages to defend its position in the long run.

References

App Annie. (2015, April 14). App Annie Index: Market Q1 2015. Retrieved October 14, 2015, from App Annie Blog: http://blog.appannie.com/app-annie-index-market-q1-2015/

Kosoff, M. (2015, September 30). There’s a 4-month-old app that lets you poll your friends — and 3 million teen girls already love it. Retrieved October 17, 2015, from Business Insider UK: http://uk.businessinsider.com/what-is-wishbone-app-for-comparing-anything-2015-9?r=US&IR=T

Lenhart, A. (2015, April 8). Teens, Social Media & Technology Overview 2015. (. Retrieved October 18, 2015, from PewResearchCenter: http://www.pewinternet.org/2015/04/09/teens-social-media-technology-2015/

Wagner, K. (2015, October 3). Wishbone App Hopes the ‘Hot or Not’ Business Model Isn’t Done Just Yet. Retrieved October 17, 2015, from ReCode: http://recode.net/2015/10/03/wishbone-app-hopes-the-hot-or-not-business-model-isnt-done-just-yet/

Wishbone. (2015). Wishbone. Retrieved October 17, 2015, from http://www.getwishboneapp.com/

Picture:

http://uk.businessinsider.com/what-is-wishbone-app-for-comparing-anything-2015-9?r=US&IR=T

The dominance of Intel

When talking about microprocessors, the first name that comes to mind is probably Intel, the world’s largest and highest valued semiconductor chip makers. Intel’s dominance in the computer and laptop CPU market is unparalleled and no competitor is even close to be considered a rival. So why is Intel such a dominant force in this market? Bill Holt, the general manager of Intel’s Technology and Manufacturing Group, pointed out that Intel is three-and-a half years ahead of its nearest competitor in the fabrication of three-dimensional features, an transistor architectural adaptation necessary to reduce the size of the microprocessors (Forbes, 2014). This is crucial for manufacturers to stay competitive as smaller space translates directly in, less power usage, lower cost and most importantly greater performance. In addition, as the the silicon manufacturing process becomes more complex, the cost of a silicon fabric has increased from roughly $3 billion to $12 billion, forcing competing players out of the market. The number of players operating with silicon manufacturing process has declined significantly.Fewer and fewer firms can afford to sit at the big table in silicon manufacturing. Source: Intel Investor Meeting 2014, Stacy Smith, CFO

To further emphasize the dominance of Intel, the nearest competitor in the CPU market, Advanced Micro Devices (AMD), has around 17% market share and has been declining every year since 2009. The primary reason that AMD still has this percent mark is due to their exclusive partnerships with players in the console industry, providing processors to the Xbox One and PlayStation 4. However, when looking at the PC desktop and laptop market, Intel’s unit share hit over 95% of the total industry sales in the last 4 quarters.

Unlike Microsoft, known for their monopoly practices in the computer software industry which involved numerous high-profile antitrust lawsuits, Intel has been dominating the microprocessor market almost completely under the radar besides a major dispute in 2009 with AMD. How is this possible? Well there is an old controversial story in the history of microprocessors involving the two above mentioned parties and goes like this. To stay out of the potential antitrust lawsuits from the regulatory authorities, Intel has deliberately kept AMD in the business by licensing them the x86 processors design. After one decade, AMD has grown into a small but reasonable competitor. And around the time Microsoft was sued by competitors, the United States and even the European Union, Intel could simply point out and say that they do have a legitimate competitor and is not a monopolist in the CPU industry. So whenever AMD is doing well, as in the mid 2000’s with almost 20% market share, Intel would just take back their share by aggressive pricing. And whenever AMD fell under the 5%, they would let AMD breath again, just enough to survive. Of course this is just a rumor and there is no hard evidence to be found, however the numbers don’t lie as AMD’s market share went up and down so many times that have to start wondering that there must be some truth to this story.


References

References

1. Kay R. Forbes Welcome. Forbescom. 2015. Available at: http://www.forbes.com/sites/rogerkay/2014/11/25/intel-and-amd-the-juggernaut-vs-the-squid/. Accessed October 18, 2015.

2. Cunningham C. The rise and fall of AMD: How an underdog stuck it to Intel. Ars Technica. 2013. Available at: http://arstechnica.com/business/2013/04/the-rise-and-fall-of-amd-how-an-underdog-stuck-it-to-intel/3/. Accessed October 18, 2015.

3. Stevenson D. AMD vs Intel: which you should buy. PC Advisor. 2015. Available at: http://www.pcadvisor.co.uk/feature/pc-components/amd-vs-intel-3528212/. Accessed October 18, 2015.

Music market in China — will Apple music be a game changer

We all love music, but when comes to paying for it, sorry no. That works especially true for the Chinese music industry.

I will start this blog with some boring figures. 471 millions of Chinese users listen to music online, however only a fraction of the services have been paid. According to IFPI, the online music had a revenue for only $91 million in 2014, that gives to $0.19 per user annually — almost nothing. To put it in comparison with the western market, Spotify had an active user base around 75 millions and reported an annual revenue of 1.2 billion last year.

So why? 

If you ever saw the combination of “intellectual goods” and “China” in the news media, you will certainly understand this is a really less regulated market for intellectual property. The reason is that Chinese consumers are used to getting their music for free, thanks to over a hundred pirate sites in the territory. Music? Why should I pay for music? That is just the sad reality for music industry. Average users just don’t have any incentive to pay for music, given the fact they can get high quality music for free pretty much easily.

But still given the size of the market, it is arguably the market with a great growing potential. It is just like a golden goose which is not laying any eggs, yet. The music industry basically now gives away music to audience and then make money from other revenue channels like concert, fans meeting, ringtones or other idol related products (like t-shirts).

Will Apple music be a game changer?

Apple started to provide its subscription music service to the Chinese market, with an astonishingly cheap price — 10 RMB ($1.57) per month for individual users and 15 RMB for family users. Additionally users can enjoy the 3-month trial period for free. Considering about Apple’s dominant popularity in China’s high-end mobile market, this close to free music service is deadly attractive to its users.

In my opinion, Apple music will grow fast in the Chinese market by using the current pricing strategy. Comparing its main (legal) competitors such as QQ music, Xiami Music or Wangyi Yun Music, Apple have offered a more advanced recommendation system which will attract lots of users. Additionally, it can benefit to a great extent from its own ecosystem. For instance, the Apple music service is also connected with Siri and iTunes, which makes it extremely user-friendly.

Maybe someday in the future, with the slowly changing IP laws in China, the users have to pay for music.

Reference:

Feng.com,. ‘Apple Music来了: 用还是不用这是一个问题 Apple Music,中国区,音乐,苹果 _威锋网’. N.p., 2015. Web. 18 Oct. 2015.

Chan, Eric. ‘Apple Music 和 Itunes 电影今天正式在中国大陆推出’. Engadget 中国版. N.p., 2015. Web. 18 Oct. 2015.

Forbes.com,. ‘Forbes Welcome’. N.p., 2015. Web. 18 Oct. 2015.

Ifpi.org,. ‘China — IFPI — Representing The Recording Industry Worldwide’. N.p., 2015. Web. 18 Oct. 2015.

How you can save money with TransferWise!

You have studied abroad and had to struggle with high transfer fees?

Bye bye bank fees
TransferWise, a rapidly growing money transfer startup currently revolutionizes the global banking industry by offering a service that reduces transfer costs by up to 90% (TransferWise, 2015).

How does it work?

You go to the company’s website https://transferwise.com/ and find a currency calculator, where you can type in the amount you would like to transfer. Once you choose a currency, you can see a detailed explanation on the breakdown of the fees being charged. Then you will have to enter a few personal details before filling in the receiver’s data. You can then choose if you would like to pay by bank transfer or debit card. If you go for the latter, it works similarly to other online payment transactions. If you choose to pay by bank transfer you will be provided with TransferWise’s account details. Now you have to make your transaction (Price, 2015).

How is this possible?

TransferWise helps its customers to circumvent the traditional banking system by making use of a peer-to-peer system, in which a money transaction from a different customer that goes into the opposite direction is matched up against your payment at the mid-market exchange rate (Olson, 2015). This means that your money actually stays in the country, where it is sent from (Price, 2015). By doing so, TransferWise manages to undercut fees of traditional banks by up to 90%. In particular, TransferWise’s fee amounts to 0.5%, while traditional banks’ on average charge 5%. The company differentiates itself by stating that they do not charge any hidden fees as banks (Olson, 2015).

So go and …

transferwise_logo_detail

How does the competitive landscape look like?

TransferWise faces competitors, such as Dublin-based CurrencyFair, the UK’s Azimo, and WorldRemit (O’Hear, 2015). However, this did not impede TransferWise from strong growth. What is more, having raised $58 million in venture capital funding in January, the company became part of the “Unicorn” club because of its close to $1 billion valuation (Price, 2015b).

How does the global banking industry look like?

Compared with other industries, the banking industry has seen less technological disruptions in the last twenty years (Price, 2015b). Since the last financial crisis however, new technologies have emerged and have started to disrupt traditional banking (Deloitte, 2014). Let’s see how Apple Pay, Google Wallet or other mobile payment services will revolutionize global banking (Marks, 2015).

References:

Deloitte, 2014. 2014 Banking Industry Outlook. Retrieved October 16, 2015, from http://deloitte.wsj.com/cio/2014/02/12/2014-banking-industry-outlook/

Marks, G. (2015, January 1). Why Is Almost No One Using Apple Pay? Retrieved October 16, 2015, from Forbes: http://www.forbes.com/sites/quickerbettertech/2015/06/01/why-is-almost-no-one-using-apple-pay/

O’Hear, S. (2015, February 17). Backed By A16Z, London-Based Money Transfer Startup TransferWise Finally Launches In The U.S. Retrieved October 17, 2015, from TechCrunch: http://techcrunch.com/2015/02/17/crossing-the-money-pond/#.sh9lvz:n1qD

Olson, P. (2015, January 26). Banks Beware: TransferWise Raises $58 Million To Go Global. Retrieved October 16, 2015, from Forbes Tech: http://www.forbes.com/sites/parmyolson/2015/01/26/transferwise-funding-andreessen-banks/

Price, R. (2015, January 26). Here’s How $1 Billion TransferWise Actually Works. Retrieved October 16, 2015, from Business Insider UK: http://uk.businessinsider.com/how-transferwise-works-2015-1

Price, R. (2015b, January 26). Why TransferWise’s $1 Billion Valuation Will Terrify The Banks. Retrieved October 17, 2015, from Business Insider UK: http://uk.businessinsider.com/transferwise-1-billion-fintech-revolution-banks-2015-1

TransferWise. (2015). The clever new way to beat bank fees. Retrieved October 16, 2015, from TransferWise: https://transferwise.com/

Pictures:

http://i.ytimg.com/vi/PntHmOt4dSI/maxresdefault.jp g

https://transferwise.com/

Author: 439328kn – Melanie

Recommendation Systems

In decision-making are recommendation systems important. Customers are able to provide their suggestions to other customers, but also to inform firms about their opinions. This is useful for firms, because firms are able to understand their customers better. This could also lead to more profit, but this is depending on several factors. Is it possible that the recommender systems manipulate the customers? In the articles related to this topic, there is already spoken about word-of-mouth and observational learning. Those could lead to an increase in sales. Recommendation systems will provide customers information about opinions of other customers; this will give them an expectation of how well they will like the product or service. People will be influenced by certain events in their environment when they make a choice. This is related to Word-of-mouth and observational learning. Customers do belief that the recommendation system will provide them the best alternative; therefore they will choose what the recommendation system gives them. This could be useful for firms, because they are able to stimulate the sales of certain products or services. Is it possible to manipulate this? I don’t think so. If customers don’t like products or service, they are nowadays able to let everybody out there now it! Of course, the reliability of the system is important as well. If the system is not known or seen as reliable, the ratings will not be accurate. Therefore this will also been noticed by customers, therefore they will not even belief the ratings.

References

Adomavicius, Gediminas, Jesse Bockstedt, Shawn Curley, and Jingjng Zhang. Do Recommender Systems Manipulate Consumer Preferences? A Study Of Anchoring Effects. SSRN Electronic Journal.

Chen, Y., Wang, Q., and Xie, J. 2011. Online Social Interactions: A Natural Experiment on Word of Mouth versus Observational Learning. Journal of Marketing Research 48(2) 238-254.

Cosley, D., S. Lam, J. Konstanz, and J. Riedl. 2003. Is Seeing Believing? How Recommender Interfaces Affect Users’ Opinions. CHI 2003 Conference, Fort Lauderdale FL (ACM, New York), 585–592.