Article No 3
Media Convergence and Business Ecosystems
Nabyla Daidj, Ph.D.
Telecom Business School, France
Head of Department of Management, Marketing and Strategy
Apple, Google, Microsoft, convergence, diversification, strategic alliance, business ecosystem Abstract
Because the markets in which Apple, Google and Microsoft compete are characterized by rapid technological advances, their ability to compete successfully is dependent on their strategies to ensure the launch of competitive products, services and technologies. This paper focuses on convergence and links with the reconfiguration of value chains in the “new media” sector and diversification strategies adopted by the three companies. As these organizations are made up of different business units, a question arises to how resources and competencies are to be allocated across these businesses. Performance and profitability are determined by an organization’s resources and competencies. The different modes of growth (strategic alliances, partnerships, mergers & acquisitions) and in particular, the emergence of business ecosystems will be analysed. Introduction
Since the beginning of the 1990s, the strategies employed by today’s media and telecommunication companies have led to increased concentration within the industry. In part, this concentration can be explained by worldwide deregulation and privatization trends. This, in turn, has contributed to a decrease in so-called natural monopoly structures. The digitalization and convergence of information and communication technologies (ICT) has also had a significant impact on media business strategy. In addition, the development of digital and interactive technologies has accelerated the erosion of the existing frontiers between the media industries (Peltier, 2004) The result has been the creation of an entirely new set of actors (Internet giants, telecommunications service providers etc.) who now compete directly with many of the established players in the field of media and telecommunications. In this paper, we start with a discussion of convergence. We describe the role of the technological convergence in creating and adding value for such companies as Apple, Google and Microsoft. The goal of this research is to look at how convergence has impacted the business strategy of such companies as Apple, Google and Microsoft. This paper is divided into two parts. Part 1 examines product line strategy. Apple began with the launch of its iPod followed by iTunes (2003) and iPhone in 2007. Microsoft, for its part, entered into the world of videogame technology with the launch of its X-box video game system in 2001. Google is best known for its search engine which has been the catalyst for other technologies and software innovations. Part 2 focuses on convergence with special consideration given to the importance of value chains, the evolution of the different players’ positioning and their related strategies. The different modes of growth (mergers & acquisitions, partnerships and alliance) are at the heart of complex networks between companies leading to the development of business ecosystems. BUILDING COMPETITIVE ADVANTAGES IN A CONVERGENT ENVIRONMENT
In this section, I propose an analytical framework for examining the external factors (mainly the drivers of convergence) that have influenced the strategic choices of Apple, Google and Microsoft by enabling them to compete in a global marketplace. These external factors have reshaped Apple, and Microsoft and their successful efforts to compete with the players of the new economy such as Google. Changes in the information industries
Convergence is a buzz-word (Lind, 2005). Wirth (2006) developed a review of literature underlining the fact that “one of the challenges of studying media convergence is that the concept is so broad that it has multiples meanings” (p. 446). Scholars differ in their opinions on the extent and effect of...
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