DB - Globalisation and Increasing Competition:

Think about the following types of firms. How will the 21st-century competitive landscape affect them and their operations during
the next five years? Think about in particular how the Internet may affect these businesses, how the changing world demographics
may affect these businesses, and how the diffusion of computer ownership may affect these businesses.

 Fast-food restaurant chain

 Clothing retailer
 Medical provider (hospital)
 Bank
 Academic institution (college or university)

The Internet has and will continue to change the way we live. In the last nine years, the number of internet users worldwide has
increased by 380% (World Internet Users and Population Statistics) In a separate study conducted by Nielsen, the number of
Internet shoppers has increased by 40% in the last two years alone. (World Statistics on the number of Internet Users). The same
study revealed that the following:

Top Five Countries That Shop online are: The most popular and purchased items are:

1. South Korea (99%) 1. Books (41% purchased in the past three months
2. UK (97%) 2. Clothing/Accessories/Shoes (36%)
3. Germany (97%) 3. Videos / DVDs / Games (24%)
4. Japan (97%) 4. Airline Tickets (24%)
5. US (94%) 5. Electronic Equipment (23%)

The Internet has also become a venue for learning about consumer rights as well as comparing items at the click of a button. In
addition to the Internet, advances in mobile-based applications have made the mobile phone not just a communications tool but a
tool for shopping, banking and even viral marketing on sites such as Tweeter and Facebook.

Business Process Outsourcing is an industry that owes its existence to the advances in telecommunications and web-based
applications. In the Philippines alone, the BPO industry earned P94.4 billion (US$190 million) in combined revenues last year.
(BPO Firms rake in 94-B Profit)

 The internet will continue to grow as a selling channel in terms of fast-food delivery. With the fusion of
mobile and computer technologies, people will be able to order food not just on-line but wherever they may
be. Kenny Rogers Roasters (Philippines) and Papa John’s are just some of the many fast-food chains which
now offer online transactions.

Fast-Food  There is a growing resurgence on Health Consciousness over the past couple of years. Fast Food restaurants
Restaurant have been criticized for not offering/offering limited choices of healthier food items. An example I like to use
Chain is that of McDonalds. In the US, McDonalds has started offering items such as turkey breast sandwiches,
salads etc. as well as providing nutritional information on their items. I can foresee that in the near future,
when you order your food – you will be able to know how many calories you are actually consuming.

 Customer Databases will be an important tool in understanding what is important to the customer. Not only
will these databases hold information such as preferred food items, but household size, average spending etc.
 Figure 1 - Kenny Rogers Philippines Website www.kennys.com.ph

Figure 2 - Papa John's Website showing countries where Online Ordering is offered (www.papajohns.com)
  Brick and Click selling channels have become the norm for many international brands such as GAP, Banana Republic,
Levis, and Mango. As more people do their shopping online, having an online presence is a must.

 Geographically, there are some hindrances for people to shop online. As an example, while you can find items at
www.bananarepublic.com cheaper than going to the boutique here in Manila, deliveries are only available to US or FPO
addresses. Not being able to fully serve international customers due to limited or lack of resources can mean losing out on a
lucrative segment searching for apparel that is not available locally.

While researching on how international retailers are working around this, I came across an article that introduced a company
Clothing Retailer called International Checkout. International Checkout handles orders for international brands like Bebe, Dr. Martens and
Organize.com. (Sales Boosting Technologies) Effectively, International Checkout acts like the middle man between
customer and clothing brand.

 Mortar stores connected to a network will be able to check if a specific item is available at another branch – reserve it for the
customer to pick up at a specified time/date or have it delivered for the customer to pick up

 In terms of demographics, the emergence of the market segment known as “tweeners” (8-14 years old) have become a
lucrative age group targeted by companies that have anything and everything to do with this segment (fashion, gadgets like
mobile phones, MP3s, music etc.) According to the Boston Globe, this segment spends about US$30billion of their own
money every year. (Disney Taps Wants, Wallets of ‘Tweens, 2008). Just take a look at Hannah Montana, the Jonas Brothers,
the Cheetah Girls, High School Musical, the Twilight Series etc.

Figure 3 - Online Shopping at bananarepublicgap.com

 Certain procedures such as interpretation of x-rays, medical transcription have been outsourced to a third company.

 Facilities such as video conferencing from companies like Tandberg or Cisco telepresence can link doctors to one
 another to study medical cases, assist in surgical procedures and even provide medical care to patients in remote areas.

Medical Provider  Some hospitals have started using the web to manage out-patient care such as online referrals like Cedars-Sinai in Los
Angeles, California. Other hospitals or Health Clinics have used the Internet in scheduling appointments and even
tracking and monitoring heart rate by a device that sends information to a computer via wireless technology.

 An innovative idea which may or may not have yet been perfected would be using the mobile phones to monitor a
person daily nutritional intake by asking them to SMS what they eat to a certain number which will then compute the
equivalent calories/fat of what they consume.

Figure 4 - Cedars-Sinai Hospital's Physician Referral Program (referrals.cedars-sinai.edu)

 Customer Assistance, Credit Collection services will be continue to be outsourced

Bank
 Banking services done at traditional branches will be automated as online and mobile banking services are introduced

 Cashless transactions through mobile phones, credit/debit cards will become prevalent. A good example is Hong
Kong’s Octopus card which allows you to pay for fares on the Metro, bus, ferry, pay for groceries or food – all in one
card

 Distance learning will increase in popularity and the schools who can offer this will be able to tap professionals who
Academic Institution could not pursue undergraduate/graduate degrees due to geographic distances or because their working schedule did not
permit them to attend classes

 Video classrooms will be made possible through inexpensive teleconferencing and allow for real-time interaction
between Professor and students who reside in different parts of the globe

 Academic research advances will be made as communication technologies become more advanced and inexpensive to
 use enabling researchers from different parts of the Globe to exchange information and ideas

Sources:

Disney Taps Wants, Wallets of Tweens. Joanna Weiss. The Boston Globe Viewed November 23, 2009 from
www.boston.com/ae/tv/articles/2006/11/06/disney_taps_wants_wallets_of_tweens

World Internet Usage and Population Statistics. Viewed November 23, 2009 from http://www.internetworldstats.com/stats.html

World Statistics on the number of Internet Shoppers. Sante J. Achille Viewed November 23, 2009 from http://www.multilingual-
search.com/world-statistics-on-the-number-of-internet-shoppers

BPO Firms rake in 94-B Profit. Kevin Calimag. Manila Bulletin. Viewed 25 November , 2009 from
http://www.mb.com.ph/articles/228573/bpo-firms-rake-p94b-profit

Sales Boosting Technologies. Viewed November 23 2009 from www.internetretailer.com