Do Business Well

If your company developed a new operating system and software platform that became the world’s de facto standard in the field, gaining you a market share three times larger than that of your nearest rival, you would probably be pleased. If your new product earned cult status, won award after award, sold 7 million units in the four years following its release, causing industry analysts to predict a 40 percent earning growth rate for the next several years, you would probably be elated. That is, unless you’re Palm, Inc., the world’s leading provider of personal handheld computing devices (also referred to as personal digital assistants or PDAs).

Palm’s sleek electronic organizers took off faster than color TVs, cell phones, and CD players, and now account for approximately 70 percent of the worldwide market, but nipping at the company’s heels is its key rival, Microsoft, whose PocketPC operating system (a modified version of Windows CE) was chosen by Hewlett-Packard to drive its Jornado, by Compaq for its iPAQ, and by Casio and Siemens for devices that will compete with Palm’s. Continue Reading »

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From the delegator’s point of view, AOL operates in its industry—as an Internet service provider—in the same way that Carnival operates in its, as a vacation provider. Each preselects the destinations and puts together a package of offerings that can be bought all at once. For both, after the decision and initial arrangements are made, no further thought or maintenance is required. According to Forrester, a leading market-research firm, four out of every ten people active on the Internet in 1999 were using AOL. Furthermore, AOL retains 97 percent of its customers, the highest rate of any Internet service provider. For all of AOL’s blackouts and delays, its slow pop-up ads, and even a short-lived scheme to sell customers‘ phone numbers, only 3 percent walk away.

Part of the reason for such loyalty comes from the stickiness inherent in delegators: Once a delegator makes a decision, he or she tends to revisit it rarely. Continue Reading »

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Most consumers in delegation mode are following the first of the four basic strategies: Let someone else shop for, select, and buy a particular product or service. The responsibilities of a delegated personal shopper include, but go beyond, selecting and buying. The supplier becomes involved in various activities on behalf of its customer, and has to be skilled at one, sourcing, that is, locating suitable offerings; two, negotiating, particularly on price; three, bundling and prepackaging solutions, meaning putting together the pieces of the desirable package; and four, seamlessly managing the delivery of the goods to the customer.

A prime example of the first strategy is the intent of the cruise vacation—a delegator’s dream of one-stop shopping, requiring just one decision and one payment. Once the reservation is made and paid for, everything is taken care of: voyage, cabin, meals, entertainment, and activities for kids. The vacationer’s only added expense is souvenirs and cocktails; her biggest decision is whether to work out in the ship’s gym or visit the casino. Continue Reading »

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