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April 20, 1998. Leveraging Globalization and Convergence to Win

Author: Dr. Augustine Fou, Marketing Science, Inc.

On April 15-16, New York City played host to the executive conference and showcase, "The International Business of New Media: HIGHLIGHT QUEBEC," where participants collaborated to create new knowledge, raise awareness about the vibrant new media community in Quebec, and learn about incentives to explore cross-border investments, partnerships, and business opportunities. As a first step in developing interactions and relationships between the new media communities in Quebec and the U.S., the conference welcomed nearly 40 Quebec multimedia and new media companies, associations, and government officials; press members; U.S. corporations; venture capital firms; and Silicon Alley representatives.

During the two-day event participants took part in presentations, panel discussions, a technology showcase, and executive roundtable sessions, formulating perspectives on issues like globalization, convergence, and strategic partnerships. Some key concepts are captured and reviewed here in this short article. We will see that the Internet has both enabled and necessitated "globalization" and "convergence." These two forces in turn require that companies innovate and evolve even more rapidly to stay alive, let alone stay competitive.

Globalization: Presenting New Challenges and Opportunities

Because of its open standards, the Internet has opened up the world to big companies and small companies alike. In this "brave new world" where individuals can "publish" to anyone around the world by putting up a website, where even the smallest companies can sell things to customers around the world using e-commerce, and where large companies face new global competition, entire industries are being shaken up. Traditionally entrenched "players" in any industry are being challenged by small companies who are more agile, more innovative, more efficient, and more aggressive in developing new markets.

We are going through what is essentially a major technological "discontinuity" (in business school terms) which lays the groundwork for the establishment of a new economy, namely, the information economy. Because of the very nature of information as a commodity, namely, 1) irrevocable once given, 2) transmittable in multiple forms over multiple media, and 3) both global and local at the same time, this new economy presents significant new business challenges that were not present in the agricultural and industrial economies. In this new economy, it is ever more a game of who has the most accurate information, in the most timely manner, and delivered in the most relevant and useful form. The Internet, which is fundamentally a communications medium, is enabling more efficient and "frictionless" transmission of information, thus "cranking up" the speed at which companies must evolve and innovate to stay competitive. Furthermore, by its own example, the Internet has demonstrated that distributed collaborative work and the reduction of traditional barriers to entry such as information asymmetry have necessitated unprecedented speeds of innovation and evolution.

In "globalization," companies must now deal with unfamiliar markets, customers they have never met, and sometimes difficult cultural barriers. One way of managing or conquering these new challenges is to leverage local partners who are familiar with the marketspace dynamics and customers.

Convergence: Changing what companies must do to stay competitive.

In addition to the challenges that globalization presents, the "convergence" of media types, technologies, and industries also changes the game for many businesses. The Internet takes on characteristics from many other industries, like the advertising industry; publishing, entertainment, retail, education, etc. Furthermore, the Internet also drives the convergence of technologies (e.g. radio broadcasts over the Internet with streaming audio; international phone calls using IP telephony; Internet access through TVs, etc.) Given "convergence," any company would be hard-pressed to know enough and have enough experience across diverse industries and technologies to stay competitive. Again, this points to our hypothesis that companies need to collaborate with others and partner for those specialized skills and talents that are not their core competence. They will focus on what they do best while leveraging what other companies do best. Thus we can say that companies are specializing AND diversifying simultaneously to meet the demands of the marketplace and the new economics.

Collaboration: Enabling specialization and diversification, simultaneously.

Both "globalization" and "convergence" point to using collaboration as a formal business practice that enables companies to innovate and evolve rapidly, while specializing in their core competence and diversifying to offer more services to ever more demanding customers. In theory any company can go out and partner for the skills they lack or need. However, the challenges of truly effective collaboration are many. For example, in the competitive business environment of capitalistic society, few companies dare to even discuss cooperation. Second, the increasing speed of innovation requires companies to find new ways of "running" faster. Collaboration, which involves the opinions of many, may seem inefficient. Third, in a field as young as new media, no company can possibly hire all the talent they need in-house or embody all the knowledge necessary. Therefore, collaboration means reaching beyond the traditional boundaries of a corporation to work with other companies or individuals in formal or informal virtual networks, yet another challenge for efficient collaboration. The paradigm of the Internet itself, "distributed collaborative work;" may serve as a good example for companies (i.e. the phenomenon of the Internet was built by the efforts of millions of individuals not by one single company). Finally, it is difficult to reconcile this compelling need to collaborate with the deep-rooted competitiveness of capitalistic economies. However, companies that are seeking to make more money for themselves should see collaboration as a way to create a larger "pie" for which they compete to get a larger share.


Real competitive advantage is grounded in the efficient execution and formalization of these business processes and practices. The companies that embrace globalization most aggressively and build partnerships with local firms to access new customers, skills, and know-how will give themselves competitive advantage, leveraging "globalization." The companies that embrace convergence most aggressively and build processes to work with other companies for specialized skills and talent will give themselves competitive advantage, leveraging "convergence." Finally, those companies who are most progressive in adopting new technologies, thinking outside the box, adopting new paradigms of business, will make the execution more efficient and fast. And in this brave new world that is at once enabled and necessitated by the Internet, those companies that can execute better than others will be the ones who can take advantage of all of the new opportunities that are created by globalization and convergence.

Dr. Augustine Fou is President and CEO of Marketing Science Internet Consulting Group, Inc. (www.Marketing Leveraging his background from MIT and McKinsey & Company, he leads Marketing Science in providing clients with Internet strategy consulting and implementation management, developing long term strategies for using the Internet as a competitive business tool. HIGHLIGHT QUEBEC was produced in collaboration with the Quebec Government House, New York, Quebec's chief representative office in the United States that promotes awareness of Quebec's many attributes in the areas of trade, investment, the arts, culture and education; and CESAM Multimedia Consortium, a non-profit organization in Montreal offering services and information that promote the emergence and growth of multimedia and new media firms.