MAPPING SYSTEMS

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Mapping Systems
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• Knowledge of markets is crucial
• Firms need to map where knowledge exists in
  market systems
• For e-commerce systems need to map where
  knowledge resides
• Reduce information provision costs
• Increase speed of information delivery
• Make information available 24/7
• Provide additional knowledge
• Exploit customisation opportunities

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• Use identified knowledge to implement actions of
• Reducing price/increasing value
• Adding convenience
• Expanding market coverage
• Offering greater product choice
• Both terrestrial and on-line operations need to
  develop market systems maps
• Maps identify knowledge flows
• Maps identify opportunities and threats

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Producer
End User Outlet
End User Market
Suppliers
Intermediary
Competition
FIGURE 41 A CORE SYSTEM
Key Transaction Flows
Knowledge Flows
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End User Market
Car Manufacturer
Generic Market
Core Market
Component Suppliers
Competition Other Car Manufacturers
FIGURE 42 A TERRESTRIAL SYSTEM FOR THE
CONSUMER MARKET FOR CARS
Key Transaction Flows
Knowledge Flows
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• End user market consists of generic and core
  markets
• Core market provides knowledge about customers
  actually purchasing
• Generic market provides knowledge about all
  potential purchasers
• Intermediaries link firms to markets
• In B2B markets companies often service markets
  directly

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• Intermediary needs knowledge to manage logistics
  and operate end user outlets
• Role may be split (e.g. small corner shop
  wholesaler) or combined (e.g. supermarkets)
• Competition offer potential threats from
• Competitive rivalry
• Downstream threat
• Upstream threat
• New entrants
• Substitute shops or services

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• In past suppliers seen as people to be kept at
  arms length to minimise supply costs
• Now realised suppliers have access to knowledge
  that can benefit firm
• Emergence of collaborative supply chains to
  exchange mutually beneficial knowledge
• E-commerce has had significant impact on
  knowledge flows and operations within core markets

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• On-line real time knowledge exchange can upgrade
  effectiveness of logistics and distribution
• In theory removal of players (Disintermediation)
  can occur
• Example of airlines removing travel agents by
  creating own ticket selling web sites
• Growing evidence that many intermediaries will
  survive but roles will undergo change

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• Intermediaries role more focused on exploiting
  localised knowledge to optimise service provision
• Intermediaries also have knowledge about best
  ways of sourcing numerous products
• Surrounding core is macroenvironment containing
  generic variables than can impact business
• Firm needs knowledge of macroenvironmental trends
  to manage opportunities and threats

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• Knowledge of how economic conditions can
  stimulate or damage sales revenue
• Understand market impact of political manifestos
  (e.g. Whether a party is pro expansion of
  private/public sector partnerships)
• Legislation can have impact on both customers and
  directly upon business
• Need to monitor legislation in development and
  prepare for implementation

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• Technology from outside core market is difficult
  to track but can have massive impact (e.g. advent
  of e-commerce in retailing)
• Culture represents prevailing attitudes and
  behaviour of customer
• Early identification can be opportunity, late
  recognition a threat (e.g. healthy living trends
  impact on fast food sector)