The Mesh - Lisa Gansky [53]
Netflix also included ratings and reviews from newspaper critics and customers. Over time, more social networking functions were built in to allow friends to suggest movies to each other. The Web site encouraged customer feedback on improving the service, and continually introduced new tools to make it easier to find, rate, and order movies and TV shows. Rather than conducting expensive national advertising campaigns, Netflix created partnerships with nearly every brand of DVD player. Each new player included a card offering three free DVD rentals from Netflix. The card also made a promise: “No Late Fees.”
Instead, Blockbuster paid a late fee. They were late in acknowledging customer resentments, and late in understanding the spreading power of social networks to shape brand perception. They created a share platform, but neglected other elements that make Mesh businesses so competitive. Netflix’s more robust and networked share platform gave it the power to collect and crunch consumer, usage, and product data to shape customized offers. Its service is delivered locally, but spread through social networks, partnerships, and word of mouth. With its more nuanced knowledge of customer preferences and its culture of innovation and trial, Netflix can rapidly adapt offers to particular communities and markets. These are classic Mesh advantages. And in a business blink of the eye, Netflix replaced Blockbuster as the dominant player in the category. In the future, the byword will be “convergence”—of TV, the Internet, and mobile devices. Netflix remains well positioned to compete in that arena as a sophisticated information company with a trusted brand.
Data-Rich, Highly Shareable Goods and Services Mesh Best.
five flavors of the big Mesh.
Not all large companies can adopt a Mesh strategy as thoroughly and successfully as Netflix. Many can, will, and have adopted aspects of the Mesh where they’re able to perceive the competitive advantages. Here are five ways:
1. Provide services or platforms that enable and encourage Mesh businesses. We’ve already discussed several, such as Amazon Web Services, PayPal, and FedEx. Like many other companies, the streaming music service Pandora extends its service through an iPhone app. The iPad, Kindle, and Kno are strong new platforms for distributing e-books, blogs, video, and magazines. These services are likely to be reshaped in even more favorable ways by the Mesh as it grows. A very important category of Mesh-enablers is the social networks, such as Twitter, Buzz, MySpace, LinkedIn, and Facebook.
2. Leverage physical assets, both products and materials, as share platforms. Ask: How can I get a better yield from the physical assets we own, including the materials that go into our products? How can I turn waste into value? Mesh share strategies enable companies to extract more use, and more profit, from their products more of the time.
3. Truly engage partners by mutually sharing resources and information—including customer feedback and other data on their preferences—that enable better designed, more timely, and more relevant products and services. As Better Place demonstrates, the most important innovations often can’t be done alone.
4. Integrate the supply chain, in forward and reverse. Tight integration of a distributed (not vertically integrated) supply chain increases efficiencies of cost and time. It often improves the quality of raw materials, and the product or service to be integrated. Walmart