How businesses evolve

It’s useful to understand how over the recent years, big businesses have reinvented themselves. I was reading an article recently on the departing Ericsson CEO Carl-Henric Svanberg, which gave an insightful account of the issues facing Ericsson after the dot-com bubble had burst. His model solely focused around consolidation, whilst others in their market either spread themselves extremely thin in looking for new markets to expand into (see Marconi) or acquired rivals to try and quickly expand (see Alcatel-Lucent). What Carl-Henric Svanberg did with Ericsson was to really consolidate, concentrate on their core business of building networks and inevitably cut costs. This worked, and he now leaves Ericsson today in the healthy position of having 40% of all mobile calls made on their network. I think a lot of companies get excited by the profits and market share available to them when they look outside of their domain. 2 large enterprises who are having mixed results are Google and Cisco. Although Google is still king of search, it’s increasingly more lucrative and more prestigious projects such as Google Books are starting to sap resources from it’s search empire. This has had the effect on competitors like Bing taking more market share.

It was also interesting to see how emerging technologies helped to spur growth in the ailing company. Although a large proportion of their spending is still attributed to legacy networks, opportunities increasingly present themselves to expand into so-called next generation networks. 3G networks are fast becoming their bread and butter, with customers such as Three (3) and T-Mobile in the UK having Ericsson infrastructure to power their data networks. Moving forward, with the advance of M2M, Carl-Henric Svanberg thinks that there is the potential for roughly   sim cards to be embedded into devices as seemingly mundane as fridges, microwaves and washing machines. This is where he envisages Ericsson’s next market shift. There’s no doubting the strength of the mobile data market. Whether it hits a natural saturation period or whether advance such as LTE will help it break through it’s glass ceiling are anyone’s guess. However one thing is certain. Due to the requirement for people to be connected on the move, this is definitely a market that will be key for a long time.

The change in our economy

When I was younger, it was considered the ‘done thing to do’ to go to school and work hard to get a good education to make yourself as attractive as possible for big companies to come and sweep you off your feet. I often remember my teachers preaching to me about how I would need to go to Uni to do a graduate placement with a major organisation so I could guarantee myself financial security for my adulthood. Fast forward 10 years and not even the bigger companies are safe from the turmoil enveloping our economy.

I was fairly lucky in that my dad realised the values of playing the big corporations at their own game, in that he worked for them, worked his way up, learnt as much as he thought necessary and then setup on his own. Now although this was still considered risky back then, there is no doubt that in this day and age, there are numerous benefits to be had, due to the advent of technology available to us. When he setup, he had to leave the security of a well paid job just to gain the knowledge and put together the processes that would last a decade. Now, with the internet, it is possible to passively put the seeds in place to flower into something that can subtly compliment your regular income.

So when did all this change and how? Well there’s no doubt that the advent of the Internet sped up the process. More people were able to find knowledge, funding, clients and expertise within their field to set-up-shop and create a business. Due to the lack of bureaucracy, these companies are more flexible and dynamic, as they are driven by a passionate management group, as opposed to a board sucking out more than they put in. And in this current climate, a company that is driven, dynamic and flexible will stand a lot more chance of weathering the current storm., however long it lasts.

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Introducing……….me!

First and foremost, a big welcome to my little blog

. My hopes for this space are to chart the rise and fall throughout the business world of a young wanna-be businessman.