Applying A 'Chrome' Strategy To Your Own Business

from the the-flip-side-to-Nicholas-Carr dept

Tue, Sep 16th 2008 1:17pm — Mike Masnick

We recently pointed out Nicholas Carr's troubling suggestion that Google was somehow unique in being able to leverage complementary markets to make its core market significantly more valuable. As we pointed out, this shouldn't be unique to Google at all, but should be a key focus for every business out there. Umair Haque has now come along and written what should be seen as the flipside to Carr's piece, looking at how plenty of other businesses can and should leverage complementary markets -- often in extreme ways. As a starting point, he notes how Google's Chrome browser is doing exactly that.

Basically, he starts from the same point as Carr: Google is doing things that don't look to be related to their core business, but those actions significantly influence complementary markets which have the end result of greatly enhancing the core business. Haque sees multiple steps out in terms of how these complementary markets can be applied in many industries, while Carr does not. If the two were playing chess against each other, I'd bet on Haque any day.

For example, Haque throws out a few "radical" suggestions for certain industries:

Imagine what would happen if GM and Ford collaborated to invest in the components and architecture of a better public transport network -- and then licensed it for free to cities, states, and countries.

Imagine what would happen if pharma players directly invested in better hospitals and clinics -- instead of in trying to own the relationship with doctors, and furiously outspending one another when marketing blockbusters.

Imagine what would happen if Wal-Mart invested in town squares and parks -- instead of just in featureless warehouses draining what little vitality remains in already bleak exurbs.

Imagine what would happen if P&G and Unilever invested in people's opportunities for education, global mobility, and meaningful, authentic relationships with others -- instead of just trying to control distribution channels, and then push-market more stuff to you.

Each one of those examples is about radically changing a complementary market, which might not seem to have a direct impact on the primary business, but which would all eventually create a much better primary business -- just as Google is trying to do with Chrome. And, of course, it's not hard to build a framework for how you go about doing this in your own business. It simply requires companies to really understand what business they're in (focusing on the benefits, not the products) and to then understand the complementary markets, recognize how changing those complementary markets shifts around the rest of the market, and then make sure you understand where the money flows if those complementary markets are disrupted.

Google has figured out how to do this quite well, and there are a few other companies who are doing it in less obvious ways -- but there are many more on the way. And, of course, if you want some help in figuring out how to do this in your business, give us a call. We can help.

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Filed Under: business models, complementary markets, economics, efficiencies, nick carr, umair haque
Companies: google

17 Comments

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Anonymous Coward, 16 Sep 2008 @ 2:04pm

"Imagine what would happen if Wal-Mart invested in town squares and parks -- instead of just in featureless warehouses draining what little vitality remains in already bleak exurbs."

I get how this is a radical suggestion. What remains unclear is how this would impact their bottom line outside of public relations. Walmart's business is to sell consumer products. Parks create an aesthletically pleasing environment. Is it proven somewhere that aesthetically pleased consumers buy more goods?

If anything I can see an arguement for happier people needing less material aquisition, thereby decreasing Walmart's market.
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- Mike (profile), 16 Sep 2008 @ 2:09pm
  
  Re:
  What remains unclear is how this would impact their bottom line outside of public relations. Walmart's business is to sell consumer products. Parks create an aesthletically pleasing environment. Is it proven somewhere that aesthetically pleased consumers buy more goods?
  
  Depends on how they did it. First off, a big part of the backlash against WalMart is how they come into a town and pretty much destroy its economic vitality. Helping to improve that could make a big difference. So if WalMarts were seen as improving an overall town, they'd be a lot more welcome than they are now.
  
  Umair may have simplified the idea, but basically the concept was that if WalMart did much more for the local community, counteracting its negative impact, that could lead to a much bigger business.
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  - Norm, 16 Sep 2008 @ 6:39pm
    
    Re: Re:
    Um. Aren't they like the biggest retailer in the country? And you Mike are going to tell them how to improve their business model.
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    - Streaker, 16 Sep 2008 @ 9:23pm
      
      Re: Re: Re:
      Yeah, they employ around 2,000,000 people. That's not including all the peripheral businesses who rely on selling to Walmart.
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    - Mike (profile), 16 Sep 2008 @ 11:04pm
      
      Re: Re: Re:
      Um. Aren't they like the biggest retailer in the country? And you Mike are going to tell them how to improve their business model.
      
      Actually, it was Umair who made the suggestion...
      
      But just because you're big and successful doesn't mean you can't improve. I had no idea that it was somehow not allowed to make suggestions for big companies on how to improve and change with the times.
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- Douglas Gresham, 16 Sep 2008 @ 2:14pm
  
  Re:
  An area that is more aesthetically pleasing should attract people in and of itself - people that Wal-Mart can sell to. It should mean people will prefer to go there than to other places where there are other stores. It's also a good PR exercise.
  
  Anyone else have some others? I'm sure they're there.
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- big picture, 16 Sep 2008 @ 3:58pm
  
  Re:
  It's not about people buying more goods, because it is recognized that there are "Limits to Growth", and limits to consumer material needs. It's about the Zellers (and other) shoppers buying their goods at Wal-Mart, because Wal-Mart gives them a warmer and fuzzier feeling than Zellers (or other stores)
  
  The Wal-Mart visible employment of the elderly and disabled is also part of this "good corporate citizen" thing.
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Cryix, 16 Sep 2008 @ 2:28pm

Hate to focus on one bad example of an otherwise good article, but i seriously doubt that adding in a park is going to do anything to alleviate peoples concerns that walmart will drive out all the local small businesses.

I guess it gives them somewhere to sleep after they lose everything to "rollback prices"?
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Anonymous Coward, 16 Sep 2008 @ 2:34pm

What if the entire park was built around the Walmart in question?

and the parent's could leave their children at the local day-care in the very park?

OR ... what if you could play ball with your kid in the park then buy groceries on the way back?
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JohnC, 16 Sep 2008 @ 2:35pm

Re: Walmart Example
It's not a bad example. It's a radical idea. Radical ideas are just that and require a new perspective. One of WalMarts (many) problems is the resistance they see when trying to move into communities. That community resistance would be lessened if City A sees what WalMart did for City B's parks.

No one is asking what your personal thoughts are about that move, or even what your personal thoughts are about what how you think the community will respond. The bottom line is: it's good business, good PR, and will save money and resources when trying to take over a town.
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JohnG, 16 Sep 2008 @ 3:01pm

RE: Walmart
the main issue here though is that all of these companies are massive companies. It would be nearly impossible for a small shop to tackle something like this because it would most probably have an impact of helping a larger competitor in your region before it would help you
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Gregg, 16 Sep 2008 @ 3:54pm

RE: Walmart
What if instead of a park, it was something that would ultimately help the local businesses, then they would be more welcome. There are many things that can do this. I know, I know, that will hurt the bottom line (it seems that way). But just imagine if the cities that Walmart was in were wealthier, would they not be able to charge more? Helping small businesses that do not compete with Walmart would help business incredible amounts. Just imagine that if the local hardware store had some backing from Walmart, or Walmart remodeled the storefront of the hardware store. I cannot imagine a lot of business would be lost to this store, but it would appear to help the community. It would beautify it (the parks), help business (the hardware store), and give a city more willingness to allow Walmart to move it. A Cheesecake factory will spend 5 million dollars building the beautiful restaurants that we eat in. They will pay this 5 million dollar debt off in 2-3 years. That is one restaurant making 5 million in profits in 2-3 years. Walmart can spend 20 million and pay it off in that same period of time. Can you imagine what 20 million dollars would do to a community of 3,000? It would revitalize it. Even a community of 9,000 (Sarah Palin), would see the benefits of this and welcome Walmart. Bribes, aren't they great?
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Anonymous Coward, 17 Sep 2008 @ 4:14am

walmart will gate the park
forn + GM will eradicate the inner city to serve the burbs,...
everything will serve their self interest.

else?
packrat
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Robert Johnson, 17 Sep 2008 @ 10:25am

Non-exclusive benefits...
Competition is a problem in this idea of developing complimentary markets at no charge. Your competitors benefit from YOUR expenditure of resources to develop a complimentary market.

Ultimately, competition forces companies to accept thin margins, and thin margins aren't conducive to incurring costs (like the costs of developing a complimentary market) that competitors do not incur.

And if YOU'RE doing the hardwork of developing complimentary markets, your competitors don't need to bother to. They can just ride for free.
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- Mike (profile), 17 Sep 2008 @ 11:17am
  
  Re: Non-exclusive benefits...
  And if YOU'RE doing the hardwork of developing complimentary markets, your competitors don't need to bother to. They can just ride for free.
  
  If you understand the market better than they do, and know that you're enlarging the market and are well positioned to get the benefits from that complementary market, this all works out in your favor.
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- chris (profile), 19 Sep 2008 @ 6:51am
  
  Re: Non-exclusive benefits...
  And if YOU'RE doing the hardwork of developing complimentary markets, your competitors don't need to bother to. They can just ride for free.
  
  who cares? a bigger market means more for you, period. which is better, owning 50% of a million dollar a year industry, or owning 25% of a billion dollar a year industry?
  
  better yet, why not work with your competitors to share costs?
  
  example: all the money that microsoft and apple (or AMD and intel) waste on the attack campaigns they wage against each other, why not put those resources into helping reduce education costs?
  
  after all, every kids needs a computer (and a copy of office) when he/she goes off to college, why not fix it so more kids are going off to college than ever before?
  
  the fear that someone might benefit for free from something you do to help yourself is symptomatic of the small minded thinking that is holding the US back.
  
  are you really suggesting that you shouldn't do something to help yourself because it might benefit a competitor too? based on that logic, then your competitors shouldn't help themselves out of fear that they might help you too.
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Professional Lab, 19 Sep 2008 @ 9:44am

Chrome
Thanks for the tips about professionally use of google chrome!
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