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#Written by David Tam, 1996. #
#davidkftam@netscape.net Copyright 1999#
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David Tam
Tuesday, October 2, 1996.
Business Press Review
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Rigdon, Joan Indiana. "Intranet ignites Netscape". The Globe and Mail.
Friday, September 27, 1996. B9. ------------------
Netscape is shifting its initial marketing focus from the internet to the
lucrative corporate intranets. In Netscape's initial company launch, it barely
paid attention of the potential of the intranet market. That area wasn't as
well-developed or publicized as it is now. Instead, they focused on electronic
commerce over the internet. This decision to shift focus was made based on
feedback from customers, distributers, and on-going market research. Most
people use the software to distribute information within a company network, not
to set up internet sites. In fact, 80 % of Netscape's revenue comes from
companies using the software to set up corporate intranets. To further support
the change, Forrester Research Inc. estimates that the internet software market
will grow to $8.5 billion US by 1999, with most of the growth occurring in the
intranet market. One major effect of the change is Netscape's development of a
suggested intranet programming standard called Netscape ONE. Another effect
was that in June, Netscape began shipping a bundled intranet package called
SuiteSpot, to meet customer needs.
These major changes in business strategy show how a company can guess wrong
about the market. When the founders of Netscape started the company, they had
a piece of technology they wanted to sell. They invisioned that this new
technology would be used for electronic commerce over the internet. This
vision was what they had based their business strategy on. However, they were
wrong. Most people used the technology to distribute information on their
private corporate networks (intranets). Even though this was the trend, the
founders were not fully convinced on shifting the business strategy to suit the
market. It wasn't until January that they finally decided to take action.
They could have made this decision much earlier if they had not allowed
emotions to affect their decision-making process. The lesson to be learned
from this article is that entrepreneurs must get feedback from its customers
and make rational decisions upon them. This is much easier said than done.
Entrepreneurs who start a business are usually so determined on achieving their
initial goals that they do not allow for any changes to them. However,
entrepreneurs must keep in mind that they must focus on the vertical market,
specializing in their market niche. From our guest lecturer, Mr. Bassel
Annab, we have learned that small startup companies should not diversify
immediately because things can get too big too quickly. Small startups should
focus vertically on their market niche and become the best in that niche.
Diversification is only an option for giant sized companies. These comments
should be kept in mind when the need to changing business strategies is evident.
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