In light of the dot-com doldrums, Samsung Economic Research Institute has issued survival strategies garnered from dot-coms that have successfully steered out of the trouble.
SEOUL (Asia Pulse) - Amid the prolonged downturn of dot-coms, a domestic think-tank has introduced 10 survival strategies.
Samsung Economic Research Institute said in a report Wednesday that dot-coms are losing popularity with investors as they have unclear profit models and lack ability to secure funds. Investors should approach dot-coms with a long-term view, and dot-coms should suggest reliable profit models to overcome the difficulties, the institute said.
The following is a list of the 10 survival strategies for dot-coms:
- Expand from B2C to B2B: Dot-coms originally based on B2C e-commerce are expanding into B2B, which is more profitable. eBay which moved from B2C to B2B on a surge of trading among small- and medium-size enterprises is a good example.
- Charge fees: Many online companies are starting to charge fees for services which were once provided free-of-charge. Serome Technology, which had supplied free Dialpad services for subscribers and gained profits from advertisers, recently launched a fee-charging service for business clients to diversify profit sources.
- Integrate online: Forming a joint brand among dot-coms is also a survival strategy. Yahoo adopted search technology from Google to meet 20 million search demands daily. *Combine with Off-line Business
- Extend business to distribution: Some dot-coms are opening offline shops to sell products and heighten advertising effects. B2C e-commerce companies can reduce distribution costs with their own offline shops.
- Start manufacturing: Some companies took brands developed online and created new products. * Restructuring
- Replace CEOs: Replacing a CEO with a more-experienced leader can revise the company's atmosphere. Cisco Systems recruited John Morgridge, former vice president of Honeywell Information Systems and president of GRID Systems, as its new top manager during a 1988 management crisis.
- Downsize and outsource: Cost and expenditures can be reduced through downsizing and outsourcing.
- Secure cash: Stable cash supply is essential. Some utilize funding specialists or sell secret technologies to secure cash. *Globalization
- Branch out abroad/Attract foreign investments: Sometimes a business which is unsuccessful in one country has results somewhere else. Serome Technology said its Dialpad business showed more promise in the United States than in Korea. *Withdrawal
- Sell and rechallenge: Some sell their companies and start new businesses. Kim Jong-hoon, who sold his venture business Yurie Systems to Lucent Technologies for US$1.08 billion in May 1998, is now president of Lucent Technologies' optical fiber networking equipment business. Withdrawing from a business is not a rare strategy in advanced countries and selling shares to large companies can also heighten security.