The Death of Social Media in Start-Up Companies and the Rise of S-Commerce: Convergence of E-Commerce, Complexity and Social Media

The Business Environment Challenge Of Internal Startups

The internal company startup groups form part of small to mid-size organisations operating in a business as usual (BAU) manner yet the environment in which they operate is changing drastically. For example, the global retail environment is undergoing tremendous pressures from customers purchasing online. In turn, the large retail chains desire to work directly with manufacturers bypassing the distributors to obtain a greater margin. Under this circumstance, the distributor faces total extinction or move to a future state transforming to become a brand owner dealing directly with consumers online (Figure 1). Thus, the distributor bypasses the retailer online and finds creative approaches to working in-store (offline).

Figure 1.

Transforming to brands

In light of this, the distributors failing to transform are unlikely to remain in business over the forthcoming 3 to 5 years. New players as brand owners will replace the distributor of 2012. Software organisations face similar challenges. The software as a service model forces the traditional software supplier to reinvent or die. In the service model the software supplier no longer receives a capital expenditure but an ongoing monthly fee for customer access to the software.