Frenemies and Knotted Value Chains

Hari Harikrishnan
Jan 31, 2017 · 4 min read
Frenemies tied the knot

Tying the Knot: Netflix and Comcast

Over a decade, Netflix evolved from a mere physical (postal) distributor of content, to an over-the-top (OTT) content distributor, and to a vertically integrated player across the content value chain to create, curate, and deliver content. Meanwhile Comcast was down a similar path, busy buying NBC and investing in content providers.

Frenemies Tying the Knot

Digitization is offering up many ways to integrate offerings from different players at any point in the value chain all the way to the point of consumption.

Simply put, value chains have become knotted. The ability to digitally mash-up offerings is accelerating this trend.

We see this in the XfiniFlex dance. We are going to see many more such mash-ups of offerings in the next few years. (A DirecTV and Netflix combo may end up being called FlixDirect, especially if AT&T doesn’t succeed in its Time Warner bid).

Frenemies Galore

Where else has this frenemy effect happened? Last year AirBnB started placing small hotel chains alongside their home listings homes. Another analog business found itself placed inside a digital service!

Analog and Digital Tie the Knot

Frenemies in Hi-Tech

The frenemy effect is not limited to brick-and-mortar and its digital twins. In the high-tech sector, Amazon Web Services and VMware announced partnership to provide VMware’s wares as a service. A cloud service wrapped around another cloud service is not big news in the hi-tech world. However, comparable cloud offerings where one is presented inside another provider’s market place is yet another example of the frenemy effect.

Frenemies Galore Across Industries

Digital firms aren’t always eating their analog (brick-and-mortar) twins. The analog firms are morphing and co-existing.

Job Role Evolution in the Knotted World

What does frenemy effect mean for product and channel professionals? Do formulaic channel strategies from vendors (“I build, you sell”) have a place? Will frenemy effect be part of the product development strategies? Will creative alliances will be part of the offer development strategy itself? Will a mash-up of job skills be needed? Will channel management and alliance management skill sets that were previously separate from product development become part of the development process? What do you think about these role evolutions?

The Cerebrus

Digital | Business | Strategy

Hari Harikrishnan

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Bridging the chasm between cure and care using technology for a healthy society. #Digitization #Internet of Things #Design.

The Cerebrus

Digital | Business | Strategy