Azuddin Jud Ismail - K-economy - Ict As An Industry

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“ICT as an Industry” (ICT-I) Azuddin Jud Haji Ismail

Objective of the Pre-meeting Brief The Material provided here will help you to prepare for the break-out group discussions during the Focus Group discussion on Digital Melaka 2009. Specifically, it will assist in identifying suitable niche areas for Melaka MSC Malaysia to focus on in the near future in order to help Malaysia

Selection Criteria for Niche Areas Attractivenes s of the niche areas ‘the Multiplier Effect of investing in this niche area’

Melaka MSC Malaysia’s strengths

Selection Criteria for Niche Areas

Whether the selected niche area is ‘head pin’ or ‘corner pin’

Melaka MSC Malaysia’s ability to dominate selected niche area

Selection Criteria for Niche Area: 1. Attractiveness of the Niche Area What is the Market size? Is it a Global, a regional or a Domestic market? What is the annual Growth Rate? Is it a Sunset or a Sunrise industry? [Wikipedia’s definitions] •A sunrise industry is one that is new or relatively news, is growing fast and is expected to become important in the future What are the Profit Margins? Is there an ample supply of Human resource to support it?

Selection Criteria for Niche Area: of the Niche 1. Attractiveness Area 6. Porter’s 5 Force

• • • •

The threat of substitute products The threat of the entry of new competitors The intensity of competitive rivalry The bargaining power of suppliers

[Background (Wikipedia): Porter’s five forces analysis is a framework for the industry analysis and business strategy development developed by Michael B. Porter of Harvard Business School. It uses concepts developed in Industrial Organization (IO) economics to derive five force which determine the competitive intensity and therefore attractiveness of a market

Selection Criteria for Niche Area: Leadership & Coordination

Infrastructure & Infostructure

Technology availability

2. Melaka MSC Malaysia’s Strengths. Does Melaka MSC Malaysia have the following items to develop and sustains the niche areas:

Policy / Legislation

Availability of Critical mass (Supply) •Number of companies •Number of Intellectual Properties •Number of human resources •Number of reference customers

Adequate skilled Human resources

Selection Criteria for Niche Area:

3. Melaka

MSC Malaysia’s Ability To Dominate Selected Niche Area. Will Melaka MSC Malaysia be able to grow and stand out in the selected niche area? In other words, can it dominate and influence the niche area?

Bowling Pin Strategy To Cross The Chasm 1.Establish a beachhead with a niche whole product: In order to provide a complete solution for a specific niche market, MSC Malaysia status companies need to leverage on their existing core competence/core technology/competitive advantage, recruit partners to fill gaps and deepen the understanding of niche requirements

2. Leverage to adjacent markets or products- the bowling pin refers to a complete solution which matches a specific application to a niche segment. MSC Malaysia status companies should aim to choose a market niche which is their own size and grow the market share within. the companies should target business sponsors and user, not just technologists. IT managers are typical pragmatists and tend to choose existing dominant players.

3. Continued extending until the main market tornado starts : This is the point when the chasm is cross. Sometimes, the niche areas do not develop into mainstream markets but it will still provide lucrative margins to the dominant players in the niches

Selection Criteria for Niche Area: 4. Whether

selected niche area is head pin or corner pin

Corner Pin Head Pin

Perfect Strike

Selection Criteria for Niche Area:

5. The

multipliers effect of the investing in this niche area The multiplier effect refers to the idea that the initial amount of money spent by the government leads to an even greater increase in rational income. In other words, an initial change in aggregate output for the economy that is multiple of the initial change. [Wikipedia’s Definition]

What is the Multiplier Effect to Melaka MSC Malaysia when investing in this niche area?