Must say, this may be my favorite reading of the semester. It was one of those cases you read when throughout the case, you go back and forth thinking "They should go for it..." and then 2 pages later think "Oh no, definitely don't go for it". And it put our all of our discussions of social media strategy in real life context.
So after much internal debate, I believe Ms. Hessan should not go forward with the Simmon's WOM campaign. I tend to be a pretty risk adverse businesswoman (for better or worse), and think in this case, the risks far outweigh the rewards. Given that WOM is not one of their core competencies, they risk having the campaign failing, and potentially, at the expense of what they do know how to do (engage communities). Further, they risk having the campaign fail for a client they have very much sought after, for a product that is critical to the company and the client is dependent on to prove herself - this is a lot of pressure for launching an initiative that's never been tried before. They also risk their reputation as a place that engages communities to generate insights and the transparency values they've built up. The rewards would be successfully entering a new market, yet they have much ground to cover still in their current market.
Social media, as we've learned, is constantly changing. I don't believe this is their only chance at entering a new field. Opportunities like this one will come up again, and better to do it when they've all come to the decision that it is time and they have the resources to do it.
What do you think? It's 4th down, 2 minutes on the clock, down by 3. Field goal to tie it or go for the win? And on that note, Pats or Vikings? :)
I feel that companies have to always be willing to try new things, yet at the same time its not good to shy away from what brought the company their success. I would have stuck to the basic companies which was what brought Communispace their profits and I would have launched a mini WOM campaign and observed how it did.
ReplyDeleteMaria,
ReplyDeleteI had the same experience with you. I started off thinking "why wouldnt they go for it" and within minutes i thought "maybe they shouldn't go for it" and i flopped back and forth from start to finish. I still haven't come up with a clear conclusion about what should be done. I agree that there is a lot at risk, but I don't know if it outweighs the benefits that could come from accepting the campaign. I hadn't considered the point you made about more of these opportunities arising, so with that in mind, i may be leaning with you more toward not accepting Simmons' request for a WOM campaign. I am interested to see what they decided to do!
I agree that the case was presented in a way that really caused an internal debate, as I am sure HBR intends given the context, but at the end of the day I think this is a yes for Communispace (to start the WOM campaign for Simmons). And I think this is true for many of the reasons you mentioned: this is a very much sought after client and it is for a product that is critical to the company. Who's to say this potential client would give them another chance if they say no? And even though they may have a little to lose if it’s a failure, don’t they have a lot to gain if its not? Simons could be an enormous customer of theirs, not to mention they could then point to this campaign as a success story in their new WOM product campaign to other customers!
ReplyDeleteEntrepreneurs with businesses like Communispace cannot afford to shy away from opportunities like this in my opinion.
I agree with you Maria. At this point in their development I think that Communispace should wait, continue to grow in their current niche, and then build out. Diversification is usually a good thing for a company. However, if trying to diversify distracts from an already profitable business line then the company could lose more than it stands to gain.
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