Business value context

Compelling and appealing, uniqueness, ease of use, storytelling, quality, reliability, informational experience, and seamlessness are core values attributed to Qwiki. With the launch of QM and termination of the QC and QR iPad, Qwiki’s vision and mission is to focus on personal content creation through storytelling analogies on mobile devices. The following analysis is based on what Fenn &

Raskino (2008) call the corporate core and consists of value discipline, core competence, value curve, and persistent business need. The purpose of this analysis is to determine Qwiki’s business value context.

78 13.1.2.1 Value discipline

Treacy & Wiersema (1997) developed three different value disciplines: operational excellence, product leadership, and customer intimacy, that businesses can pursue which determines and defines a business’s overall competitive strategy approach. Excelling equally in all three disciplines is not ideal as the trade-offs between the disciplines counteracts each other. Any company must choose one discipline approach and act upon it consistently and vigorously.

Operational excellence

In the operational excellence value approach, the focus is directed towards outstanding production and delivery of products and services and providing good quality at a low price through streamlined operation and volume counts. Companies adopting this approach are not product or service innovators, and do not cultivate one-to-one relationships with their customers.

Qwiki focuses on highly innovative products – as they have demonstrated with their three different products, QR, QC, and QM – and has a healthy and close relationship with their active users through their social media sites and invitations to early release tests. In some respects, Qwiki pursues an operational excellence approach by offering free products of superb quality and innovative functionality. In the digital world with intangible products and services e.g. for smartphones/devices, it can be difficult to determine whether a company pursues an operational excellence approach. Apps and other intangible products are produced once and do not have an analog to the traditional manufacturing world, where products are repeatedly produced which incurs costs for every unit produced. Although apps are continuously updated to introduce improvements and fixe software bugs, operational excellence is hard to determine where productions are not repeated. An analog to the app and/or web-based product industry could be where apps and online products are smooth, easy to use, seamless, reliable, and stabile; i.e. outperforms competitors’ applications. If this analog was to be applied to Qwiki, they would have some operational excellence characteristics, but they are very innovative and cultivate close relationships with their users and partners.

Product leadership

The product leadership approach focuses on creativity, product innovation, market exploitation, entrepreneurial initiatives, out-of-the-box thinking, and are driven by a desire to shape the future. Time-to-market, fast commercialization, and high profit margins are also important factors.

Despite not joining the “Instagram for video”-race, Qwiki’s focus has always been on revitalizing and revolutionizing the way people consume information and share experiences. Qwiki is not interested

79 in pursuing a fast time-to-market approach, and have not demonstrated the ability to commercialize or generate revenues from any of its products. The people at Qwiki are visionaries and on a mission to change the way we consume, create, and interact with information which they also illustrated with their last product, the QM. They are truly entrepreneurs and adopt many aspects of the product leadership approach with their creativity and out-of-the-box thinking, charting of unexplored territories, and desire to shape the future towards the “information experience”. Qwiki is not a large player, it is a young company, but this might very well change in the near future.

Customer intimacy

The customer intimacy approach focuses on customized solutions for their many different customers with many different needs and problems. Close bonds are forged with the customers to deliver value to the individual customers and not the market.

In relation to the customer interface component of Qwiki’s business model, it is actively pursuing an intimate relationship with its users and partners, but it does not segment and distinguish between its users different wants and needs. The interaction functions as a way to nurse and maintain the users and gain access to valuable feedback so to understand the overall market needs. The products are not tailored to individual and specific needs, though customization is an option in the QM product. Qwiki is not pursuing the value discipline approach of customer intimacy. They specifically target predefined segment that shares mutual needs and problem.

Figure 13, visually depicts Qwiki’s value discipline approach. It leans up against a product leadership approach, since all products have been innovative due to the creative thinking. This indicates that innovation candidates that are relevant to Qwiki are the ones that impact their products in innovative ways so that Qwiki differentiate substantially from the competitors. Their day-to-day operation are not formalized, repeated and structured, they are driven

by visions of the information experience i.e. innovation candidates that improve operational excellence are not among the most relevant. The same is true for innovations that foster more customer intimacy since they do not target individual customers with different needs.

Figure 13 - Value discipline and Qwiki position

80 Core competences

The concept of core competence is to define the skills that contributed to the overall value propositions of the business. Qwiki’s core competence is the way they excel at understanding, packaging, and compiling information and content into an interactive and seamless experience. As stated in the theory section, core competences must fulfill three criteria that state that they; must not be easily imitated, can be reused in different products and markets, and must contribute to the customers perceived benefit. Qwiki’s core competence fulfills these criteria;

 Imitation: there are many different products and services available that create a mash-up of photo, video, and textual content, but no one have yet been able to offer a “me-too” product that resembles any of Qwiki’s products, despite their début with the QR over three years ago. The way Qwiki packages and formats information from different sources is very unique and not very easy to imitate.

 Reusability: It is easy to see how the uniqueness of this competence has been the vital component of all of their three products. The common denominator is the packaging of non-interactive information and content from various sources into an non-interactive video stream or story.

 Customer benefit: The novelty and uniqueness of Qwiki products have made it enjoyable and easy for users to get topical information and tell stories. Each product has raised compelling wow-effects, been very appealing, and contributed to a great experience.

As mentioned in Analysis part I, the app industry regarding photo and video content editing, mash-up, and sharing is currently accelerating, this is especially true for the video-based initiatives due to the technological preconditions maturity (i.e. storage and bandwidth). Qwiki’s newest product can have a great impact on user behaviors and the market for the video-based content creation in the near future enabled by their core competence. The value discipline analysis showed that their approach toward a product leadership should focus on innovations for differentiating and revolutionizing their products.

The core competence analysis supports this claim by stating that Qwiki should focus on innovations that further improves and strengthens their core competence of information and content consumption and creation. And this competence is what gives Qwiki’s products a competitive edge and provides the core value in their value proposition.

81 13.1.2.2 Value curve

When Kim and Mauborgne (2005) published the “Blue ocean strategy”, they wanted to offer means for companies to win without competing by addressing the importance of disruptive value proposition innovation. The concept refers to jumping into the uncontested market space (or “Blue Ocean”) instead of competing head-to-head with competitors in an existing industry (the “Red Ocean”) where the competitive rules of the game are well known. The book provides a framework for implementing a blue ocean strategy, but our purpose of its use is to depict the current markets value propositions and identify potential new markets spaces that can be beneficial for Qwiki to pursue. The value curve breaks products or services down to a set of “elements of performance”, which in aggregated form describes the product/service, and how rates how much each element provides value to the most important customers.

Our analysis of the value curves in Qwiki’s context will solely be based on the app-market for smartphone/device, because Qwiki has stated that this is where they want to be in the future.

Furthermore, Qwiki has not shown any recent activities within the development of its information retrieval system (QR system) since the QR iPad solution was released (and discontinued).

Through our analysis of the most popular photo and video apps (appendix 22.2 and 22.1), we have identified six key elements of performance: speed, price, shareability, customization, accessibility, and service.

- Speed refers to the effort and time needed to perform a task in the app and how quick the functionality is executed within the app.

- Price performance indicates the price level of the app, which is either free, free with access to premium features through payments, or not free.

- Shareability refers to extent of how many different platforms content can be shared and distributed through content within the app. Shareability also refers to whether the user is locked to the app’s own platform or can export and view the content outside of the app’s platform.

- Customization refers to the level of customization that is available to the user i.e. the functionality of the app. Single execution purposes such as the iPhone Camera app enables the user to take a photo/video and does not offer editing functionality.

- Accessibility refers to the level of accessibility to the generated content e.g. through cloud-based solutions or via social media platforms.

- Service refers to the level of service provided with the app use and after sale service. Some apps only offer snapshot tutorials of the app, while other companies offer video tutorials and feedback channels within the app.

82 Out of the 46 apps we analyzed, 27 were in the category of photo apps, 13 were video apps, and 6 had combined features of the photo and video app like QM. Each of these apps have independently been tested and rated according to the six

elements of performance. The ratings are described in appendix 22.1 (App data – calculation for value curve) based on aggregated value levels for these three categories an average value for each of the six elements of performance. The results are shown in Figure 14 together with the QM app’s current value level for each and how they can differentiate.

Figure 14 - Value curve

Examining the results from appendix 22.1 depicted in the figure above, the price level for photo apps are higher, whereas video apps are prices lower, and combined photo video apps have the lowest price level, which generates more value for the customers. Two reasons might explain this phenomenon; first, the quality of photos taken from smart-devices has also been much better than quality of video recordings, causing app developers to focus their attention to photo apps due to higher demands. The photo app market has been well understood for many years and has consisted of single execution purposes or had very basic functionality, where differentiation has been low. Then as higher differentiation has been introduced to the photo app area with multiple and complex execution purposes and premium features, price levels have gone up. Second, video recording and editing apps have been dependent on technologies to mature, such as the camera in the devices, storage on devices, and bandwidth for sharing. With the introduction of 4G / LTE technology, Internet bandwidth is no longer an issue (4G mobile broadband is faster than many Danish household broadband). This combined with the fact that the maturity of video recording in smart-devices are progressing very well, could explain why video apps are becoming more popular. But in spite of the increase in popularity, the user needs and wants are not as well understood as with the photo apps – especially when video and photo content are combined – there are not as many differentiated and complex solutions available (like with the photo apps) keeping price levels down. If combined video and photo content, mash-up apps have the

83 same price level as photo apps potential and users would probably not purchase these apps since the overall functionality is low in video apps.

In regard to the shareability, QM delivers lower value than the competitors because of the limited distribution options. It can currently only be done through a Facebook or Twitter account, email, or text message. The text message share option is not easy to use, since the qwiki have to be saved to the private channel first, then accessed again, and then the option of text messaging it is available. The email option for sharing qwikies is currently not working, since it crashes the app. A practical feature to have would be the option of saving to the “Camera Roll” app in the iDevice, but this feature is currently under development according to Qwiki (Qwiki blog).

The only area within the identified elements of performance where competitor delivers low value, are the elements of service and accessibility. Qwiki, however, delivers create value in these aspects as opposed to the competitor’s apps. QM saves all generated qwikis on Qwiki’s servers and can be accessed through auto-generated gibberish URL’s (e.g. www.qwiki.com/v/NcshNKrI) from anywhere.

This would indicate that the accessibility should be rated with high value, but the feature is not very easy to find, and the link is only displayed to the user if he or she chooses to send the qwiki as a text message, which is a tortuous process. As to the service performance element, Qwiki delivers good value to the users. In-app tutorials are available and an email notification is sent to the user after the first published (shared) qwiki with additional information and links to their FAQ, tips & tricks and, blog page.

QM’s functionality is built around a platform solution with high levels of customization opportunities. Each user has their own “channel” and can watch of people’s publicly published qwiki stories through the app or links. The different photo and video apps are generally very similar in each of the elements of performance and Qwiki currently only differentiates in service and accessibility value levels. The concept of blue ocean strategy in the app industry is not very applicable due to the extreme competition and little options for differentiation. But the analysis did show that service and accessibility performance is neglected and thus Qwiki should focus on innovations that foster excellence in these areas.

13.1.2.3 Persistent business needs

Mark McDonald coined the term ‘persistent business needs’ with the purpose of determining the core activities that any given business is striving to continuously improve. Qwiki spent a year developing and perfecting the QM, and their main priority and focus has always been to change the way we experience information (Navin & Doug, 2012). From our interview with Qwiki, we have identified three business

84 needs that Qwiki is unceasingly striving to improve. They are set according to their importance for Qwiki with the first listed as the most important:

1. To enhance the way people experience, consume, create, access, and distribute information and content, and spread the “Qwiki Love”.

2. To increase the targeted markets, devices, and platforms.

3. To generate revenue and profit and not being dependent on venture capital.

The two first business needs confirm and support the focus on innovation adoption previously identified in the value discipline, core competence, and value curve analyzes. Despite the fact the last business need is crucial for their future survival; it is not the top priority. The persistent business need focus method thus suggests that Qwiki should focus their attention towards the previously identified innovations, and innovations that can contribute to revenue generation.