Dynamic Strategy - Current event - EcoATMs: A solution to recycle our electronics

EcoATMs: A solution to recycle our electronics

Mark Bowles, Robert Genthert, John Beane, and Eric Rosser saw that there was a big “gap” in recycling electronics, as only 3 percent of phones worldwide were recycled or reused, and decided to take advantage of that opportunity. Thus, they created EcoATM, a company that recycles electronics. In their EcoATMs anyone can recycle their electronics (cellphones, mp3 players, and tablets) and receive cash instantly. These EcoATMs can be found in malls or grocery stores and they are very easy to use.

The strategy of the company is to offer instant cash to people who want to sell or recycle their old electronic devices. That’s actually their competitive advantage against their competitors like GameStop. People can also sell their electronics in these stores, but unlike EcoATMs, customers in GameStop have to go to their local store to sell their device and get paid. Another competitor, buymytronics.com, which was acquired by GameStop, offers instant quotes but customers get their money in about a week. Thus, for instant money and environment friendly recycling, EcoATMs are a better choice for customers.

Building on their competitive advantage, EcoATM improves its ATMs by adding more features. Latest EcoATMs require each user to scan his/hers driver’s license to complete the transaction. Also, they are equipped with cameras that take the customer’s photo and compare it with his/her photo ID. By taking these measures EcoATM tries to protect its machines of becoming a “cash mecca for thieves” that can sell stolen phones to EcoATMs for quick cash. Another example of the dynamic strategy and dynamic development of the company is the fact that it enhances its ATMs by adding bigger database, highly efficient artificial intelligence system, and better algorithms to their latest ATMs, in order to provide better and quicker service to their customers.

In my opinion, this company is a good example for managers and entrepreneurs-to-be, of what they can succeed if they are smart enough to spot a “gap” in an industry and try to take advantage of it. However, what this story also tells to managers is that once they establish their company they should follow a dynamic strategy that would help them to evolve and provide better service/products to their customers.

Sources

·         Gail, Huff (2012), “EcoATM's give quick cash for old cell phones, MP3 players”, [available at http://www.wjla.com/articles/2012/11/ecoatm-s-give-quick-cash-for-old-cell-phones-mp3-players-82497.html ]

·         Caroline, Winter (2012), “EcoATM, the Automated iPhone Pawn Shop”, [available at http://www.businessweek.com/articles/2012-09-27/ecoatm-the-automated-iphone-pawn-shop  ]

·         Cliff, Edwards (2012), “GameStop, Without the Games”, [available at http://www.businessweek.com/articles/2012-08-09/gamestop-without-the-games ]

·         buymytronics.com (2012), “How it works”, [available at http://www.buymytronics.com/how-it-works.aspx ]

·         Kiosmarketplace.com (2012), “EcoATM could be cash mecca for thieves”, [available at http://www.kioskmarketplace.com/article/204057/EcoATM-could-be-cash-mecca-for-thieves ]

·         Denise, Goolsby (2012), “Cash offered for old phones at new ATM”, [available at http://www.mydesert.com/article/20121125/NEWS01/311250013/Cash-offered-old-phones-new-ATM ]

Peer reviewed article

The name of the Article was Winning Strategy by Jodi Spiro and it dealt with improvement in an employee training environment but I think taken generically the strategy can have other uses.

The article starts with a few main points.  One is to benchmark early on in a process to set a clear defined path since change is unpleasant to some and having a map helps.  Bringing people with you or getting "buy in" is important to success.  Lastly don't set yourself up for failure.  Winning early is important setting of goals needs to be done carefully.  If improvement is really the most important thing then that should be the goal.  There doesn't need to be a number associated with it.  Number goals can be too arbitrary.

The next part describes methodology.  Problems are usually solved in a similar manner to the method described in the article.  A problem is identified, a strategy is formed, a plan is implemented, etc.  "Wins" are the important part of this strategy.  Besides needing to measurable, tangible, etc they need to be publicized.  Positive results are motivating and opportunities to share that should not be missed.

Journal of Staff Development; Apr2012, Vol. 33 Issue 2, p10-16

Dynamic Strategy - Academic article - Competitive Actions and Dynamics in the Digital Age: An Empirical Investigation of Social Networking Firms

The purpose of this article is to examine the competition between firms in the social networking services (SNS) industry and the way that competitive actions taken by firms enhance their performance. SNS industry is composed of companies like Facebook, LinkedIn, Hi5, and MySpace.  

According to the authors, SNS firms use two ways to compete with other firms in their industry. The first way they use is to undertake “value cocreation actions” (Devi et al, 2009), which include codevelopment of technology with third party developers and forming alliances with firms to develop relational capabilities. The second way is to take aggressive actions against their competitors by using a “repertoire of competitive actions”(Devi et al, 2009). 

The authors use hypothesis testing in order to conduct their research. Their main hypotheses are:

• codevelopment actions are positively related to firm performance 
• relational capability actions are positively related to firm performance
• complexity of action repertoire is positively related to firm performance 
• the volume of actions taken by firms is positively related to firm performance

In order to find the information for their research, the authors used data from 52 SNS firms in a period of 3 years. This resulted in the authors having a sample of 156 firm years, which is a very good sample for their research.

The results of the study showed that the first hypothesis is true for most of the firms. Codevelopment helps firms to achieve greater performance. Hypothesis 2 was also supported by the results, so this means that relational capabilities actions help firms to have greater performance. The third hypothesis was also supported by the final results. Complex actions taken by the firms when they try to compete with their competitors help their performance. The fourth hypothesis was not supported by the study. The volume of actions taken by firms when competing was not clearly shown to affect firm’s performance.

As for managers, this study can help them in many ways. By studying the results of this study they can learn the types of competitive actions that each firm took and thus they can understand industry dynamics and develop better strategies to compete in this industry. The fact that this research combines IT, IS, and strategic management can help managers understand the competitive advantages that their firms can have by combining the same three components.

References

Devi R. Gnyawali, Weiguo Fan, James Penner, (2009). Competitive Actions and Dynamics in the Digital Age: An Empirical Investigation of Social Networking Firms, Information Systems Research Vol. 21, No. 3, September 2010, pp. 594–613

The article can be found in the following address:

http://libproxy.uhcl.edu:2057/ehost/detail?sid=9665d816-2aab-43bb-8f9e-8ed21577d5fb%40sessionmgr111&vid=4&hid=112