The supply side strategy

In the last chapter, we saw how an information source could be seen as a collection of people at a solution point in a Solution Space. This point was exampled as a costume jewellery counter in Hyper Hyper and the people providing the information were the customers and the passers by. It provided the solution to the problem: "what is required?". This retrieved information could then be used as the desired goal in the "how to get it" part of the strategy.

To reach this goal, it was necessary to move to another point in Solution Space to communicate with a different group of people who can provide a solution to the problem: "We know what we want, but, how do we get it?".

In the far simpler and more stable environment of the bricks and mortar world, these supply side solution points often take on a physical reality. In the case of the costume jewellery counter in Hyper Hyper, the supply side solution point had manifested as a geographic location: an area around Berwick Street in London where many wholesalers of costume jewellery had set up in business. At the time, there were probably around one hundred different wholesalers in and around Berwick Street: each providing various types of fashion accessories and all run as entrepreneurial enterprises in competition with one another.

Despite the competition, Berwick Street provided an overwhelming benefit to these wholesalers because, not only was it a place to sell from, it was also a place to get the information as to what to sell. Just as Hyper Hyper provided a solution point for me to know what to buy for my jewellery counter, so Berwick Street provided a solution point for all the wholesalers to know what to get from the manufacturers to supply to the retailers.

The people, providing the information at this Berwick Street solution point, were the retailers themselves, who would go there by the hundreds to buy for their customers. Each retailer arrives knowing what their own customers want and passes this information on to the wholesalers by buying and asking for particular items. This allows the wholesalers to acquire up to date knowledge of the current fashion trends on a large geographic scale. In essence then, the wholesalers in Berwick Street have positioned themselves at a physical solution space where they can find out exactly what to order from the manufacturers.

From this we can deduce that commercial strategies of the wholesalers also have to have two solution points: 1) to get information as to what the retailers want to buy; and 2) another solution point to let them know where they can get it from. The first solution point is provided at their sales location in Berwick Street, but, the second solution point is more problematic because it doesn't occur at any single geographic location. Costume jewellery manufacturers, come from all parts of the world.

To make contact with these manufacturers, the wholesalers will have to seek them out. They will need to go to international trade shows; visit individual factories or workshops; travel to many places in the world where there are concentrations of costume jewellery manufacturers. Most countries and big cities have speciality manufacturing areas. These are usually the smaller manufacturers who can't afford to display their products at the trade shows. They tend to concentrate in the same physical area for the same reason wholesalers congregate in and around Berwick Street: because it provides a more efficient supply side solution point for the wholesalers to visit.

Looking at this complete system as an abstraction, it would appear as thousands of solution points with information flowing between them: a complex network of inter-connected nodes. The information starts from the customers, feeds through to the retailers, then on to the wholesalers from where it goes to the manufacturers who use it to decide what to make. The information reflects customer requirements and then feeds back again as desired product. It is a system of constant, backwards and forwards information flow. A seemingly chaotic pattern of activity, yet, all part of a dynamic, continuously adapting system.

Of course, there are many original design initiatives that enter the system, but, these are unpredictable, random events that sometimes do and sometimes don't create chaotic instabilities of demand and supply. No serious trader bothers to look too closely at the origination or reasoning behind these creative efforts; they are treated simply as statistical noise that business strategies have to allow for.

The product here is fashion costume jewellery, but, looking at the abstraction of this system - the information flow from the customers to the basic product manufactures - would see this same model applying to almost every possible commercial system.

To map this system of information flow across to communication strategies needed for e-business and e-commerce solutions, we need only see beyond the physical substance of metals, glass and plastics to the real purpose of the jewellery: as a fashion statement. In this abstraction, the jewellery is not thought of as a work of art or a piece of technology but as a message that the wearer wants to broadcast.

At one level, this message advertises the wearer's taste and fashion sense, but, at another level the message is proclaiming the wearer's identification to a group and even their position within a group. Using this abstraction, rather than the physical reality, would see the fashion jewellery business as one of dealing entirely in messages: messages in a state of chaotic change as trends and fashions reflect the constantly evolving nature of groups and their hierarchical structures.

With such an abstraction, you can quite easily map this physical trade in costume jewellery across to the Internet because the Internet is also about dealing with messages.