Multimedia strategy: Three steps to take now to best prepare yourself for later
I am wrapping up my Strategic Management course this week and I have been thinking a lot lately about how it relates to the digital space and more particularly to multimedia development. Strategy involves a great deal of theories and frameworks, but how do you unpack those high-level concepts in order to be left with something actionable? We certainly need more strategy in our field, as I feel like we are always reacting from the past rather than strategizing for the future. Here’s my take at it – I’d love to hear your thoughts!
Strategy is still a relatively new field, as some of the original frameworks were developed in the 60s and 70s. Today, nearly all companies either hire outside consultants to perform strategic analysis of the firm and industry, or hire employees for positions such as business development. Simply put, strategy is how a firm attempts to beat competition and win in its industry. The strategic decisions made always have trade-offs, but these trade-offs are the key to potential competitive advantage.
Step 1: If debating whether to start a new company or enter a market, use the Five Forces framework
When examining an industry, analyze each “force” that affects the market. If they are low, there is high probability for success and vice-versa.
For example, strategists consider each force in the PC industry to be quite high because tablets and mobile devices are strong substitutes for the PC, the barriers to entry are low for PC development since components are standardized and you can distribute your product free via the Web, and there is high bargaining power for suppliers due to the powerful brands like Microsoft dominating the space. Thus, they argue that it would be unwise to enter the PC market.
Exercise: Try testing this framework out on the multimedia sector – are the forces high or low?
Step 2: Formulate a specific strategy when entering the market
Even freelancers should spend some time on this step. Breadth or depth is always one of the biggest questions: Should I know a little bit about photography, videography, blogging, SEO, etc. to appeal to a wide variety of clients or should I microfocus on just one area, like videography?
Moreover, should I target just philanthropic videography, or should I promote myself as a videographer for businesses, weddings, non-profits and anyone else who is willing to give me money?
Mediastorm’s Brian Storm argues that producers should go for depth and specialize their skillset.
Furthermore, former UNC professor Alberto Cairo once told me that it was crucial for people to target a specific market rather than throwing out a broad net. Thus, both Brian and Alberto are suggesting that targeting a narrow competitive scope is the way to go.
From there, how do you know whether to focus on low cost or differentiation? I suggest focusing on differentiation because you don’t want to under-value your product by becoming the low-cost provider. There are three approaches to differentiating yourself:
1) Specialize in overlooked market segments
2) Build up unique expertise in that segment
3) Build loyalty through focus
For example, the company Duarte is an excellent example of #1, where they develop multimedia for business communication. I strongly believe that presentation design has historically been an overlooked market, but one with great potential.
If you want to target #2, perhaps you should focus on dominating motion graphics rather than just being a graphic artist, or excelling at 3D technology such as “3D guy” Al Caudullo.
I think Duckrabbit does a great job at #3, where they only focus on audio slideshow development. I will never expect them to do videography storytelling, graphic development, or website design. Their followers and clients appreciate their focused approach to their work, which gives them competitive advantage.
Exercise: Determine which box you want to target and why. Make a list of pros and cons to determine where you will be most competitive.
Step 3: Determine simple rules
Many argue that often the best strategies are the most simple when the environments are complex. Let’s look at a couple of organizations’ simple rules:
- In-house original ideas only.
- No studio executives.
- Great story first, then animation.
- Release a new feature-length film every 18 months.
- Defer judgment.
- Encourage wild ideas.
- Build on the ideas of others.
- Stay focused on the topic.
- One conversation at a time.
- Be visual.
- Go for quantity.
Researchers Kathleen Eisenhardt and Donald Sull note that the “right” number of rules fall between two and seven and that they generally consist of five types: how-to, boundary, priority, timing and exit rules.
Exercise: Read the Harvard Business Review article “Strategy as Simple Rules” to learn more about the types of rules listed above. Once you have finished, make a short list of rules for yourself and try to stick to them. Feel free to adjust them over time, just make sure to keep them simple!
If you liked this post, make sure to check back next month for my weekly series “Selling Yourself,” where I will cover a wide variety of topics such as targeting a niche audience, pricing your services, finding competitive advantage and marketing your services, among others.
Tags: Alberto Cairo, Brian Storm, business strategy, competitive advantage, Dr. Chris Bingham, five forces, Michael Porter, simple rules