Globalisation and The Long Tail no comments
Globalisation refers to the how the world is ‘shrinking’ culturally and economically. How the world is changing from different nations managing themselves to one big world trading ideas, people, products and money. There are many global companies such as MacDonalds that exists everywhere! There are a number of advantages and disadvantages to globalisation. Sometimes it can be seen as a good thing that benefits small businesses by giving them access to a larger market, such as through the Internet. However, sometimes it can also be seen as a bad thing, for example with the outsourcing of work to poorer countries and buying materials for production in poorer countries to save money which can affect the local and national economy.
The Long Tail – Chris Anderson
The tail refers to the long end of the curve on the graph that depicts the popularity of all products. As you can see from the image above, ‘the head’ is short and contains the most popular of products. These are things that everyone wants, think of it is the top 40 songs in the charts. ‘The tail’ is much longer and consists of every other product in existence (or every song that is not in the top 40!). These things are much less popular, but there is a lot more of them. Money can be made by just selling products from the long tails, you would sell maybe one of each product rather than millions of one product as is seen in ‘the head’.
Companies do still aim for a business model that targets ‘the head’ rather than the long tail. For example radio stations tend to play the popular music at that moment in time, but there is a suggestion from Chris Anderson that the radio is dead.
Why the radio is dead:
- Radio stations need money so they need advertising and therefore need listeners. To get the most listeners you need to appeal to the majority who like what is popular at that moment in time (‘the head’).
- The rise of technology in the form of MP3 players. You can listen to any music you want at home, on your PC, on my personal MP3 player and even take that into your car and connect it to a modern car stereo.
Chris Anderson also suggests that “The Long Tail is full of crap.” Which is it…It does contain everything! But the compelling thing about the long tail is that there is something for everybody that they would not be able to find and purchase otherwise.
The Internet and the Long Tail
The internet has given us unprecedented ability to access products never before available so quickly and easily. The Internet is the best example of how globalisation can reach everyone. Someone who makes Doggles (goggles for dogs), or other niche items, can become a millionaire.
A real shop on the high street may have trouble making money if it was taking advantage of the long tail. Not just for the reason that it cannot reach as many customers as an online shop, but for more practical reasons that it would be difficult to sort through all of the many niche products. Being able to search through the ‘crap’ and filter to get to the information you actually want is very much a benefit you can see online. Social media may also help with this, we often see suggestions for other items we might like on online shops like Amazon. Folksonomies consisting of lots of tags collaboratively created may also assist with finding things you want and things that are similar to it.
Does the Internet bring down the barriers for businesses?
Is Globalisation good for the small business?
Yes and no, it depends on what you are selling. There is the potential for more sales through having greater access to a wider market. This is especially true for niche items and products where in some situations they may sell nothing if they are not based near their market. The Internet definitely assists with globalisation based on geography. There is also the benefit that selling products online is very cheap to set up and use. Google Analytics is also a nice tool to assist with marketing and improving your own business website.
However, with the benefits of reaching more people, large businesses will also receive this benefit. Large businesses may be able to give better prices due to mass production, but this shouldn’t effect niche businesses where large businesses do not offer so many niche products.