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Web 2.0 to Gain Greater Market Share and Higher Margins

By Karl in SEO, Social

McKinsey’s new research: companies using the Web intensively gain greater market share and higher margins!

Web 2.0 Technologies

Below are excerpts from a McKinsey article about how taking Web 2.0 technologies on board can lead to market leadership, greater market share as well as higher margins.

“New McKinsey research shows that a payday [for Web 2.0] companies could be arriving faster than expected. A new class of company is emerging— one that uses collaborative Web 2.0 technologies intensively to connect the internal efforts of employees and to extend the organization’s reach to customers, partners, and suppliers.

We call this new kind of company the networked enterprise. Results from our analysis of proprietary survey data show that the Web 2.0 use of these companies is significantly improving their reported performance. In fact, our data show that fully networked enterprises are not only more likely to be market leaders or to be gaining market share but also use management practices that lead to margins higher than those of companies using the Web in more limited ways.

Over the past four years, McKinsey has studied how enterprises use these social technologies, which first took hold in business-to-consumer models that gave rise to Web companies such as YouTube and Facebook.

Recently, the technologies have been migrating into the enterprise, with the promise of creating new gains to augment those generated by the earlier wave of IT adoptions. The patterns of adoption and diffusion for the social Web’s enterprise applications appear to resemble those of earlier eras: a classic S curve, in which early adopters learn to use a new technology, and adoption then picks up rapidly as others begin to recognize its value.

The implications are far reaching: in many industries, new competitive battle lines may form between companies that use the Web in sophisticated ways and companies that feel uncomfortable with new Web-inspired management styles or simply can’t execute at a sufficiently high level.”

Tags: Higher Margins, Market Share, mckinsey, social media, social media marketing, web 2.0