Objectives of knowledge management

Market Driving
Strategy:
Customer
education
and motivation
Market-Driven
Strategy:
Keep pace with
market threats/
opportunities
Status Quo:
External Forces/Incentives
Inter
nal Capability/Incentives
Don’t bother
Capability
Building:
Build for transition
to electronic
commerce
Low
High
Low
High
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Part 2
Strategy and applications
external forces and capabilities. Figure 5.9 defines a matrix where there are four quadrants 
which businesses within a market may occupy:
● 
Market driving strategy
(high internal capabilities/incentives and low external forces/
incentives). This is often the situation for the early adopters.
● 
Capability building
(low internal capabilities/incentives and high external forces/ 
incentives). A later adopter.
● 
 Market- driven strategy
. Internal capabilities/incentives and external forces/incentives are 
both high.
● 
Status quo
. There isn’t an imperative to change since both internal capabilities/incentives 
and external forces/incentives are low.
An organisation’s position in the matrix will be governed by benchmarking of external fac-
tors suggested by Perrott (2005), which include the proportion of competitors’ products or 
services delivered electronically, proportion of competitors’ communications to custom-
ers done electronically, and proportion of different customer segments (and suppliers or 
partners on the supply side) attracted to electronic activity. Internal factors to be evaluated 
include technical capabilities to deliver through internal or external IT providers, desire or 
ability to move from legacy systems and the staff capability (knowledge, skills and attitudes 
necessary to conduct electronic business). The cost differential of savings made against 
implementation costs is also included here.
Stage models can also be used to assess internal capabilities and structures. For example, 
Atos Consulting (2008, Table 5.4) have defined a capability maturity framework. This is 
based on the well- known capability maturity models devised by Carnegie Mellon Software 
Engineering Institute (now transferred to the CMMI Institute, 
http://cmmiinstitute.com/
) 
to help organisations improve their software development practices. (In Chapter 10 there is 
more detail on how to achieve management of change between these stages.)