Netflix, Uber and Airbnb continue to make headlines for radically changing their business sectors. Having invented new products and services, they’ve made it impossible for their industries to carry on as before.
True disruptors start small but they can, and will, start eating into your mainstream customer base, perhaps they’ll even create a new business segment that sidelines another. Failing to identify a disruptor could result in the collapse of an established company or industry, such as the downfall of Blockbuster Video as a result of ignoring Netflix targeting its main market.
Disruption has caused widespread concern in but there’s no need to panic. Reliable strategies to master the challenge.
Financial Services are most affected by digitisation for example, because the entire value chain can be digitised. This applies to both the insurance business and banks. Yet many companies operating in financial services tend to be rather traditional. European banks could lose 20 to 30 percent of their revenues to the new competitors, so it’s crucial for management to create the right digital mindset amongst its employees.
In the publishing sector, traditional print media is in a terrible decline due to online media, which is forecast to grow by 8% per year to almost double by 2025. Therefore, print publishers are losing their two main revenue streams from newspaper sales and advertising. To stay competitive, they should embrace change. Even if that means deciding on a new direction.
Big Data, the ‘new oil,’ is disrupting the retail industry. The more consumer data we collect, the better we can predict our customers’ behaviour and tailor our products and services accordingly. As a consumer goods company you face many different challenges. Each day a new wave of digital or competitive disruption might crash into your company. Yet the enthusiasm for Big Data is ebbing away as companies are finding it difficult to extract tangible value from the bulk of figures obtained.
Instead, focus on ‘smart’ data to gain a better understanding of customers’ needs. Human understanding and interpretation of statistics is as important as the numbers themselves.
Technological innovation has been disruptive before, and a powerful driver of progress. So, perhaps it’s time for you to see disruption as an opportunity rather than a threat. How successful you remain thereafter just depends on whether managers can develop the strategies to cope. Is your company prepared for the future?