With new business models and technologies coming to the market & incumbent business models challenged, new competitors emerge & prior partners start to resemble competitors. How we think is changing – faster product, processes & distribution innovations bundled with mobile & internet enabled technology, companies are able to introduce and experiment at a pace and scale we’ve not seen before.
Technology adoption is getting faster
In the first 4 years post launch, Skype reached 52 milllion users, Gmail 123 million & Facebook reached 145 million users while Watsapp crossed 400 million mark.
Convenience Re-Defining Competition
Airbnb’s valuation is greater than Hyatt & Starwood / Marriott combined. Mercedes competitors were BMW & Lexus now it’s Tesla, Uber and Google. Similarly, media & entertainment companies, Star, Times group, Zee are looking at Facebook, Google, Netflix & Amazon as their competition. Banks too are facing tough competition from fintech players. The fact is consumers are finding convenience & convenience is based upon user experience & value.
Nobody is staying in their lane anymore
Amazon’s unbundling of the bank and going by what Jeff Bezos said – “Your margin is my opportunity”, it is certain to launch many more products in this segment. In India fintech is exploding with multiple new players exploring the opportunity and why not, when you see, out of nowhere Ant Financial being the 10th most valuable financial services firm globally.
So how to respond to a quicker market
It’s about creating an organization that moves quickly and for that one needs both WILL and SKILL. I think it is part culture and part knowledge. Two things that will make today’s business faster is technology and data. Going by what Dr. Edwards said – “In God we trust, all others bring data”.
- Gut instinct is no longer enough – Organizations have seen the power of data-driven decision making and the technology to deal with the vast array of data is now available.
- Incremental ideas – Adding a new flavor to the existing product is fine but that cannot be a long term strategy and cannot be all that we can think.
- Too much focus on building – Companies are 2.8x more likely to build than to buy. While building in-house they move too slowly or it’s too late and fail to see real long term threats. As per a report, average time from ideation to launch, longest 24 months for 25% of companies and shortest 6 months or less by 9% companies.
- Sudden threats – Keep track of existing competitors, follow big market trends and do not ignore insurgent competitors.
- Build innovation source – Customers, Employees, Competitive intelligence, Suppliers and finally Theoretical are the possible 5 top sources of innovation. The first 2 being the most primary source and if this fails there is a huge cultural indifference within the organization that needs to be addressed. As not getting ideas from the right folks impacts growth.
- Copying strategies is OK – If nothing there should be no shame in copying your competition the way Paypal copied Square focusing on in-store retail and retail services for merchants.