Any business that does not have a strategy to move up the value chain is doomed to be road kill as the gates of creative destruction continue to close upon them.
The new laws of average guarantee that any brand that wants to ride through the common line of mediocrity will in the end disappear.
The new brands of success fully understand that their brand is actually a “culture” and an overarching theme that is shared by all who want to work there. The key players will be evangelists who understand that price alone is not a competitive position of strength and they will accutley understand “why” the business does what it does.
Average value propositions in the future will become invisible to consumers who can now accept nothing less than clear and definitive value.
Future success in listed company returns mean you will need to refocus your strategy to choose intelligently on a macroeconomic landscape that will be continually subject to technological disruption.
The global economy is transforming and last generation business models are collapsing.
New technologies are being applied to the worlds of finance, energy, Government administration, healthcare, education and commerce. Product superiority and transparency is moving ahead steadily in all of these areas.
Businesses that adhere to strategies and practices that worked a generation ago are being rapidly left behind.
Fairfax in the past had multiple opportunities to invest in or acquire Realestate.com,Carsales.com.au and Seek.com yet they felt that the upstarts would not survive, how the tables were turned.
The absolute arrogance of previous Fairfax management is beyond description and belief and will be the subject of business studies for decades to come. Age-old business like the Yellow Pages, Readers Digest and Encyclopedia Britannica are not even heard of or understood by today’s generation.
Open source platforms like Android and Hadoop lead the way in product development and strategy. Companies like Nokia who have shunned open source in place of their closed platform risk the ruin of irrelevance.
As a technology continues to improve and engage with consumers and purchasers based on personality, history and loyalty these businesses will catch more of “the long tail”.
We have been writing for years now about the increase in unemployment as automation and offshoring squeezed the middle class. The fortune created by the new winners in technology will be immense. We have already observed how market volatility can wipe out existing companies seemingly overnight and icons like Compaq, Hewlett Packard and Kodak to name three have failed to move fast enough to keep up with the Apples, Google’s, Amazons, EBay’s etc.
As industries transform major winners and losers will emerge over shorter periods of time and markets will react wildly as market valuations are rewritten more rapidly than ever before.
Make no mistake, we are in an arms race as companies place increased reliance on IT, cyber attacks will continue to escalate and data theft will be a significant problem for many businesses as their IP is stolen, if they do not have protection in place.
Advances in the Internet, connectivity and improved software will improve outputs whilst at the same time lowering costs, conserving resources and creating more equal opportunities for personal satisfaction, education and healthcare to name just a few.
Understanding the drivers of the transformation underway given the new era of volatility and also understanding the new risks of the coming transformation and the expected effects on old line industries will be well advised sooner rather than later.
The potential for gains in efficiency are so enormous that small companies stand a better chance of success now than ever before. Businesses with evangelists, great culture, superior IT and IP will outperform the larger more established players and redefine the core and success of business in the future.
Who are these companies?