Is digital a threat or opportunity to your business?5 min read

Mike Soden May 29, 2021
Is digital a threat or opportunity to your business? 1

New digital ecosystems are emerging in many traditional industries.
This can be a threat to your business. Or a real opportunity.

Growing your business digitally is important.

We are the right people to guide you as we see the big picture in digital. Almost instant, low-cost, and everywhere ability to connect people and devices anywhere.

By 2025, 20 billion devices will be connected, nearly three times the world population.

Consumer demand is quickly changing. Your business can change and gain with this market or lose.

What worked before may not work tomorrow

Many of us learned years ago what works. Core economic principles guided us to success and up to now continue to generate results. But the world is changing.

Digital is destroying traditional commercial thinking

Digital is confounding the best-laid plans to capture surplus. Essentially, it creates more value for customers than for business.

This is unpleasant news for businesses wanting to convert digital forces into economic advantage. Have a look at your industry.

Is digital starting to unbundle profitable product and service offerings, allowing customers to buy only what they need?

Is digital starting to impact your retail distribution? This is the universal by-product of online choice and price transparency.

Is it a problem of scale? If digital offerings can be reproduced almost freely and instantly, this shifts the advantage to businesses who understand how to drive marginal costs down and so have a price advantage.

Do your metrics show you are doing ok?  Metrics can mislead: a company that tracks and maintains its performance relative to its usual competitors seems to be keeping pace, even as overall economic performance deteriorates. We may not like the fact that consumers now get the same free services that they once received from travel agents anytime, anyplace, and at no cost. We may shake our heads at the idea of taking advice from the “crowd” rather than experts.

Customers here were the biggest winners. The businesses that captured the value that was left were often from a completely different sector to past players. And that’s where we come in. We help you to learn quickly how to compete in the digital world, create value for customers, and make profits in a changed market.

Digital is driving changed economic value

Look at Amazon or iPhone (the iPhone regularly captures over 90 percent of smartphone industry profits.) Unless you are already a market leader, if your strategic goal is to maintain share relative to competitors you will be in trouble.

You can’t assume market share will remain stable, that profitable niches will remain defendable, and that it’s possible to maintain market share by outgrowing traditional rivals rather than facing the digital models that are winning share.

Are you worried about being a ‘Digital first mover?’

In the past, a rational strategic response was to observe for a little while, letting others incur the costs of experimentation and then copy and follow. This approach represented a bet on the company’s ability to “outexecute” competitors. Today, it is first movers and very fast followers that gain a huge advantage over their competitors. And that’s we can help you!

Why you can’t do this by yourself.

Traditional approaches such as tracking rivals’ performance and using that knowledge to fine-tune direction or value chains are increasingly misleading.

Digital operations who move across industry and sector borders are destroying traditional models with familiar lines of sight. Grocery stores, for example, now need to aim their strategies toward the moves of Amazon’s platform, not just the chain down the street.

New performance companies have the scale to reach a nearly limitless customer base, use artificial intelligence and other tools to give great levels of service, and benefit from often frictionless supply lines. Improbable business models become a reality. Look at Facebook and Uber.

Are you looking at the right competitors?

We find many companies worry about the existing digital natives, and their disruptive business models certainly merits concern. Your existing competitors are most likely also digitizing and planning to shake up competitive dynamics.

What are the potential dangers?

Incumbents can disrupt the market. They can also lose market share in the process. The real risk though is becoming a slow mover in a fast-changing market. We are talking of both B2C and B2B markets

Digitizing B2B players have been lowering costs and improving both the reach and quality of their offerings. Robotic process automation (RPA) has digitised 50 to 80 percent of back-office operations in some industries. Should the opportunities associated with these changes be an opportunity or a threat for your industry? We can help you decide.

What is going to work?

You don’t need to walk away from your existing business model.

A common response to digital threats is: “If my market is being threatened, I need to create something completely new.” Understandably, that becomes the driver for strategy. Yet for most companies, the pace of disruption is uneven, and they can’t just walk away from existing businesses. They need to digitize their current businesses and innovate new models.

Our approach is to break down your company problems into manageable chunks. The answer is not an initiative like “taking our business to the cloud” or “leveraging the Internet of Things”.

We help you face the realities of digital competition.

If you are here: “I need to develop a strategy to grow market share and turnover, and I need to get there quickly by creating value to customers. I want to redefine my role in a changed ecosystem and develop new value propositions. I want significant improvement in my existing business.”

Call us. We can help you.