List your top five competitors today. Chances are, this list will be different in five years.
The pace of change in virtually every industry is tied to the development and diffusion of transformative business technology in every facet of the value chain. More than ever, top executives must develop a long-term strategy propelled by strong digital platforms to compete with traditional and new disruptive business models.
Will you become the disruptor or be defeated by one?
Our clients’ executives recognize that technology improvements in the customer experience, operational excellence, employee skills development, and value chain analytics will allow them to compete intensely and fend off market disruptions. However, these tactics alone will not ensure long term sustainable growth and profitability.
It’s your long-term business strategy that will provide the roadmap and orchestration to sustainable success. Your best business strategy is about creating the future, engaging the customer, and creating long-term value for all stakeholders in more innovative ways.
What will your future business scope be in 2025?
To frame this, I will use Michael E. Porter’s Five Forces Analysis. It is a strategic management tool that identifies the most impactful factors in contributing to the competitive landscape of your industry.
- Threat of New Competitors
- Threat of Substitutes
- Bargaining Power of Buyers
- Bargaining Power of Suppliers
- Competitive Rivalry
Management teams who understand the market dynamics within these frameworks through the lens of technology will be best able to know where to compete and how. Further, the idea behind digital transformation as a driver of sustainable competitive advantage is not just about positioning, but about out-thinking and out-performing the competition. Strategic thinking is about making sense of the future better than others, and then shaping that future to your advantage.
The Threat of New Competitors
It’s not just the Internet that levels the playing field for new competitors, it’s their choice of digital business technology platforms that drive rapid product design and delivery, supply chain integrations, and advanced analytics. The successful established companies will combine well-earned expertise with innovative digital products and services wrapped around their traditional core offerings.
The Threat of Substitutes
Today’s taxi companies have been Uber-ized, and retail store chains have been Amazon-ed. Do you think they saw this coming?
Those companies who will meet these challenges and continue to grow will be able to evolve or add new business models that complement the core business. Competitive trends will come and go, but the established survivors will be agile enough to transform without great expense.
The Bargaining Power of Buyers
It’s likely your customers are well researched on your products, your competitors, and your pricing. However, merely having a nice CRM system is not going to generate happy customers. The highest performers will:
- Synthesize big data to understand and deliver an exceptional buying experience
- Allow the customer a say in custom product or service design
- Offer alternatives to outright purchases such as subscription or usage-based ownership and sharing with customer communities
The Bargaining Power of Suppliers
Dominant suppliers can have leverage on your company’s supply chain and profitability. It’s common practice in manufacturing and distribution for the strongest suppliers to push operational costs downstream.
Companies who can meet these challenges by minimizing the costs with supply chain integration and fast response analytics will generate a competitive advantage.
The Rivalry Among Existing Competitors
Your competitors want your customers, and they are working on higher quality products and services to gain access. To compete, you will not win by replicating what the competition is doing. You need a plan to rapidly deploy tactics and infrastructure that will lay the foundation for long term sustainable profits.
Our Bottom Line Message – Be Ready
No business — regardless of industry or size — is immune to digital disruption. It’s up to business leaders to decide: be the disruptor or be defeated by one. The right business technology makes all the difference.
Ready to Disrupt? Try our NetSuite 30 Day Experience to see how NetSuite business technology solutions fit your organization’s goals.