Disruption is a phenomenon increasingly prevalent today as innovative startups restructure the entire business landscape and its operations with disruptive technologies. While disruption may bring about consumer benefits such as enhanced user experience and efficiency, it is a major cause of headache for traditional businesses.
The most prominent cases would be Uber and Grab taxi that made traditional taxi models obsolete with the introduction of mobile apps, and Alibaba that made shopping at physical retail stores redundant with e-commerce platforms. Even banks and insurance companies are facing disruption with the introduction of revolutionary finance technologies. Easy payments, b-b lending, savings and stock exchanges are all possible through the cloud today, making traditional business models of operations leaner and better.
Hence, as traditional businesses get crowded out of the marketplace with the advent of technology, they have to find a way back into the game. Here are three steps companies should consider in order to deal with disruption.
1. Identify the strengths of your disrupter’s business model
2. Identify your own relative advantages
3. Evaluate the conditions that would help or hinder the disrupter from co-opting your current advantages in the future.
Technology is changing the way businesses operate and making things more convenient and relevant for the end-user. Innovations like Internet of things (IoT), big data, block chain technologies and mobile devices are examples of the future drivers of disruptive technologies.
Hence, the best way for traditional businesses to stick their flags in the grounds and compete with the new and agile rivals is to innovate along with the new disruptive technologies of start-ups, or adapt to them.
What traditional businesses can do is consider holding innovation team meetings or attending global economic strategy conferences. This will provide valuable feedback on whether a business model shift is required to ensure a sustainable future.
IoT is an extensive network that connects things and people globally in the exchange of data. Think of the endless opportunities possible by leveraging on the Internet and its connections to tap into markets, deliver your product or service to consumers, or create innovative products!
Big data analytics is a way to help companies understand data and make effective business decisions. For example, data can be used to understand market trends and consumer needs and wants. By analysing and processing data such data, businesses are more able to efficiently restructure their product positioning and improve their product or service to capture their target market.
The ways of doing business has to be more flexible and open to changes, in order to continue innovating and improving. Only with innovation can you compete with new disruptive technologies.
Bringing your business online to the digital world
With the proliferation of the Internet and the increased accessibility of technology, traditional businesses should look towards more efficient and effective ways of running their businesses by bringing their businesses online to the digital world.
For example in retail, the traditional method of running your business would be to manage a physical store. However, the consumers that you can attract are probably only those who stay near the area or people that happen to chance upon your shop. Why limit yourself to a small pool of potential customers when you can throw your business onto e-commerce platforms where anyone with access to the Internet can browse through your inventory and purchase your items? Not only will you expand your consumer base globally, such innovations also make the shopping experience more convenient for consumers. This would essentially improve your business sales and operations.
Also, marketing strategies such as digital marketing, content creation and understanding data analytics, are ways that are essential to the marketing world today. Traditional ways of marketing through word of mouth and printing of posters and then sticking them on bus stops below your apartment are considered inefficient. This is due to the possibility of social sharing on social media platforms, automated cold emails and content marketing to get the word of your company out more efficiently and effectively.
Hence, what companies can do is consider bringing their business strategies online to the digital world, and exploit the wonders of the internet.
Keeping operations leaner
To be nimble and adapt fast to changing market trends, it is wise to shed unnecessary productions and make business operations leaner. A lean organisation is committed to its consumers and eliminate waste and redundant departments and generating the best value for customers. The idea of Lean operations is derived from Toyota’s approach to eliminating waste, increasing variability, and ridding inflexibility.
By making operations leaner, large and heavy industries like machinery and logistics will be then be more able to adapt to the constantly changing market needs that are so prevalent with the advent of technology.
There is no one way to overcome disruption. In a fast paced globalised world, technology is always changing so businesses have to continually adapt to these changes in order to remain competitive in their respective industry. While there is still a lot of value in the way traditional businesses operate and the quality of their goods lie in their traditional processes. However if you intend to expand your business and create more profits then there is no way around it other than to innovate and grow!