Whether businesses succeed or fail in today’s world is largely determined by forces in the market that are often beyond their control. In earlier times, market behaviour was somewhat predictable. Businesses could plan better and tailor their strategies accordingly. There was less competition and the market was shared by just a few. A greater degree of certainty was a luxury that most established businesses enjoyed, and doing business was simpler in many respects.
Digital technology has changed the game. This is what we have all come to know and speak of as "market disruption". It simply refers to changes in the market that technology has brought about, which have impacted businesses in a big way and compelled them to rethink their business models, strategies, and future existence in an already challenging global economy.
Innovation has brought with it various technological applications which businesses are able to leverage to achieve operational efficiencies and other benefits. The use of such applications has enabled businesses to simplify processes and to do things quicker and better. This has made them more competitive and relevant in their chosen markets.
In contrast, the market disruption that innovation and technology has brought about has made doing business harder in some respects. Decades ago, established businesses knew that they will be around for years to come. That is no longer the case and there are very good examples in recent history that illustrate this. Technology has introduced an uncomfortable degree of market uncertainty for businesses, and just because a business is relevant today does not guarantee its relevance tomorrow.
Businesses thus cannot rest on their laurels anymore because technology has given their competitors a leg up and made them more competitive. The big names of old are no longer as powerful as they were and technology has enabled consumers to have greater choice in various product segments.
The telecoms industry and its rapid developments is a good illustration that consumers are spoilt for choice. Newer and faster telecoms technologies are being developed every day. We have come a long way from the original cellular phones which could make and receive calls and send SMSs, to the smartphones we use today to practically run every aspect of our lives. There are now varieties of cell phones in the market and not much separates the various offerings from a capability, performance, and aesthetics perspective.
Any business can be easily forced out of the market by the competition because technology has enabled competitors to be more daring and ambitious.
Agility is the best response to market disruption, change, and uncertainty. This is something that more established businesses tend to struggle to achieve simply because of their historical dominant market position and often their size. In contrast, start-ups tend to be more agile.
Businesses need to be flexible enough to take bold decisions to change course and tweak their strategy as and when required. Among other things, this requires strong decisive leadership; a firm understanding of the market disruption; and a fundamental shift in thinking. The shift in thinking has to be informed by an understanding that change and uncertainty require a response in the form of quick strategic decisions and adjustments if businesses are to remain competitive.
These decisions and adjustments need to be made in the full knowledge that innovation and technology are opening up and redefining the market. New entrants are entering the market and aggressively pursuing a share of it through employing smart technologies that enable them to produce better products and deliver better services at a cheaper cost.
Simultaneously, target customers are prioritizing managing costs and creating savings in their businesses. As a result of this there is no longer any brand loyalty. Those days are gone and if customers identify an alternative product or service that offers them the same benefits and can be delivered quicker and at a cheaper cost, they will not think twice before changing their mind about your product.
Leaders of businesses should thus focus on changing the established way of thinking of their people. At all levels, a culture of agility in decision making and execution of strategy needs to be adopted to survive the constant onslaught from competitors.
Market disruption and change is often difficult to accept and to deal with simply because people like what they are familiar with – it’s comfortable. Being comfortable is no longer possible and we should be comfortable being uncomfortable. We must embrace the disruption and simply gear our businesses and position them to respond accordingly. Market disruption should inspire businesses to become nimble and to seek new opportunities in the market and pursue them to reach greater heights of growth and profitability.
Munya Gwanzura is an in-house lawyer, commercial mediator, thought leader and motivational speaker