by | May 9, 2019 | 1 comment

Market Threat Assessment

Recent studies of senior managers have shown that being blindsided by a disruption is the largest unresolved concern in strategy development today. 

That fear is too often real because disruption typically begins where it is least visible to management- on the fringes of the existing target markets.  And, once the disruption “pirate ship” is sighted on the horizon, not only is it probably too late, but companies react poorly.

Some research of corporate responses to disruption has shown that most companies ignore the threat, fortify existing positions or attempt to buy innovation.  The first choice is not an option for an ongoing business.  Fortification through distribution changes, product model proliferation and discounting only buys some additional time while wasting resources.  Once a disruption enters the market, there’s little time for organic innovation efforts so companies often make acquisitions attempting to buy innovation.  Sadly, given the risk profile and limited experience in innovation, these are often sustaining innovations which are swept aside by the wave of disruption.

A very large example is when Microsoft fell behind in the mobile market in 2014 and purchased Nokia, a weak player in mobile phones to get access to this market.  The joint project, the Lumina phone, failed to catch on and Microsoft’s share fell by 50%- fail.  Cisco tried to catch up with the photography trend by acquiring Pure Digital, the maker of low cost Flip cameras.  Unfortunately, shortly after the acquisition, the high-resolution sensors included in smartphones took photography to a new level.  Bye, Flip! Trend monitoring would have predicted this natural evolution as a high risk threat. 

To anticipate external changes, marketing departments have embraced big data as a powerful tool to help companies identify new markets and consumer preferences.  These tools use the past to predict the short-term future which is reasonable in a steady market.  The problem is that big data cannot anticipate dynamic disruption. 

But, you and your staff can.

As a key input to your next strategy workshop, use trends!  As a start, gather info from the people closest to your market and further using Porter’s five force model.  See my articles on Scenarios to expand these trends to actionable goals.

What’s on your company’s radar today?

We are here to help as your coach on trends and innovation. We bring years of experience studying trends, organizations, and how to implement. We bring nimbleness to your strategy, and help you maximize your ability to execute.

Go the www.adamhartung.com and view the Assessment Page. Send me a reply to this email, or call me today, and let’s start talking about what trends will impact your organization and what you’ll need to do to pivot toward greater success.