There is no question that digital disruption is impacting businesses across all industry sectors, but as more new start-ups break through and disrupt markets, what can established businesses do to protect market share and withstand the threat posed by digital disruption?
We have seen many companies fade and fold as a result of digital disruption, but rather than dwelling on the threat of disruption it’s time for established organisations to look at the opportunities presented by the increasingly digitised world we live in.
Technology is impacting customer behaviour and the world around us. Business models are changing and it’s time to adapt and transform for business survival. By thinking outside the box, embracing new digital technologies and focusing on innovation, established businesses can not only position themselves for success today but into the future as well.
Reasons businesses may fail in the face of digital disruption
- Slow Decision Cycle – Technology cycles are becoming shorter than corporate decision cycles and organisations are finding it increasingly difficult to keep up with the rapid pace of change.
- Complacency About Business Models – Companies cling on to their old successful business models for too long. While Blackberry continued to focus on its lead product, which it thought was untouchable in the enterprise mobile segment, Apple continued to innovate and reinvent what a mobile phone could be.
- Fear Of Cannibalising Existing Business – Companies are reluctant to go to market with innovative new offerings for fear of cannibalising existing business. Kodak failed to commercialise its patents for digital photography, and, instead, other firms such as Fuji licensed and commercialised it. “Kodak continued to focus and invest in film-based technologies in the 1980s and 1990s while Fuji was systematically extracting itself from film-based photography and shifting massive resources to new and unproven digital technology.” – Rita McGrath, Professor at Columbia Business School.
- Lower Margins In The Transition – Lower margins in digital business often puts companies off. The newspaper industry was so largely dependent on traditional advertising revenue it was a big leap for newspapers to transition to digital where the rates are a fraction of what they are on print.
- Key Resources Unaligned To Opportunities – Organisations try to retro-fit new opportunities into existing organisational structures. Political challenges also present hurdles to successful innovation.
Digital is shaping the way the world operates today and, in order to serve customers better, businesses must understand how to leverage digital to innovate and better serve them.
Indeed, new start-ups and budding entrepreneurs are leveraging digital technologies to build uber-successful businesses that are delivering on and exceeding customer expectations. However these digital technologies also present golden opportunities for established organisations to transform their businesses and become disruptors themselves.
Every business today needs to be a digital business. Digitalisation is not about how you incorporate technology into your organisation, it’s about how you use technology to create new opportunities for your business, ensuring your company serves the customer of today and tomorrow.
Digital presents businesses of all sizes with opportunities to innovate, retain and capture more market share in current markets, enter new arenas and streamline the way their organisation currently works – systems and processes are becoming faster, smarter and waste-free with the help of new technologies.
Think outside the box, look at how your customers are behaving and get to know them, then look at how you can leverage digital technologies to meet their needs and exceed expectations.
This is all possible, but what is required is for businesses to act now and embrace and leverage innovation.