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July 09, 2019
How to Thrive in a Marketplace Where Competition Can Come from “Anywhere”
Nitin Rakesh
Chief Executive Officer And Executive Director
Tags: leadership

For as long as corporates have existed, so has their competition. For every enterprise that has focused on solving a relevant customer challenge, there have been many others who have invested effort, time and resources in addressing the exact same challenge in a multitude of different ways.

But this was at a time when the marketplace had clearly demarcated boundaries. A bank then was the only legal financial organization in operation and a car maker only produced cars. It was a time when the automobile space was dominated by a handful of large companies like Ford and GM making conventional fossil fuel cars. An era when giants like Wal-Mart and Target ran successful brick-and-mortar shops in the retail space and when the banking industry was dominated by large players like Bank of America and JP Morgan Chase, whose offices were open only during “banker’s hours.”

Look around today and it is clear that nothing could be more different. Boundaries between industries have disappeared, and new ideas to solve customer problems are coming from everywhere. Be it college drop-outs or Ivy league alumni, startups or legacy enterprises, the marketplace is teeming with players, who, enabled by globalization, advanced technology, and open-source platforms are rewriting what it takes to be counted and what it means to thrive in a fast-paced, customer-focused world.

In this, the first part of a new blog series focused on what it takes to be an architect of disruption, we look at why it is important for enterprises to be ready to compete with ideas and solutions that can emerge from just about anywhere.

The art of being a green car, a smart car, a mean car: the curious success of a planet-propagating company.

Let’s begin with a closer look at Tesla. The company that is named after a Serbian-American innovator, Nikolas Tesla has made a name for itself not only because it makes electric cars and is committed to contributing to a greener planet but also because it has made the idea of an automobile ‘desirable and intelligent’. Led by Elon Musk, the company regularly makes headlines for turning the objective of the automobile industry on its head. And it does this by design. Many of you would have read stories about how Musk obsessed over the detailing of his cars’ door handle or about having “just” seven moving parts in a car. You would have also heard about the intelligent solutions Tesla is developing for alternative power sources, and power storage and its plans to have the car itself booking its customer a slot at the nearest recharge point.

Be more or be fast? The democratization of technology and the rise of new innovation centers.

Like Microsoft’s acquisition of the world’s leading software development platform, GitHub demonstrates, the same ability to push boundaries and rewrite the rules of the game can also be seen in the technology domain. Take, for example, the latest developments in laser technology [1]. Even while the world's first high-intensity laser was developed at Lawrence Livermore National Laboratory in California in 1996, the advantage has already shifted to Europe and Asia. In fact, 80-90 percent of new cutting-edge petawatt-class lasers are currently being produced outside the U.S. It is these new emerging innovation centers that will lead the world’s foray into next-generation lasers for medicine, nuclear weapons development, manufacturing, and science.

In other areas too, the exponential growth of technology that the world has witnessed over the past two decades has not only enabled the democratization of access to tools and platforms to anyone interested in building something. It has also transformed how businesses must cater to their highly informed and always-connected customers. These developments are increasingly disrupting the existing order and creating new technology hubs. Take the emergence of Israel[2] as the world’s new startup hub. Today, Israel has the most number of tech startups anywhere in the world, outside of Silicon Valley.

Amazon, Airbnb, and Klarna: Disrupting retail, hospitality, and banking.

Which is why Amazon doesn’t rest on its laurels on being the world’s largest e-commerce marketplace. It is always Day 1 at Amazon. The e-commerce giant constantly seeks ways to further expand its reach in the most unlikely ways including by entering the brick-and-mortar groceries market by buying Whole Foods. Subsequently, when Amazon further evolved to deliver Internet on demand, it proceeded to further disrupt the space by becoming a content producer as well, and not just remaining a streaming platform. Did offline, department stores like Macy see this coming?

Similarly, Airbnb, a relative newcomer to the hospitality industry, has forged ahead of established, legacy hotel chains by providing as; a business solution what was previously unthinkable—privately-owned accommodation on rent! Further, payment providers like Swedish company, Klarna, have been able to emerge as one of Europe’s largest and most disruptive banks due to their unique flexible payment options that enable customers to “shop now and pay later” in interest-free installments or through monthly payments with instant financing.

If you think about it, what these companies “do right” is to place the customer at the heart of their business. This helps them tweak their game plans along the way through data-driven insights into what their consumers want. In my view, in the marketplace of today where competition can come from anywhere, businesses would do well to keep a few best practices in mind. Embrace technology in all its advanced forms. Put the customer first. And strive to deliver suitable products and solutions that meet and exceed consumer expectations.

In the next part of this blog series, we shall turn our attention to discussing why it is important to “ask questions” to unearth new business models. We will discuss why re-looking at old ways is pivotal to disruption. Stay tuned!

References:

[1] https://www.washingtonpost.com/news/wonk/wp/2017/12/06/the-u-s-has-lost-its-lead-in-lasers/?noredirect=on&utm_term=.2b6788c3973c

[2] https://www.weforum.org/agenda/2017/05/tiny-israel-is-a-tech-titan-these-5-charts-explain-its-startup-success/

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