Change direction or disappear!
Disruption occurs when new technologies or business models change the market so quickly that existing companies are unable to adapt to the new market realities fast enough. In the most extreme cases they can disappear from the market completely.
Whatever became of Kodak, Nokia or Blockbuster?
- Kodak was the world’s biggest producer of cameras, films and film printing papers.
- Nokia was the world’s biggest producer of mobile phones
- Blockbuster used to be the world’s biggest player in the video and games rental market.
All three of them didn’t react quickly enough to what happened around them and disappeared from the marketplace, all were victims of radical market disruption.
Are there any ”safe” business areas?
The short answer is NO!
For example, travel agencies face severe competition from online booking services like hotels.com or booking.com. Bookshops are finding it hard to compete with Amazon.com, Telecommunications companies face competition from Skype, WhatsApp and Messenger. Terrestrial and cable-TV fight for audiences against Netflix or HBO, print and TV commercials suffer because of Google and Facebook and newspapers are ”old school” compared to online media.
The list of business areas exposed to disruption is (almost) endless:
Uber challenges taxis and car producers, AirBnB makes it hard for hotels and B&B, GoMore challenges car dealers and railways and online supermarkets are popping up like mushrooms…
What is the answer to disruption?
Quite simple; disrupt your own business!
Or to be more specific – go digital!
Digitalization is the answer to almost every company.
For example, just look at Uber. This company plans the deliver the next major disruptive technology by buying the first 100,000 self-driving cars on the market. Compared with their business model of today Uber can make major savings by eliminating the cost of hiring drivers and disrupt the whole car and taxi industry.
The future they see means that nobody needs to own his own car when you can order one with just one call with an app on the smartphone.