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jerryking : industry_boundaries   4

Looking Ahead After a Quarter Century Into the Digital Age - CIO Journal
Aug 16, 2019 | WSJ | By Irving Wladawsky-Berger.

* Large economic potential is linked to digitization—and much of it is yet to be captured
* Digital superstars are rising far beyond the U.S. big four and China’s big three
* Digital natives are calling the shots
* Digital changes everything—even industry boundaries
* Agile is the new way to compete
* Playing the platform economy can boost earnings
* Self-cannibalization and innovation are a necessity for digital reinvention
* Going after the right M&A is key
* Effective management of digital transformation is vital—but challenging
* Leveraging and transitioning from digital to new frontier technologies is an imperative


Effective management of digital transformation is vital—but challenging. High incidences of failure can be found across industries and countries regardless of the objectives of the digital transformation, including customer experience, the most common type of transformation.

The report recommends five key actions to improve the odds of a successful digital transformation: shared responsibility and accountability; clarity of objectives and commitment; sufficient resources; investments in digital talent; and flexibility and agility.
artificial_intelligence  digital_economy  digital_natives  digitalization  industry_boundaries  insights  Irving_Wladawsky-Berger  McKinsey  M&A  millennials  platforms  self-cannibalization 
august 2019 by jerryking
Business leaders are blinded by industry boundaries
April 22, 2019 | Financial Times | Rita McGrath.

Why is it so hard for executives to anticipate the major shifts that can determine the destiny of their organisations? Andy Grove called these moments “strategic inflection points”. For some, he wrote, “That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

Industry leaders would do well to focus on productive opportunities, even when they lie outside a fairly well-bounded industry. Want to survive a strategic inflection point? Stop focusing on traditional metrics and find new customer needs that your organisation can uniquely address.

Why do business leaders so often miss these shifts? Successful companies such as BlackBerry maker Research In Motion and Nokia did not heed the early signs of a move to app-based smartphones. Video rental chain Blockbuster failed to acquire Netflix when it had the chance, in 2000.

Senior people rise to the top by mastering management of the KPIs in that sector. This, in turn, shapes how they look at the world. The problem is a strategic inflection point can occur and render the reference points they have developed obsolete. Take traditional retail. Its key metrics have to do with limited real estate, such as sales per square metre. Introduce the internet and those measures are useless. And yet traditional systems, rewards and measures are all built around them.....British economist Edith Penrose grasped this crucial link, she asked, “What is an industry?” In her studies, executives did not confine themselves to single industries, they expanded into any market where their business might find profitable growth.

Consider the energy sector: Historically, most power generators and utilities were heavily regulated...The sector’s suppliers likewise expected steady demand and a quiet life....that business has been rocked by slow-moving shifts many players talked about, but did not act upon. The rise of distributed energy generation, the maturing of renewable technology, increased conservation and new rules have eroded the traditional model. Many failed to heed the warnings. In 2015, General Electric spent about $10bn to acquire Alstom’s power business. Finance chief Jeff Bornstein crowed at the time that it could be GE’s best acquisition ever. Blinded by traditional metrics, GE doubled down on fossil-fuel-fired turbines just as renewables were becoming cost competitive.

Consider razor blades: Procter & Gamble’s Gillette brand of razors had long enjoyed a competitive advantage. For decades, the company had invested in developing premium products, charged premium prices, invested heavily in marketing and used its clout to get those razors into every traditional retail outlet. A new breed of online rivals such as Dollar Shave Club and Harry’s have upended that model, reselling outsourced razors that were “good enough” and cheaper, online via a subscription model that attracted younger, economically pressured customers...... Rather than fork out for elaborate marketing, the upstarts enlisted YouTube and Facebook influencers to get the word out.
Andy_Grove  BlackBerry  blindsided  Blockbuster  brands  cost-consciousness  customer_insights  Dollar_Shave_Club  executive_management  GE  Gillette  good_enough  Harry's  industries  industry_boundaries  inflection_points  Intel  irrelevance  KPIs  metrics  millennials  movingonup  myopic  obsolescence  out-of-the-box  P&G  power_generation  retailers  reward_systems  sales_per_square_foot  shifting_tastes  slowly_moving  warning_signs 
april 2019 by jerryking
Look to Giants, Not Start-Ups, for Innovation
From the Wall Street Journal
Informed Reader
November 20, 2007; Page B8

When people think of radical innovations, they usually think of start-ups that shake an industry from the ground up. Some sectors are hobbled with "intractable, industry-wide problems" that only a large company can solve, says Mr. Grove, the co-founder of Intel. Mr. Grove, who has been researching the phenomenon with Stanford Graduate School of Business professor Robert Burgelman, calls this "cross-boundary disruption." Crucially, the industry on the other side of the boundary is "stagnant and populated with companies that cling to doing business the way they always have."
Andy_Grove  Apple  brands  breakthroughs  cross-boundary  disruption  industry_boundaries  innovation  large_companies  moonshots  Fortune_500  GE  stagnation  start_ups  Wal-Mart 
june 2012 by jerryking
globeandmail.com: All's fair in love and war, but hard to measure in business
April 26, 2010 | Globe & Mail | GEORGE STALK JR. "These
laws also mean that the informational "glue" that defined the boundaries
of industries and companies is dissolving, enabling industries to be
redrawn again and again. Companies can no longer rest comfortably in a
market position but must continually cannibalize their own and their
competitors' positions; incumbents must go on the attack to remain
viable....These competitors will not target product-market niches, but
instead define their business as the layers of events and processes that
produce a product or service, as Microsoft and Intel have. This will
happen not only in high-tech and communications but also in industries
such as biotech, media and retail. We already see successful strategies
of "layer mastery" in payments processing, contract electronics
manufacturing, and aircraft leasing. Industries and markets will be
redefined in ways that will make the traditional assessment of "fair"
increasingly difficult.
George_Stalk_Jr.  competitive_landscape  competitive_strategy  Intel  Microsoft  Google  Moore's_Law  Gilder's_Law  Metcalfe's_Law  Coase's_Law  complacency  layer_mastery  industry_boundaries  offensive_tactics  BCG  kaleidoscopic  informational_advantages  product-market_fit  market_position 
may 2010 by jerryking

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