Disruption is in the competitive set.
We are entering a fragmented competitive environment like we’ve never experienced before. One where competition and disruption can come from any and all angles. Whether it’s a startup creating a completely new experience that takes away a specific pain point from your consumer, to a more established organization shifting their business model to leverage digital in a new way, the race to best service the consumer is in full force.
And really, that’s what disruption is all about - servicing a customer in the best way possible. Uber took the pain out of getting from Point A to Point B. Casper took the pain out of mattress shopping. Amazon took the pain out of ecommerce and delivery. These seemingly small changes from a corporate strategy perspective have made huge impacts on entire industries.
However, now we’re entering a more mature phase of disruption. Where market leaders are instilling a startup mindset to find new ways to disrupt themselves and their industries - working in a continuous beta mindset. This shift is expanding and accelerating the pace of disruption and competition across many industries.
“The reason why it is so difficult for existing firms to capitalize on disruptive innovations is that their processes and their business model that make them good at the existing business actually make them bad at competing for the disruption.”
To help identify where the next competitive threat or the next disruption in the marketplace will come from, we need to understand the categories of companies you’re now in direct or indirect competition with.
Traditional Incumbents
These are organizations that have been operating for decades, still leveraging their old playbooks hoping that something will happen to stop their growth decline. Looking at industries like Retail, CPG, FMCG and Automotive, industries where consumers are choosing ease and alternative to the mainstream. These companies have either avoided innovation or are drastically late to the game and are starting to divest or kill off business units or even claim bankruptcy.
Disruptive “Reinvented” Incumbents
These organizations (McKinsey calls them Reinvented Incumbents) have seen the transformation writing on the wall for the last 5-10 years and have started initiatives to completely refresh and disrupt their own business model, even if that means completely cannibalizing their core offering. Their innovation and transformation actions coupled with their market power are making waves in their industries and their organizations.
Disruptive Insurgents
Remember when we talked about disruption 5-10 years ago? These new startups that we thought would make a lot of noise then disappear? Well, they’re still here and are all grown up. These are later stage startups that have generated scale, stolen market share, changed consumer expectations and have started to expand their business model into a more well-rounded corporate organization. These companies like Uber, Airbnb, Spotify, Tesla and Warby Parker are continuously innovating and growing at a rate that is completely outshining others in their category and gaining the market power of industry incumbents.
Disruptive Startups
There is a lot of money in the VC world to invest in groundbreaking ideas and teams. And now, we’re seeing repeat founders coming back to disrupt more and more industries. These companies may not have the scale yet, but you can bet they are making new business models and new consumer experiences that will change the way business is done in certain industries.
Regardless of what direction you see your industry going, there is someone trying to disrupt it. And when they do, your industry will pivot, which means your organization will as well. The question now (not then) is, are you preparing your company for that inevitability?
How is your company preparing? Let’s chat.