Business models that leverage vertical and horizontal integration common in the post-industrialisation era are becoming increasingly challenged, given weakening regulatory barriers and an ever more competitive landscape. Save for a handful of global players that leverage their large scale to gain market power, most businesses operate at a local or regional level where disruptions are happening at multiple parts of the value chain, thus creating a multi-prong attack on incumbent business models. To add, (i) boundaries between business adjacencies are blurring as players cross into each others paths to pursue new growth opportunities, and (ii) broad customer eco-systems come to the fore as primary platforms of choice for consumers. The solution in our view is to not insist on owning everything, and instead to make a conscious and proactive effort to adapt the business into its surroundings, through complementary and enabling coalitions, cooperations and partnerships within and across markets.
#partnerships #BD #cooperation #coopetition
The challenge: a changed marketplace
It is hard to overlook how much change the marketplace is undergoing. Globally dominant international players are literally at the door, disrupting local businesses through superior products, better pricing power, superior supply chain economics, and more cost efficient operations, thus forming a plethora of substitute choices for consumers. The pace of change is steady but momentum is picking up, especially as the internet becomes a more central medium in consumer interactions. Reach and engagement with audiences are similarly being controlled by global players who have strong influence on what consumers see, and how consumers engage with brands. These global players are better funded, more agile, have better business models, and are superior in almost every way. Is it game over?
Greater competition: XX
Blurring boundaries: Consumer businesses, particularly where digital features as a mode of interaction, are undergoing a shift towards blurring of boundaries between business domains. What was previously
No industry is safe: XX
Intermediary platforms as gatekeepers: XX
Eco-systems are scary: XX
By way of example, consider the following;
X
In this environment, it is impossible to maintain dominance
In progress
Eco-systems
In progress
Eco-systems
In progress
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