We're on the verge of a new era
Strategy has been typically been the provenance of scarcity. Highly skilled professionals with access to private, curated data sets have seemingly cornered the market. In turn, this scarce strategic capability hands a big competitive advantage to organizations with lots of time and money. However, that is all beginning to change.
What does this new era look like?
It would be super easy to point to the recent pandemic, geopolitical issues or the rise of AI technologies and say that the world has changed. However, there is no one event that provoked our current state of business. If fact, it is the culmination of many different things. However we got here, it is mandatory for leaders to understand that generating organizational value requires a new mindset. A mindset based upon the movements of the market to develop an accompanying set of strategies for growth. Being market centric will drive new innovation that will eclipse the reliance on financial engineering of the past 3 decades. Market centric strategies must at least contemplate the following trends.
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Trend 1 - Micro is the new macro
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The key to big enterprise value used to be all about maximizing market traction in the biggest market possible. However, technology and global competition has accelerated the pace of commoditization. The one size fits all solution now only guarantees low margins and reduced customer loyalty.
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Success now is defined by changing to a market centric approach by unlocking high value in focused market areas. This enables an organization to tailor their solutions to unique customers needs. Need proof? Variants and low cost copies of many hard products are available online within weeks of initial availability. Large tech firms have increasingly acquired industry vertical product and expertise in the past 10 years. Everyone needs to rethink who they engage and how to generate maximum customer value in increasingly smaller, more diverse markets.
Trend 2 - Data and AI flips norms
Even if you are a true visionary with a totally disruptive solution (and by the way congrats - you are 1 in a million) you still need data to inform your decisions. The prior practice of carefully curated privately held historic business data is less helpful when it comes to looking forward. Historic data may inform you about your business baselines and readiness to change, but a market centric view is now mandatory to develop new growth strategies. An internalized and historic approach is a contributor to why about half of a strategy projects fail.
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The good news is that access to low cost AI tools and data sets is a game changer. By leveraging AI and a combination of skilled SMEs to train and prompt common and free market data, you can get a force multiplier. effect over traditional and costly methods. Additionally, you get a level of scale and granularity that is impossible with data analysts or consultants. For instance, instead of taking weeks or months to evaluate your top 5 competitors, you can analyze hundreds of potential competitors in hours to days. Machine learning can normalize diverse and complex market data sets and create market models that are customized to your business vs. the interpolating a whole market category.
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In short, data, the secret sauce of strategy is now easier and faster for you and your competitors to acquire.
Trend 3 - Boundaries are blurring
Customer value chains are undergoing a radical transformation. Go to market tactics from before the COVID age are either less effective or competing with new emergent ideas. It is harder to build meaningful relationships with customers face to face. A common approach to respond is to lay low and maximize your base vs investing in new approaches.
However, that too is changing. Employee needs and demographics will require a technology or infrastructure refresh to meet SLA's. Diminishing financial returns from an increasingly competitive and commoditized markets will drive a focus towards innovation and overall customer experience.
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In some cases, it may be too hard to service these specialized customers. In those cases, new buying patterns and ecosystems will emerge so customers can get a more tailored experience. How companies adapt to these requirements will dictate their ability to meet revenue and margin goals. This is not an easy set of adjustments and many companies will need help. Partnering and collaboration will be vital to long term business sustainability.
Daruma's role in the new era
Our mission is to help customers solve the common problems of strategy and product planning by leveraging deep subject matter expertise with a market centric approach and AI tools. We can help companies from Ad-hoc consulting projects all the way through building a AI driven corporate strategy function into your business.
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