At The CEO Institute QLD Summit recently, Mark Anthonisz, PWC Chair in Digital Economy, shared his insights into what some of the warning bells might be that your future revenue is in danger:
- Your product has become a digital public good
- Your customers have become your competitors
- New digital products / channels are emerging
- Your customers want a platform, not a corporation
- Your customers are no longer 'locked in'
- Your customers are ageing with you
- Your customer revenue is in danger
Digital Disruption is no longer a fancy new-age concept. It is a real threat to many businesses, and it is already changing the shape of many industries, with many more significant disruptions to come.
Naturally, any business is vulnerable to disruption. Michael McQueen, international speaker and trends expert, says every one of the following three factors, either on their own or combined, will lead to change:
- High cost to value ratio
Any sector enjoying high margins is vulnerable to the entrance of lean and agile players who are willing to do more for less. Also, increasingly empowered consumers are always on the lookout for ways to circumvent a distribution process that adds cost without value (disintermediation). In many industries, retailers, advisers, brokers and agents are needing to prove the value they add. If the value proposition is questionable, and all they are offering is clip-the-ticket cost, consumers will be ruthless in their efforts to bypass them and go directly to providers.
When technology can provide an easier way to do things, industries are a target for disruption. Incumbents always face an uphill battle because their organisational structures, business models and operational paradigms are based on history. Abandoning approaches that have been profitable and comfortable in the past is a big challenge for many organisations.
- Market dominance
Arrogance can pervade in an industry where a small number of key players have dominated and remained unchallenged for a long time. When large companies control the market through manipulation of supply channels, the market longs for freedom and looks at innovation to compete with these players.
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