I have always wondered what the disrupting forces are, for the 21st century, because there are just too many “big changes” happening right now, in my opinion. The article “The four global forces breaking all the trends” published by McKinsey and company, gives a great answer to my question. The authors have chosen four current changes to describe the causes of the ‘next revolution’, and it is hard to disagree with them. Personally, I could relate with three of the four.
The first trend mentioned by the authors is the shifting of the locus of economic activity to emerging markets. Being in India for more than a decade before coming to Carnegie Mellon to pursue my master’s degree, I have experienced this shift myself. A lot of development has happened where I live, and it was not hard to notice the largest companies of the West such as Google, Microsoft, Uber and Amazon have established their largest campuses there, outside of the United States. It makes sense since nations such as India and China account for 36% of the entire population on earth. The fact that these markets are not fully developed makes it easy to enter and hence, increases scope for business.
The next trend the authors talk about is the innovative technologies born every new day. A good example of this is Uber, which has grown into a 10 billion dollar company with presence across 570 cities globally, in just 8 years. For many of us, Uber has become another utility in life, just like water and electricity. This was made possible only by technology.
The final trend in the article is how trade has been transformed to connect every one across the planet, making transactions easier. My father reminds me how he had to send money only by money orders from banks when he had to pay someone who was not local to where he lived. Today, we have apps such as Venmo that have simplified payments for us. More recently, even WhatsApp and Facebook have begun introducing money-transfer features.
Bringing the attention back to strategy development, it is important we ride along and not behind these trends that will revolutionize the market. We cannot afford to use traditional approaches guided by intuition to shape our strategies anymore or else, our businesses run the risk of going obsolete. A classic example in this perspective, is how Blackberry failed to keep up with Apple and Google, despite being in leadership position 10 years ago. The reasons behind Blackberry’s failure align greatly from what I have been discussing in this blog.
Blackberry did not realize the true trends of the current market, and got complacent. They did not prioritize innovation (at least not fast enough) while a few other firms were working on ground-breaking technologies. For instance, they were blindsided by the emergence of “apps”. They also failed to see that smartphones can go beyond just communication to become entertainment hubs.
In conclusion, it is important to study the conditions of the market, especially the four forces and begin shaping strategies for the future of our businesses.
India and China population: http://statisticstimes.com/population/china-vs-india-population.php