Strategy making in a disruptive environment

We can affirmatively accept that disruptive technologies are taking over the world. It is quite clear that a company needs a strong and effective strategy to thrive during these times. Strategy making in a disruptive scenario differs from one technology to another technology. For the ones with a high barrier to disrupt, cost leadership is efficient enough to outplay your competition; but for the ones with low walls to obstruct, competitive pricing is not just enough. Many companies feel happy with their existing strategy when it works out for a while. Due to ignoring the theory of disruption, many companies pay a dear price of losing their market share.

Nokia is one of those companies that fall under this category. Nokia was the mobile phone market leader for more than a decade, starting from the early 2000s. Nokia started dwelling in its profits and market share that it completely ignored the smartphone disruption. Lack of perfect strategy to tackle the disruption of mobile industry made Nokia pay hefty amounts.

Apple came out with its iPhone in 2006. Twelve years later, it still has its customer base, which can not be taken away quickly. Apple did not commit the same mistakes as Nokia did. Apple always kept improving its products in a predefined span to appeal to its customers. Nokia intentionally ignored the warnings coming from its customers. It continued the same strategy which it has followed for several years; even after Apple has introduced its cutting-edge smartphone. Nokia’s downfall happened much later when Samsung started taking over the smartphone industry. Samsung produced smartphones in various price categories to take over Nokia’s customer base. When Nokia realized that it is losing its stronghold, it was too late. Nokia even tried partnering with Microsoft to bring its new smartphone in windows segment. Nokia decided to play Apple card. It was like throwing a bucket of water into a wildfire. Nokia failed miserably.

Then what is the ideal strategy to tackle disruption? There is none. It differs from company to company. It is also dependent on the industry the company in which the company operates. Companies now have realized that they can predict disrupting technologies through data analytics. Indulging data analytics into the company’s strategy is a brilliant idea. This data can be acquired through surveys and existing customer reviews; this will give the company a reason to re-evaluate and develop a new strategy, thereby protecting its strong foothold in the industry. Going back to Nokia again, they had the data report for what the customer base wanted and what was incoming. They did not pay much heed to it. Data analysis is one of those measures to tackle disruption. It cannot guarantee a company’s position just because data said so. There are a lot of other internal and external factors that play a significant role in determining the strategy for a company, in disruptive times.

References: https://www.marketing91.com/nokia-lost-market-share/