Blog #1 (F. 19)

Blog #1 (Fall 2019): Analyzing the External Strategic Environment and Evaluating Industry Dynamics

The growing capacity of technology and data processing has changed common mechanisms for strategy development. Across industries, a new form of corporate Darwinism favors those firms that can adapt fastest — and not those most “fit” (e.g., with resources, profits, and more) to compete.¹ This, as today’s tech and data-driven industries face fewer barriers to entry for substitutes, shifting power dynamics with consumers and suppliers, and are grappling with complex international trade markets that reflect decades of globalization efforts.² Companies must take bold, calculated (read: data-driven) risks to remain competitive, and in many cases to simply to stay afloat.

The degree to which tech, data, and globalization have impacted corporate strategy is partly reflected in the buzz-word notoriety of the age of disruption. More than just the latest app advent or convenient product line, some new companies influence entire industry structures.³ The threat of disruption can become a heavy burden for companies that are slow to align their broader strategies with newer digital capabilities. Michael Porter's seminal framework on corporate strategy has similarly seen updates to reflect the new dynamics that impact business-to-consumer relationships, in which consumers (and suppliers) have greater bargaining power.⁴

The worldwide reach of digital has also pushed market players "beyond globalization," as data and technology allows everyday people to easily extend beyond boarders. Leveraging "flows" between emerging markets in particular can have a multiplicative impact for entire regions, as with South and Southeast Asia markets.⁵ Yet forces such as policy and even local tastes can restrict corporate growth, e.g., WeChat in China as a platform-wide alternative to Facebook and other messengers.

For context, Uber is but one company exemplifying these trends. A recent New York Times podcast asked the question that is now refrain for the popular ride-share app on why the company has yet to turn a profit.⁶ Still a transportation industry disruptor, Uber has faced new and frequent competition. As a native New Yorker, I can recall comparing ride-share apps such as Lyft, Via, Gett, and Juno within the past few years alone. With few barriers to entry more locally, Uber quickly expanded globally in an effort to consume international markets. Yet consumer dynamics and local policies have limited the extent to which ride share companies have grown at larger scales. The company still goes to great lengths to remain competitive, including using some of its revenues to subsidize costs for new customers in hopes they remain loyal. These tactics cut into profits but also underscore a modern strategy wherein companies are willing to forego profit in favor of market share — a sign that companies are willing to compete long-term and for big gains.

I think the popularity of big data will continue to impact strategy development for decades still. Industries outside of the private sector are now experiencing the ripple effects of the data-tech boom, as governments and non-profits integrate data-driven models and new technologies into existing systems. With no end in sight, more policies that limit data flows and consider the impacts of technology more carefully may be the next great disruptor.


1. Barker, Joel A. “Corporate Darwinism.” Forbes, June 19, 2006. https://www.forbes.com/2006/06/19/opinion-commentary-barker-cx-jb_0619corporatedarwinism.html#59a80cd32589.

2. Porter, Michael E. “The Five Competitive Forces That Shape Strategy.” Harvard Business Review, January 1, 2008. https://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy.

3. Greenberg, Ezra, Martin Hirt, and Sven Smit. “The Global Forces Inspiring a New Narrative of Progress.” McKinsey Quarterly, April 2017. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-global-forces-inspiring-a-new-narrative-of-progress.

4. Ibid.

5. Dobbs, Richard, James Manyika, and Jonathan Woetzel. “Book Excerpt: The Four Global Forces Breaking All the Trends.” McKinsey Global Institute, April 2015. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-four-global-forces-breaking-all-the-trends.

6. Barbaro, Michael. Why Uber Still Can’t Make a Profit. The Daily. Accessed August 28, 2019. https://www.nytimes.com/2019/08/29/podcasts/the-daily/uber-profit.html.