Is the impact of non traditional competitors targeting your market a realistic scenario?

AMSTERDAM, Feb. 17, 2012 /PRNewswire-iReach/ -- By Richard Cornelisse

If it follows from benchmarking your competitors that the traditional way of working is still successful and has growth potential, is there a need to change?

The answer could be that the scope of the benchmark exercise might be too narrow, especially in case non traditional competitors are targeting your market.

Is the impact of non traditional competitors a realistic scenario?

The easiest way - without any further analysis - is to simply to deny or ignore.  The obvious arguments are our strong brand-name, our strong reputation and the strong position our company traditionally has gained in the market. Companies have responded like this and subsequently got burned. Ignoring innovation, being too self confident or underestimate technology developers, might not be a smart move. What can happen if you don't ignore? In the worse case scenario you can accept your position, reinvent yourself, set new strategic objectives and mobilize company's resources to realize new sources of income. The ability to change is less extreme if of course the company adapts it strategy and is capable to spot new opportunities and (re)positions itself.

Internet, search engines and social media

Both Apple and Virgin entered new markets, took market share and in some cases even market leadership.

Apple's iTunes store is a good example.   This store sells online music, applications (games and other third party software) and books. With Apple TV you can purchase or rent movies respectively television series. Simply download, watch, listen and/or read on all your Apple devices.

Who might have lost their longtime control over the market? The list is long but examples are (mobile) phone industry, music industry, gaming industry, printing industry, publishing, postal services, video rental industry, companies manufacturing DVDs/CDs, commercial radio and TV broadcasting, etc. When somebody wins, somebody else must lose.

People can connect with each other all over the world and talk Face to Face (including video conferencing). This is all 'free of charge' if you have access to wifi (e.g. via FaceTime / Skype). This was traditionally the home market of telephone companies. The world has become much smaller via Social Media and without any investment you can establish global reach. With the infrastructure, provided free of charge, you can connect with people, build and maintain networks, set up groups, communicate and share information. Many service providers invested over the years considerable amount of money in similar sophisticated infrastructures.

Companies like Google, LinkedIn and Facebook are not into charity but via these services establish their own objectives: getting more users, increasing their advertisement income and gathering data for market analysis. 

Many companies in the service provider industry sell content based knowhow. In the past that system was closed. Only a few organizations had access to specific content and often gathered via their worldwide network of people. The content had at that time  - under these circumstances - still a lot of client added value and therefore also market value.

The system evolved from closed to open due to internet innovation such as search engines and more people starting to contribute and share content. Information can be posted, forwarded, shared and communicated. This is all free of charge, all kinds of content can be searched, quickly found and is available 24/7 as long as you have internet access.

The consequence is that prices are going down and that the life cycle of this kind of products against consideration ends. Everybody can search and find it themselves.

The current impact of Google and Wikipedia is already huge as much content has become less valuable or even worthless from a pricing perspective. Will search engine functionality develop further? Will more content be available and contributed on the Internet? Without any doubt the answer to both questions is a confirmative yes.

Google the adviser of the future

I am following with interest the developments of Siri of Apple and Google in general. Siri is the speech recognition engine that Apple uses as virtual personal assistant for their devices. The software truly understands your questions, searches the web and gives you an answer immediately. Google's executive chairman Eric Schmidt, has conceded that Siri could pose a "competitive threat" to the company's core search business.

If that is the case is it not realistic to assume that Google and/or other companies are going to invest a considerable amount of money in developing similar functionality? Such competition between that kind of powerhouses will boost technology improvement.

Will such technology in the end truly understand all your technical questions raised? Is a virtual personal assistant going to respond immediately? Is this science fiction or our near future?

I am aware that people will have as argument that certain knowhow depends on individual skill set and their expertise.  They are right now, but they might be wrong from a future perspective.

Is that not something you can automate as well?

What do we have as an example that was successful and related to strategic insight and decision making. Chess is a strategic game and  relates on fact base information (pieces on the chess board: relevant facts) and a limited amount of possibilities (moves: calculation of impact of various options in combination with overall strategic insight).  If a chess-playing computer, Deep Blue, can win in a six game match by two to one with three draws against world champion Gary Kasparov, why is automation of strategic decision making of an adviser not possible. I am certain it can be done.

The good news is that the service providing profession is a people business. We like to be connected to people.  The success of social media as Facebook, LinkedIn, Myspace or all the dating sites have confirmed this as well.

Last but not least it is not my intention to write the strategy plan for Google. I just admire companies like Google, Apple and Virgin for their innovations and culture. In this Blog "Google" represents companies who are technology innovators. The future adviser could therefore be somebody else.

Media Contact: Richard Cornelisse Tax Management Consultancy, +31251215311, richardcornelisse@mac.com

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SOURCE Tax Management Consultancy

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