Disruption is now widely spread and relatively well recognised throughout the global economy, but dealing with it is another matter. This challenge is central to the agenda of strategists and decision makers in every industry, particularly among Telecoms, Media, Technology, Retail, Finance, and Consumer Brands. What are the key factors, lessons and strategies for success in the increasingly dynamic and complex digital ecosystem?
We’re developing a major new research stream on ‘Dealing with Disruption’ to help strategists and decision-makers develop successful new approaches to defending, evolving and growing their businesses. We’re also exploring disruption in Telecoms, Cloud, Big Data, Commerce, Content and Enterprise Mobility at Digital Asia 2014, Bali, 2-4 December. To find out more, or if you’d like to join us, please email email@example.com.
Playing ‘The Great Game’
Back in 2011, when we published Dealing with the ‘Disruptors’: Google, Apple, Facebook, Microsoft/Skype and Amazon, the key driver was the desire for telcos to a) recognise the threat from, b) understand the drivers of, and ultimately c) develop strategies to deal with the wave of impending disruption from so-called ‘Over The Top’ (OTT) and Internet-based services. One output of the report was the outline of ‘The Great Game’ – the battle for key areas of the digital economy, and how the players were using disruptive strategies to build defensible platforms of their own.
To some extent, the industry has started to get to grips with this emerging landscape. For example, we found major differences in the effectiveness of different telco strategies to pricing threatened services, as illustrated in the following chart from The Future Value of Voice and Messaging.
The chart shows a vastly higher penetration of OTT apps in Spain, a weakened European economy where each text cost an appreciable amount (c.$0.15) and many times what it would cost in the much stronger US economy, where the effective price was at that time already less than one Cent ($0.01). [NB Text usage and spending is also much higher in the US and much lower in Spain]. We think the lesson from this is that ‘free’ is not necessarily the issue in all cases of disruption – it is the perception of an inconsequential cost of usage that is key to consumer behaviour in this respect.
Also, the then-disruptors now face disruption themselves. For example, in Google’s Big, Big Data Battle we recently highlighted how Google’s core business is under increasing pressure, and we will soon publish further analysis of the struggle between Apple and Samsung. Facebook is continually under scrutiny for signs of the impact of the ‘next big thing in social networking’, the latest of which being Ello, which bases its disruptive strength on attacking Facebook’s advertising revenue stream by promising a private and ad-free service.
So while the market has developed, it is constantly changing and fast moving. It can be a challenge to stay abreast of it, yet alone develop effective strategies to succeed in it.
How to play better?
The general factors that we believe are necessary to develop effective disruptive strategies and responses are:
- The development of individual and corporate ‘digital mind sets’ that enable efficient decision making and aligned actions;
- Increased awareness of and alertness to the possibilities and the speed of change;
- Better understanding of cross-industry perspectives on lessons, issues, threats and opportunities;
- The development and adoption of approaches, capabilities and technologies that enable sufficient speed and effectiveness in action.
To this end we intend to bring the best of our knowledge and experience to bear together with some of the best practitioners in the field through our research and events in the coming year.
As part of this, our next public event will bring together c.250 senior execs at our Digital Asia 2014 event in Bali to brainstorm:
- Findings from the Telco 2.0 Transformation Index and how to transform the telecoms technology stack;
- The latest disruptive developments and strategies that telcos can bring to Cloud and Enterprise Mobility, and how these technologies can themselves transform businesses;
- The role of Big Data for both commercial ends in telcos and other industries, and for governments and not-for-profit organisations aiming to solve major challenges relating to poverty and the spread of disease;
- How the Digital Entertainment market is being reshaped by content providers, brands, and other players looking to create new service and distribution models;
- How Digital Commerce is going mobile, and how players in different sectors can profit in this major disruption.