How Likely Is Your Industry to Be Disrupted? (via @HarvardBiz)
“Nothing in life is to be feared; it is only to be understood” ~Marie Curie, who was awarded the Nobel Prize in Physics in 1903 and in Chemistry in 1911, had that point of view which would serve today’s business leaders well.
Understanding where your industry sits in terms of its susceptibility to disruption will help you make momentous strategic choices. The right time to start taking control of your unique state of disruption is now.
How Likely Is Your Industry to Be Disrupted? This 2×2 Matrix Will Tell You
In the durability state, companies must actively reinvent their legacy business rather than focus on preserving it. This means taking steps to both maintain cost leadership in their core business while also running extensive experiments to increase relevance — for example, by making key offerings not only cheaper but also better for their customers.
Those in the vulnerability state must address productivity challenges in their legacy businesses right away and thoroughly to get in shape for future innovations (their own or competitors’). One way is by reducing dependence on fixed assets. Another is by taking underused assets and monetizing them. Leading independent power producers, for example, have begun to deploy asset-light, platform-based business models.
For companies in the volatility state, decisively changing the current course is the only way to survive. Rather than simply abandoning the core business, companies will need to strike a delicate balance when making corporate and financial restructuring moves.
Companies in the viability state must embrace strategies that keep them in a constant state of innovation. This involves increasing the penetration of innovative offerings with existing customers while expanding aggressively into adjacent or entirely unchartered markets by leveraging the strength of their core business.
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