There follows a translation of key environmental factors into ‘mega’ trends which, no matter what sector or type of business you are, if you are developing strategy in 2018, you will probably need to consider.
(Social) change is in the air
It’s hard to escape the current social phenomenon which sees many searching for more purpose in their role and company. A convergence of Generation X, Y and Millennials’ values have created a different expectation of working and how it fits into the overall work-life balance.
So, if you are looking for market opportunities, developing products and services which offer consumers social purpose may meet these needs and provide a competitive advantage. Discovering or rediscovering meaning for businesses shouldn’t be confined to the realms fair trade and CSR, the opportunity lies in finding purpose in all industries and products so that purpose is what business IS rather than does.
Internally, you need to ensure that your employer offer is consistent. Providing purpose for customers must be borne out of an internal desire for meaning and a commitment to offer staff a better work-life balance. This alignment is not only a great way of retaining the right kind of staff it is, and will increasingly be, fundamentally a key competitive advantage.
The tech hype whirlwind
The disorienting mix and speed of artificial intelligence and ever faster digital processing speed provides a significant challenge to companies to navigate. Being paralysed by the uncertainty shouldn’t be an option and Andrew Mcafee and Erik Brynjolfsson’s ‘Machine, Platform and Crowd’ structure is a useful way of thinking about how the technology may affect your company and market.
Using technology this way is essential, but so is knowing when not to over-engineer a service or products.
In 2018 there should be a renewed focus by strategists on ‘what problem are we solving?’. There is a huge array of ways tech can change a business, but essentially the focus should be on the needs addressed and how these are met in a way customers value.
The rise of super convenience
Advances in micro-processing and manufacturing have exploited tech to the extent that much of the retail and service sector is expected to be carried in the pocket – literally. Smartphones and tablet computers have given consumers this power and as such the very least that customers expect is super convenience through a ‘mobile’ experience.
Greater tech content can reduce costs but fundamentally the adoption of on-line retailing, tele-medicine and music consumption etc. is based on the customers’ ability to order or use services in a more flexible way. The trap to avoid is assuming that the benefits are confined to retail/consumer markets; all industries are ripe for the super convenience revolution. As a strategist, you need to explore the potential for more customer convenience in all sectors and how that can take place throughout your business.
Personalisation as standard
The changes brought about by the internet and the digital revolution have tapped into a latent customer desire that has been the holy grail for strategy since the phrase ‘mass customisation’ was coined over 20 years ago.
Until recently examples of large companies being able to tailor their offer to individual customer needs has been limited. If a company couldn’t oblige it wasn’t a game changer. Now there is a growing expectation that services and products should be personalised and the race is on in many industries to make this a reality – witness the development of on-demand fashion. As such, expect to see some big announcements in industries that promise a personal and personalised value proposition which offers a total experience, not just a technical solution to a need.
The M&A Wild West
The pace of technological change, political uncertainty and disparate levels of economic growth around the globe have created a climate where for offensive or defensive reasons, the level of mergers, acquisitions and collaborations has been increasing recently and seems set to continue.
As an ambitious company you may be a target for M&A, or conversely you may look to respond to the competitive challenges by acquiring or merging businesses. Flux can sometimes lead companies to turn inwards leading to a comforting focus on what they know. For 2018, the message is that it’s imperative that you open up options and consider external collaboration as a serious route to long-term growth.
In 2018 the US Mid-Terms, German Coalition building, Catalan independence movement, Macron’s French domestic reform programme and Brexit all reach a crescendo. A highly volatile political backdrop in 2017 hasn’t restricted global economic growth much, but it does mean some long-term commitment are difficult to make.
Rather than be an observer or make premature commitments, try to ensure that at the point of clarity, you are able to act. Don’t expect everything to be crystal clear any time soon, but ensure you use the available information for scenario planning so that you can quickly make the change needed. 2018 is the year to dust down those skills and build this organisational capacity.
Focusing on these areas from the New Year onwards should help your business prepare for and optimise key external changes to get or stay ahead of the competition, whatever industry you are in.
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