Is Your Company's Game About To Be Changed?

Sunday, 04 May 2014 17:01
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When we read about "game changer" products, it is routinely from the perspective of the pioneer and the news generally features the attractive business growth their innovation has enabled for them. Less frequently, we hear about the companies that got "gamed", i.e. the ones that are negatively impacted by the disruption, and what (if anything) they are can do in response. Since change is inevitable, is your company ready for a category or industry game changer?

Curious to learn more? Read on, dear friends.

Is Your Company's Game About To Be Changed?

"Any business is vulnerable to a game change. What matters most is what to do about it."

The approaching storm.
In 1983, I doubt very much that the folks at Technics, at the time the market leaders in direct drive turntables, were pleased when Phillips introduced the world's first compact disc player. The same with Sony in 2001, when their wildly popular portable cassette and compact-disc playing Walkman devices faced competition from the iPod. Beyond the impact of these innovations on the principal competitors involved, also consider the profound effect on the companies (and their employees) that supplied the materials and manufacturing facilities to produce vinyl records, record needles, belt drives, audio cassettes and all of the other (relatively) soon-to-be-displaced components that preceded the digital "Big Bang".

The market responds to change...some better than others.
We know that the folks at Technics (Panasonic) soon addressed changes in market conditions and launched their own version of the pioneering compact disc player (not without first suffering loss of market share, however). However, no one has yet eclipsed iPod's stranglehold on the mp3 player market, because they engineered not just a well designed device, but a superior and seamless music purchasing and listening experience. It could still happen, but it will require a (pause...) game change.

In the face of emerging competing digital imaging technology, Kodak stubbornly refused to transition from analog technology even after it became clear that their market dominance in image recording would be eclipsed. Kodak went bankrupt in 2011, and sold off their analog manufacturing assets.

Similarly, in the mid-2000's Netflix overtook Blockbuster as the most popular provider of consumer video entertainment when they introduced their value proposition which eliminated late fees. Late fees were a major contributor to Blockbuster's business model ($800M in 2000). Blockbuster didn't adjust to Netflix's introduction in time to recover, having since gone bankrupt in 2013...but they probably could have survived longer if they were more nimble and proactive. Interestingly, Netflix offered itself for sale to Blockbuster for $50M in 2000...Blockbuster declined.

Consider your business and its vulnerabilities.
Any business is vulnerable to having its game-changed. Some are more obvious and predictable than others. I would describe electronic cigarettes as a game changer within the tobacco industry. While many of the incumbent cigarette brands now have or are developing entries in this rapidly expanding market, many others are only now playing catch up to brands like blu who pioneered the technology. (Lorillard Tobacco company acquired blu in 2012 to capture their brand awareness, market share and distribution).

P&G's Swiffer introduction within the consumer cleaning tools category has forever altered how consumers view and shop for these products. Similarly, Keurig has shaken up the home coffee brewing appliance market. I think that an argument can also be made for Beats by Dr. Dre to be a game changer, in that it shifted consumer perceptions of earphones from commoditized equipment to lifestyle accessory via a disruptive market positioning.

SWOT's Happening?
When you annually review your business as part of your strategic planning process, I imagine you routinely conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats). How much rigor is put into this analysis? Does it include a comprehensive assessment of external technologies, patents, and even niche competitive products that could potentially threaten your company's very existence?

Most change occurs from outside one's category rather than from within. Are you studying and considering how technologies from other categories can potentially be explosively redeployed within yours'? Can you figure out how to (intelligently) get there first? While one can't possibly anticipate every conceivable business threat, I suspect that some businesses are more diligent about conducting this analysis than others.

For perspective, I am currently becoming involved with a multi-patented technology currently being scaled. It promises to substantially alter the packaging industry. (I'll share details in coming weeks). I wonder how aware the industry incumbents are that they are about to face game change. I'm guessing that they are not very aware. The storm will hit soon enough.

In Conclusion:
Game change is inevitable. What matters most is whether your company is able to make it occur or if it is going on the receiving end...and what to do about it when it does occur.

Since 2005, BFS Innovations has helped its Fortune 500 clients with technology scouting, new business creation and development services. Contact Michael today at This email address is being protected from spambots. You need JavaScript enabled to view it. or at 614 937-2408 to discuss your company's needs.


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