Game Change as a Business Necessity
About 15 years ago, as video game sales began to dramatically accelerate at the expense of traditional toys, toy maker Hasbro initially responded by promoting the concept of Family Game Night. Their intent was to convince families to set a standing time to play (board) games together. They sought to help counteract changing consumer dynamics sparked by the popularity of (handheld) video games, which (at the time) tended to be more solitary pursuits. They wanted to position traditional games as a comfortable vehicle to help families spend time together. It wasn't a bad idea, but at best, it could only be expected to slow the bleeding as traditional game play was no longer closely matching consumer behaviors and attention spans. These classic products also lacked the dynamic visual elements and excitement that video games could now offer players. In other words, they didn't fundamentally change their products to reflect the new market conditions.
In the years that have followed, Hasbro has made their classic board games available in online, electronic and interactive formats. They have also reinterpreted Monopoly, Scrabble and other games to speedier versions that require much less time to complete than before. Net, they eventually responded intelligently (if somewhat slowly) to market changes to reflect shifting consumer preferences.
Years ago, Amtrak initially responded to declining ridership by creating advertising to convince lapsed passengers (lost to air shuttles) to rediscover the joys of rail travel...without first fundamentally altering the travel experience. Then, in the year 2000 they introduced their high speed Aceta trains, which began capturing some customers' interest and business. Then, following 9/11, airports began instituting heightened security measures which significantly increased the time that passengers needed to allot to air travel. Then, gasoline fuel costs began to rise dramatically. For certain routes, rail fares became highly competitive with those of air shuttles, without TSA lines and other delays. Amtrak trains offered free Wifi and the ability to use mobile phones throughout one's journey (unlike air travel). Certain routes can now offer significant time and cost advantages versus car travel. Amtrak passenger levels are now at or near all time high levels.
Quite often, a player from outside of a category will enter and dramatically change the existing game (e.g. iPod displacing the Walkman, Keurig reinventing fresh coffee brewing). Other times, some of the rules may change and we are forced to react to them. For example, watch as online digital media (e.g. Netflix, Spotify/Pandora) begins to seriously compete with traditional broadcast, cable or even satellite media. Kodak is a prime example of a company that failed to proactively adapt to the broad-scale shift in imaging technology from film to digital, which has ultimately caused them to go bankrupt.
It is essential to understand that in order to play to win, we must anticipate and proactively adapt to shifting market dynamics and technology trends or suffer the consequences of inaction.
This is one of the most compelling arguments for undertaking an ongoing external technology discovery mission. It is unwise to simply search in "all the usual places" for new ideas and opportunities...because that's likely not where the greatest competitive threats will emerge.
We will discuss this topic in greater detail next week.