The market place will always be dynamic and the external market changes. As entrepreneurs, we must learn to prepare for them and embrace the external change into our enterprise. Keeping up with the consistent market changes means structuring your company around the market and doing so faster than your competition.
Adapting to this change has never been more challenging than in today’s disruptive marketplace. The market today is filled with changes that can instantly put entire companies out of business and/or be displaced. The computer in lecture halls and every home is replacing many televisions and traditional cable lines with monitors and high speed internet.
E-commerce companies that were using dubious tactics to trick Google search engines have been instantly penalized resulting in the collapse of their company over a period of just a few months. Something as rapidly as the change in screen size preference due to cell phone use behavior can destroy a company that fails to adapt. Companies must be able to adapt to market environments and have preparation to ensure that their long term performance is sustainable.
Related: Three Ways to Increase Customer Lifetime Value
One case to consider is Ford motor company. It was the first company to enter the market with the Model-T at a time when transportation at that speed was not possible to automate at the consumer level. The advancement of new technology made consumers seek an automobile with more features and sleeker designs. Additional car companies created price constrains and introduced new designs that rivaled the old car company. The motor company was able to consistently keep up with the latest technology and outlived many interim competitors that failed to enter the market with any success.
However, not all companies have the same success that Ford motor company did changing their operations to meet the market. Borders is a company that failed to properly implement a digital book strategy and rapidly fell behind in the R&D process and was unable to keep up. Many of its brick & mortar stores closed due to decreasing demand and the market shifted to online sales. It lost many of its loyal customers because they could no longer bear the urge to use digital e-books and switched to a provider that had them.
These companies are far from alone in the dynamic marketplace and the purpose they fell behind seems foolish in hindsight, but executives that were doing the same thing their entire life have seen plenty of phases. Trends are short lived and pursuing them can only distract a company from what will genuinely bring them profits year over year. It is only reasonable that the company could believe that they may have an advantage by not pursuing what they perceived to be a trend by remaining focused on their core competency.
Management is now being trained in leading business schools to adaptive in the market as change as it grows. They are learning to distinguish short run trends to long term market changes and how they each impact the environment and company specifically. The best thing that a company can do is learn to do is understand what opportunities to pursue and how to properly manage the risk of their pursuit. Management that has the ability to accomplish this will improve the company’s ability to consistently outperform any of its competitors and remain relevant in the market.
Related: Building a Strategic Roadmap
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