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New, Disruptive Technologies & Trends in Your Industry: Hype or Reality?
New, disruptive technologies and trends can provide opportunities for growth. But as an enterprise or business unit leader, how do you know if the trend is temporary hype or if it’s becoming a new reality? How can your company evaluate and test opportunities for growth without negatively impacting existing businesses and important relationships? And if it’s determined that the trend is here to stay, how do you set your company up for long-term success in the new environment?
In a recent engagement, Blue Canyon advised a supplier to the automotive industry on the emerging opportunities driven by the accelerated adoption of electric vehicles. A comprehensive assessment of the global automotive market confirmed the growing interest in more environmentally friendly automotive platforms. Once it was determined that an investment in electric vehicles could provide a substantial growth opportunity, Blue Canyon identified how the client’s current capabilities could best fit in the new market. The approach used to evaluate the shift in the market and determine the best way to take advantage of the changing environment is applicable to many businesses and industries. By following the approach outlined below, a company can determine if the big, new trend in their industry is worth pursuing and how to pursue it.
1. Identify key factors fueling change
It’s important to take a step back and look at the broad market dynamics that could influence the adoption of the new technology or trend. Certain factors will fuel the evolution, such as government incentives or cost saving initiatives, pushing customers to adopt the new technology. Others are headwinds, such as large infrastructure challenges or a limited supply of raw materials that could prevent widespread adoption. As a new trend gains traction, company leaders need to determine which key factors will have the most influence and whether these factors vary by geographic region. All new opportunities will have their obstacles, but particularly strong headwinds will decrease the rate of market growth, or even cause the market to shift back to previous norms.
2. Understand changing value drivers
Once it has been determined that the market is transitioning, you need to understand what will matter to customers as the market changes. How will adoption of a new trend effect the offering that your business or other companies bring to the table? In the case of the previously mentioned automotive client, Blue Canyon determined that thermal management of automotive systems would matter far more in a market where electric vehicles were prominent. As a result, the client decided to focus on its thermal management capabilities to prepare for a shift in customer needs. Understanding how value drivers will adjust with the new trend is an essential part of staying ahead in the adapting market. A value-add that once made your business a best-in-class player, may become less relevant. Alternatively, some of your business’ other capabilities may work well in the new space, presenting ample opportunity for profitable growth.
Related Reading: How to Thrive in a Disruptive World
3. Assess the customer chain – value chain and shifting market players
Evolving market dynamics will create disruption along the customer chain – value chain. This disruption could affect current business models, diminish the influence of previously dominant suppliers/customers, or result in a brand-new player entering the customer chain – value chain and having substantial impact. Understanding these shifts is required to prepare your business for an upcoming transformation. It’s important to gauge where your strong relationships lie and how important these relationships will be in the future. For example, having a close relationship with a certain industrial supplier may have been essential in the past, but a push for new, sustainable technology may limit their ability to provide value to customers in the new environment. It may be time to divert resources to players that have hedged their bets with R&D initiatives or to start building relationships with companies whose offering goes hand in hand with the market evolution.
4. Prioritize opportunities that fit well with current capabilities
The next step in preparing your business for an evolving market is to align your organization’s capabilities with future, attractive opportunities for growth. Taking full advantage of the evolution will require a strategic investment and a measured risk assessment rather than a kitchen-sink approach that throws resources at any and all opportunities that arise. A successful, long-term strategy will combine your business’ current or core capabilities with the more forward-looking opportunities in the market.
Opportunities with both high levels of attractiveness and ease of addressing are those your company should prioritize. Focusing on those specific opportunities will help your business get ahead of the trend and new market dynamics, while still building upon the core competences that allowed you to be successful in the market originally.
Related Reading: Stay Ahead of the Game: How to Recognize and Respond to Disruption
For many B2B companies, historical success in driving growth is often based on expanding assets and continuous improvement in what they do today, but in an ever-evolving market shaped by new technologies, global dynamics, and environmental concerns, it’s essential to evaluate transformative trends and assess their long-term influence and impact. Taking a strategic approach to align your business with the transformation is required to get ahead of the game and avoid falling behind.