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It’s Time to ‘Do or Die’ in the Growing Global Bazaar

- June 8, 2016 - 0 Comments

A whopping 59 percent of manufacturers expect their company’s strategy to change as a result of real-time information in the next three years. That’s in just three years. But what about the years after that?

Our team developed The Business World in 2025 report with the Global Center for Digital Business Transformation, an IMD and Cisco initiative, to help executives begin to think about how to create a business strategy to thrive as everything comes online.

In my previous blog in this series, I presented an overview of the four scenarios we constructed for report. Today, I’ll share the scenario we call the Global Bazaar.

St Blog 1Since 2015, manufacturers, and other industries, began to ride the wave of the fourth industrial revolution powered by IoT. This revolution is changing the face of competition. As time marches on, it will become almost impossible to define who your competitors will be. In fact, it’s already happening.

We’ve all heard the stories. Uber. Airbnb. Amazon. This is just the start of a major transformation.

Gone are the days of facing a few new entrants in a market and deciding whether to take a defensive or an offensive strategy. Today, organizations have to walk a tight rope between the opportunities and threats presented by digital technologies and the value that customers demand. And it has to be done while preserving incredible trust to ensure customers that their data is safe.

The Global Bazaar contributes to these challenges. It’s a scenario of fundamental business transformation, based on the following three forces:

  • Global markets – international trade flourishes and companies can scale globally
  • Blurring industry boundaries – regulation supports business to compete across different verticals (e.g. by using technology to expand services)
  • Internet ubiquity – Internet access is ubiquitous and business and consumers are enabled by an open internet without boundaries

If approached with the right strategy, Global Bazaar is an opportunity to tap into entirely new revenue streams. At the same time, this scenario is wrought with corporate volatility because of its fluid markets and hyper-competition. In 2025, your organization isn’t guaranteed to have a stable business environment. So planning ahead now is critical.

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Global Bazaar: How Did We Get Here and Where Are We Headed?

Decades of globalization have created a more interconnected, interdependent, and complex world. The only constant has become change. Globalization comes with pros and cons that should be addressed at the highest level of the organization.

On the plus side, global markets mean organizations can expand globally and access new markets easily. Using technology as a key driving force, they can innovate not only in their own vertical, but across different verticals to compete in industries where they’ve never had a foothold.

Multinational corporations can globalize manufacturing, rely on just-in-time production, and integrate their supply chains. The result is the creation of a highly intelligent, central nervous system for a sophisticated global economy.

These globally integrated, digitally enabled companies become “digital disruptors.” They’ll be the organizations that will define what the future of the business world will look like in the Global Bazaar.

On the down side, the acceleration of global integration puts companies at risk of global economic shocks. Remember the 2008 global financial crisis? The Eurozone’s migrant and debt crises? What about China’s slowdown in 2015? The effects of these events are felt much more broadly and with a multiplier effect because of the tight integration of the global economy.

In the Global Bazaar scenario, global institutions, businesses, and executives need to innovate to stay alive. For multinationals the question becomes how to operate in a world where competition can come from anywhere? How do you protect your business in a global market? How will governments, in an open and integrated world, protect their economics from global shocks?

Global Bazaar: The implications for your organization

 Is your company agile enough to capture these opportunities looking forward? Would your company’s current value proposition still hold in Global Bazaar? Will talents be attracted to join your company in such a future dynamic environment? With competition coming from any industry or region, what will be the source of your unique competitive advantage?

The time to discuss these topics in your boardroom is now. Before competitors leapfrog ahead of you, before digital disruption makes your organization a dinosaur, and before you make, quite possibly, the most important strategic decisions of your career.

Join me next time as we look at Cautious Capitalism, a scenario that has only a slightly different point of departure, but dramatically different implications. Meanwhile, you can find the entire report here.

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