The Digital Age has transformed the way companies interact with their consumers. Traditional barriers to entry have been shattered by the ease at which start-ups can create and promote disruptive technologies.
It’s of paramount importance that companies improve their digital strategies at the same pace as cyber criminals develop their criminal approaches. The need for this has accelerated even further since the emergence of Big Data as cyber criminals try their upmost to steal the reams of data now captured by major corporations.
But data is not the only thing that today’s companies should be worried about. The digital age has shrunk the product lifecycle, meaning that companies must innovate constantly to ensure that they don’t become defunct.
The shifts that occur within the digital landscape are fairly predictable and follow an almost predetermined evolution.
Established companies begin to see new trends happening in their industry, these are normally technological advancements that improve efficiency or deliver a new stance on a preexisting product.
The companies adopting these new, innovative approaches, find that their ideas become duplicated until a time where their way of doing things is less disruptive and more the industry norm.
A great example of how this cycle can be disastrous for major companies can be seen in the DVD rental industry. Blockbuster, an established industry leader at the time, didn’t keep tabs on the ever-growing popularity of peer sharing and ultimately succumbed to their inevitable bankruptcy in November 2013.
The upshot of this is that competitors can emerge at anytime and from anywhere. For a major corporation, these smaller companies may never match their current earnings, but their very presence can inspire a new era for an industry, an era where the established competitor’s products are defunct and inefficient.
Had Blockbuster had their time again, I am sure that they would have utilized their on-demand service more readily and perhaps moved their entire operations online. Having said that, for a company that employed thousands of workers, this is all well and good in theory, but an extremely difficult operation to put into practice.
The vested interests at Blockbuster would have made it almost impossible for them to operate effectively in the digital age. Their once firm grip on the rental industry has now been taken away by on-demand services like, Amazon Prime and Netflix.
The answer then is to manage digital change in an incremental manner, adopting new strategies one at a time and integrating them with your staff slowly, but productively. Blockbuster were too far-gone to go from a bricks and mortar giant to a streamlined on-demand service in a short period of time.
Companies need to be vigilant as to the emergence of new competitors and understand that the barriers to entry that one held them in such good stead, are lower than they’ve ever been before. The best companies will meet these challenges head on and solve them in a manner that the digital-era demands.