TECH TALK: Extreme Competition: The New Competitors

Peter Fingar writes in his book Extreme Competition:

The new breed of 21st century business competitor has fused its business operations and technology to the point of unity, where the technology and the business leaders of winning companies are no longer at loggerheads, they feed off each other.

This new breed of companies uses the Internet as a digital nervous system to make deep structural changes in their core business processes.

They innovate not just with clever new products, they innovate with the services wrapped around those products: OnStar, originally developed from the work of Blue Octane, an IBM ExtremeBlue internship team, allows General Motors to sell you, not just a car, but an ongoing service that provides peace of mind on the road.

They innovate by how they operate, how they deliver their services, how they do what they do, the ways they conduct their business operations at the delight of their customers. They go beyond just delivering products or services, and, as Starbucks taught us, on to delivering experiences that command a premium, and even change lifestyles.

They go to the ends of the earth to employ $.09 an hour factory workers and $20,000 per year PhDs in science and technology.

They disrupt their industries by weaving a tapestry of business processes with trading partners that allow them to offer unprecedented convenience and affordability to their customers, especially those who were nonconsumers before a game-changing innovation was introduced. For the pioneering Indian company, Novatium, with its slogan, computing for the next billion, the market for affordable computing for the masses ($100 PCs) in countries like Brazil, China, India, Russia, and the working poor in developed countries is the computing worlds next frontier and biggest pot of gold.

They seek University of Michigan business expert, C.K. Prahalads fortune at the bottom of the pyramid. Prahalad is author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits. While most companies continue to focus on the wealthy Western markets for selling their goods and services, Indias Tata Group is building the $2,200 car. From the $100 PC to the $2,200 car, innovations that allow companies to make a profit in underserved markets will no doubt find their way to even the wealthiest nations. Companies that miss this trend will not only miss out on the emerging markets in Asia, the Middle East, Africa, and Latin America, they will come to find fierce new competitors landing on their shores and wreaking havoc in established markets (call it blowback if you like), regardless of a countrys wealth. Necessity truly is the mother of innovation.

They spin a digital information web that can pick up on far away demand signals, sensing and responding to the slightest of vibrations from activity on the Web (technically called complex event processing). They use real-time information, generated both within the firm and across the value-delivery system, to trigger custom business processes to get work done over the Webfor their customers, employees, suppliers, and trading partners.

Their call center volumes decline as their customers and business partners solve their own issues by tapping a digital concierge who serves up process-powered self-service, gaining double leverage by slashing customer care costs, while delighting customers with a whole new experience of self-reliance.

They make-to-demand rather than make-to-forecast, and demand signals drive not only their flexible manufacturing, but also their flexible R&D portfolios.

Information is power. Also thanks to the marvel of our time, the Internet, the customer has the information, hence, the power, to demand what he or she wants, when, where and at what cost.

And the newly empowered customers demand that the goods and services they consume be bundled into ever more complete solutions to their needs, requiring that traditional companies step outside their once-tidy industries to meet the complete needs of their customersa vacation is not an airline ticket, and airlines such as Virgin package the total vacation experience, not just the ride, for competitive advantage.

This means that industry boundaries are becoming blurred: a telephone is no longer just a telephone, its a computer, a camera, a Web browser and a community of friends and family circles.

Tomorrow: Five Drivers

TECH TALK Extreme Competition+T

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.