“Make wisdom your own – insight is the crown of the wise.” 
In 1955 RCA developed the all glass picture tube. This radical new design drove out companies that could not master the new technology. The 74 picture tube manufacturers in 1955 were reduced to 52 four years later and by the late 1990’s only seven were remaining globally. This scenario is starting to repeat itself as we move to flat screens and digital technology.
These cycles from stability to turbulence to stability are enough to drive any manager crazy. For those who actively detect the early warning signs and develop strategies to capitalize on these fluctuations the rewards can be substantial. Conversely when a new technology revolutionizes an industry, incumbent companies who are heavily invested in the old technology are often slow to respond; perhaps numbed by the status quo.
Typically, industries and technologies go through cycles or discontinuity and these industry interruptions often provide opportunities. It is at these points that long standing contracts and processes are most likely reviewed. Additionally, this is when purchase decisions are often taken by senior management as new technologies can affect processes and systems throughout a company. Price is rarely the prime consideration as new technologies are often reviewed for value and fit with the company’s manufacturing or development process.
As time passes, industry technology re-stabilizes, competitor market shares are re-established, new competitors enter and weaker competitors are eliminated. It’s during these mature points that market share is very difficult to move, purchase decisions are pushed down to lower level management and price once again becomes a more important purchase consideration.
A word to the wise:
- Look for points of disruption (new technologies or processes that can revolutionize an industry).
- Meet with your strategic planning team and actively look for ways of exploiting new technologies.
- List your customers and your vulnerabilities and develop strategies to switch them into the new technology.
- List vulnerable competitors and develop entry strategies into this client base.
Patterns of the past can be analyzed to understand how they created our present markets. Current market patterns can be analyzed to better predict the markets of the future. For the business leaders who understand the precepts of marketing strategy, actions and events become increasingly predictable. Develop your market wisdom.
1. Proverbs 14-24