The Strategic Conundrum

By Distinguished Professor Robert M. Donnelly




Every company reaches a point where they have an existential crisis. This happens when the management team attempts to change with the changing dynamics of their marketplace while still trying to hold onto the past.


The typical result is that they do neither well, and as a result, usually fail.


This is especially true today as technology is transforming business models in every industry. Mobile marketing is permeating more and more industries, and in the process is creating havoc with traditional business models. For example, the role of the salesman is being displaced with electronic product presentations and “how to” step-by-step videos. In combination with online comparison shopping there is no longer a need to talk to a salesman. Orders can be placed with a “click”.


Even if you still want to go to a physical store electronic demonstrations and product presentations can be accomplished with a hand held pad device by a wandering product sales expert that can be supplemented with live product displays.


Purchasing the product is accomplished on the same device that also produces a receipt either on the device of by a convenient printer that is close by.


Large industrial firms have created sophisticated electronic interfaces with all of their suppliers so that in combination with their manufacturing control systems the entire purchasing function is automated. This has resulted in tremendous cost savings as these systems now generate orders electronically to insure “just-in-time” deliveries eliminating keeping large inventories that tie up cash.


As Big Data continues to feed predictive analytics software models that generate more accurate trends on consumer behavior, every company has to adapt to the reality of a rapidly changing marketplace. Unfortunately, for many, rapid change is hard to accept, but a natural part of the accelerated product life cycles that we have today. Technology is moving so fast that some products are obsolete within 3 to 6 months after introduction.


New smart phone models are being introduced about every six to nine months. Hardly enough time for the last models to be fully adopted by consumers. Additionally, several enhancements or options are available for each new generation.


Complicating this further for CEOs and their teams are the perpetual advances in artificial intelligence and robotics that are contributing to the digitalization of business.


The World Economic Forum has predicted that more than half of all workplace tasks will be carried out by machines/robots by 2025. They estimate that by then the majority of workplace tasks in existence today will be performed by machines or algorithms. This monumental change has been described by the Forum as the Fourth Industrialization Revolution.


WEF also predicts that there will be a significant shift in the quality, location, format, and permanency of new jobs. Companies will use more contractors for task specialized work, engage workers in more flexible arrangements, utilize remote staffing, and change locations to get access to those with the right skills.


Whether it’s your car, smart phone, or TV, the next generation is just around the corner. Where is your company in this complicated technology driven marketplace?



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