Why we don’t need to know everything about toothpaste to help you stay in the toothpaste market.
There’s a feeling among company managers that external perspectives can’t add much to business strategy. It’s an opinion we hear fairly often and yet, McKinsey seems to be doing OK. Is this because buyers of management consultancy just want to buy in resource to get a job done, or because an external perspective adds value?
Let’s look at a case study.
In the UK, Europe and the USA, the car market is changing. Not so much that existing suppliers to car brands can’t survive, but enough to suggest that, in many cases, their days are numbered.
This diagram paints the picture.
The bottom triangle shows where established business is today. The top one shows how insurgent and disruptive business sees its opportunity.
With legislation telling us that the only cars available in twenty years will be full electric, where do you think your business sits in the diagram above?
Let’s look a bit closer at this market.
In 2018, the EU car market grew by 0.5% – good news. Nothing to worry about there. Plug this number into your financial plan and it’s going to be a good year. Launch a new car every five years, let the supply chain develop components to meet the need. Everybody wins.
Oh, but wait, Uber has signalled that consumers don’t need to own a car to navigate a city. In London alone, that’s over 10 million people who rarely need to buy into this sector.
How about driving autonomy? Not going to happen?
Tesla disagrees. Toyota has invested $500 million in Uber self-driving technology projects. Google has invested over $1billion already. Since 2015, Dyson has been pumping $2.5billion a year into electric vehicles with some self-driving ability, and its recently announced move to Singapore puts the company close to the fastest-growing electric vehicle (EV) market – China. Coincidence?
One of the issues that EVs must resolve is range. Range correlates to weight, so EVs are built to be light. Cars designed for short trips come in under 450KGs, compared to over a metric tonne for cars made of metal. Where the language of car makers used to be of smelting, tensile strengths, rolling, beating, pressing and casting, now we hear of moulding, laminating, bonding, extruding and injecting.
There are other factors to consider in the car market. Hydrogen could utilise the infrastructure of filling stations the world over, if safe movement of the fuel can be assured. Environmentally, hydrogen has its fans and does present a viable alternative to electricity, avoiding the need for the creation of a charging system for EVs.
Supply chains change.
If you are part of the supply chain to the automotive market, or active in the maintenance of cars as they exist today, you can be certain that your world is changing. You just may not have seen it yet.
So, does an external perspective look like it could be valuable? Whether you make toothpaste (plastic packaging), potato crisps (metallised lamination and gas flushing), processed meat (veganism), or fashion (slow fashion, circular economy), things are changing for you.
Buying in an objective view of your market opens the door to fresh ideas. There is value in re-examining data that you’ve discounted, and in bringing your consumer’s perspective into your reckoning.
This link will download our free guide, ‘Seeing it differently.’ room44 specialises in delivering value from Design Thinking – the act of building a strategy from your customer’s perspective. A strategy that meets a need today and anticipates what you must do to stay relevant as your market changes around you.
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