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Archive for September, 2018

Michael Porter has obviously white hairs. But not because of his age, even if it’s been years since his “Porter’s forces theory”, but probably because of #Uber. His former theories with his famous “forces” theory matrix haunted lots of universities, students, consultants and companies, made a classic model to explain, draw and shape the main forces and links through modern strategy. I think every people, far from close, one day has been in trouble with this matrix, trying to adapt it to his personal business case. I mean in trouble, while searching clues and tips for his own industry, sector or product. This was a wise approach to put the things right, since the beginning. I never understood that since then, there was a scarcity of ambitious models that could tumble down the historic fundations built by M. Porter. Even since the run of digital revolution, in the mass effects, it seems the old rules could play again their guiding role in strategic planning. Even on Clayton Christensen’s disruptive innovation concept, Porter’s forces could function to describe a whole environment, a whole playground where different actors could grow or die, but still go on their economic destiny. Then there was Uber…

PorterUber

“Über alles”

We can at this point consider Uber as a perfect example of “disruptive” phenomena (I prefer not to use the term of innovation, as for me, the real innovation is in the “UX”). They re-invented an existing service, better (some say “far more”), at lower prices (and then at lower cost, forcing the whole chain through lower margins). We’re fed up with the “middle”: middle-class, middle management, middle-price, middle quality…middle of the value chain and intermediaries. High class or low cost seem to resume the economics. “Stuck in the middle” is so far the worst strategic planning situation for many reasons. The increasing and forced run for innovation creates and destroys, each day and the speed of cycles gears up. Time is up and now to “re-arrange” and update the old models to include disruptive brutal behaviours. While there’s still much competition, all we can say is that the customer centric era has begun and let himself as a king of the game. I tried here to start a reflexion of where and why, Porter’s forces may change on the impact of collaborative society.


The uber-matrix (from Porter’s forces)

Porter_UberMatrix

How’s competition so far? Fair, intense, rough or beginners’ field? As it’s the starting point of any strategic analysis, we may spend a while on this.


“The Competition, the customer and the supplier”

There’s no big innovation, I mean on the technology plan, in transforming the supply of transportation, like Uber did. They simply used the new principles of digital: always-on, connected things and people, lowering waste and waiting lines and optimizing the transportation offer. Less lose time, empty cars and…angry consumers. The big picture is in optimization, optimizing time and resources. And that means, a lot of money indeed! The next steps will simply optimize again: using transportation time and devices to transport anything: meats, packages, mail, services and so on. Optimizing again. The application will cover many versions, until you’re so much profiled, that they will be able to monetize your datas.
On the market plan, a very balanced market, with no dominant actor: drivers need consumers who need drivers and everybody needs Uber to get in contact and stay in touch. The very big star is the “platform”. We just entered in a world of platforms, which capture essential of the value chain and kill many intermediate actors. Here we go, like the web goes…Progress destroys at a speed that even Schumpeter could not imagine. We call it “uberization” of economy, a kind of “new born” of relations, interactions and business models. Anyone can be catched with no tomorrow. Anyone can  get stuck in a dead end. Something thrilling or fearing, depends on your risk attention.


“Where playground gets a new shape”

Uber now seeds a new way of doing business, and draws many actors with him. Under the influence of digitalization, customer experience grows up frankly to a new standard that calls for excellence. Nothing will ever be like before. The extreme focus on operation, delivery and accuracy calls for a new standard for customers. Where there seems to be no entry barriers, the ability to build a copycat is a longtime run. Not in technical aspects but in the delivering experience. Even the substitutes field must be a tough job to get the same level of result. The “platformization” of economy used to be the way of doing business, throwing away all useless midlevel actors. And even if it’s the sense of history with progress bulk modifications, legal watchover is live like never before: strikes, hard negociations, realtime bad influence on PR…While we lived many revolutions, the one that goes is far violent, quick and uncompromising. Any sector is concerned, soon or later and you’d better think of it and organize the answer, or other new comers or opportunist actors may do it without you.

Schrödinger’s cat dilemma: yes it’s technology, no it’s not”

The easy-to-use plenty offer of digital tools gets bigger every day so there’s some foolish feed of the whole ecosystem with techs. But technology wise speaking, nothing really complicated: localization, customization, smart UX, realtime traffic management, rating panel…A complete thinking of just “what it needs” to create a blue ocean, out of the box and disrupt the well ordered old world…Until then, it’s been a tipping point: using these new features opened an ocean for many industries to get closer and more efficient with their customers and value proposition.


“Innovation for change”

It changed the business model for a flat well known price, fixed cost with no surprise, flat prices for usual travels or recurrent ones. It changed for a more trusty model, trusty relation between industry and customers. It opened to many other solutions, in parallel markets, services or goods. It created many jobs, pushing the need beyond the natural demand. It played in a “winner takes it all” market, where speed is the key, to eliminate competition. The only limit (and mistake) for uber was no exit barriers, so competition could flurish, one time they understand the main principles and spread the word. The diverse moves to complete their main job, was to create and use transportation capabilities to transport anything else: “eats”, medecine, etc.

It changed the way it usually changes. Brutal and unexpected, many didn’t see the wave, nor the huge potential for many business. Who can say it as well from one’s own business? Who can say “well, I’m not concerned, it’s for others”? One day, soon or later, you’ll meet the beast, the wall of doubt, of uncertainty which may paralyze your brain and your usual skills, trained for mainstream. “Forewarned is forearmed”. Unfortunately, it may be not enough…

“Time for change, time for reboot”

We never knew anything so quick that this new “kind of thinking”, of doing business, and oftenly refer to “digital wave”. Not as a mean, but a way of setting new behaviors, in front of massive and settled competition. No recipe, no warning, like bootlegs invading the old world. Just a necessary reboot, from A to Z, bottom and up. A concrete and real disruption, where incremental innovation dressing doesn’t work anymore.

You can’t say not being warned until now…

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