The transient advantage economy is here. The era of sustainable competitive advantages is well over. Look around your own industry. Even when you launch a high-tech product, within six to nine months you will see competitors launching almost similar products at a lower price.
My esteemed colleague and the world’s No.1 innovation and strategy thinker, Rita McGrath, had predicted this a decade or more ago. This is an era where industries are competing with each other and not just companies within an industry. Take for instance the competition to a bank: It is not just other banks but also mobile wallet companies, Apple Pay, Google Wallet, Alibaba.com and even the post office. Technology seems to be the disruptor in most cases breaking down entry barriers to competitive advantage.
Are SMEs making use of technology to compete well? Should they have more presence in the digital media? Do they need mobile apps and payment gateways? Or should they just focus on the good old methods of lead generation for driving growth? And, with a regularly diminishing rupee, should SMEs think of exports as an opportunity than a problem?
Here are some pointers for SMEs to consider while competing for growth in the near future. The degree of relevance to each business will vary depending on the growth stage and maturity of the industry.
- Data will be the new oil. Forget oil price hikes and falling rupee. You don’t have control over that. Given India’s privacy laws it is still easy to acquire and manage customer data in whatever way you want. However, it is a good idea to follow the best practices from Europe for this. Data mining and analytics will be crucial for spotting new transient opportunities. There is a huge untapped potential to capture and analyze data from prospects and deliver specialized services.
- Political divide, income divide and corruption. India has fallen further on corruption index globally. SMEs find that bribes are demanded even for registering GST. Decide on a no-bribe policy and stick to it to fight at all levels. This will ensure benefits to all in the long run. Become more tuned to a good corporate citizen and use whatever power you have to ensure goodwill all around. Do not take sides in political narratives or propaganda. Take a stand on what you believe in. That leads to the next issue: Reputation management.
- Reputation and brand management: SMEs in the B2B sector need to use social media in the months to come. Seeking customer feedback will be more important than ever. Reputation will become synonymous with other forms of marketing.
- The power of knowledge is diminishing with the explosion of information available on the Internet. The important thing is to create unique knowledge within and capture the knowledge within to create new competitive advantages. This could be in the form of designing new services, building more efficient processes and identifying new opportunities.
- Cellular phone is more than just a phone but a tablet, entertainment device, social media interface and payment gateway. Customers prefer content specific to them and as quickly as possible. SMEs must respond to this demand accordingly. Not going digital is no more an option. Start small and drive quick experiments for your business, and decide what works for you in the digital space.
- The invasion of technology in sales, automation and marketing will be a reality. As I have written before, the use of handheld devices will proliferate in sales and you need to
- Content in marketing is key. SMEs may not have realised this but with the digital media, SME marketers have to focus more on channel-specific content to deliver targeted messages. Relevant content that compels clients to engage with you should be the consideration. The decision on which channel to be used will still be important, but with the lowering costs for content distribution, the ability to find good talent for content creation will be a limiting factor.
- SEO rules are changing more frequently now. To get to the top of the search results, SMEs need to be ahead of the developments in search engine optimisation. Otherwise, the costs of placing on top will be unaffordable. Google is making tonnes of money from this and so they keep changing the SEO rules. Plan social media activities carefully so as to get the right visibility.
When things are in such a transient state, it is imperative that you try to ride the waves constantly. SMEs also need to plan for the right kind of expertise within the company.
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