3 Competitive Strategies for Growth in 2020 and Beyond
- October 5, 2019
- Posted by: Nkem Mpamah
- Category: Business Strategy
We are at that time of the year when the odds stack against business leaders for two reasons. First, because the year is coming to an end and your performance will be evaluated against how far you have come in relation to your company’s projections in the past 12-months. Second, most companies decide on the competitive strategies for growth in another 12 VUCA (Volatile, Uncertain, Chaotic, and Ambiguous) months ahead of them. And, if the United Nations’ recent warning about a global recession in 2020 is anything to go by, then, the second reason calls for greater caution.
As we envisage more radical transformations across several business sectors in 2020 and beyond, there are strong indications that the traditional strategy playbooks will no longer provide sufficient direction for creating and sustaining growth. As a result, a new paradigm to determine the competitive strategies for growth needs to be in place. In the past, large corporations compete on similar products and services in well-defined industries. They gained competitive advantages through efficient processing, quality, and speed of delivery. But increasing complexities in technology, declining product-life cycles, and persistent political uncertainties will draw new battle lines in 2020. Continued disruption in many sectors suggests the collapse of industry lines, which will, in turn, lead to unpredictable complex competition.
An outlook of competitive strategies for growth
In more than 5 decades, companies have relied on the traditional five-year planning, business analysis, and execution of plans to predict competition. But, in 2020 and beyond, three competitive strategies for growth will change how businesses will compete.
- Dynamic learning
- Innovation and new ideas, and
- Multi-company ecosystems
Business leaders who reposition their organizations in line with the above strategic imperatives will no doubt dominate their markets.
Dynamic learning as a competitive strategy
Before now, successful organizations thrive on continuous learning in such areas as leadership effectiveness, product development, efficient process, and marketing. While these skills endue, Dynamic Learning (DL) capabilities are necessary for discovering and adopting new knowledge. The discovery and adaptation approach will disrupt the status quo, create useful data, and enhance organizational value systems. With more data leading to the personalization of service, customer and stakeholder satisfaction will increase across the board also. In an organizational context, dynamic learning skills cover coaching, design thinking, strategic thinking, innovation, creativity, and Artificial Intelligence. This set of competitive strategies for growth will, therefore, become an advantage for business leaders and companies implementing them.
Because the 2020 business environments will be characterized by increased uncertainty, companies adopting dynamic learning as a competitive strategy will develop capabilities to ask the right questions, gain better insights, and disrupt their industries as a result. It will also increase knowledge, provide data for enhanced decision-making, and increase customer value.
Innovation as a competitive strategy
As global economies change, it becomes increasingly dangerous to rely on existing business models for growth in 2020. Sadly, though, many CEOs do not have a good understanding of the business model beyond being “How we make money.” While “how we make money” is just one small component, the entire model clarifies the concepts on which the business stand.
Therefore, those who will focus on injecting fresh ideas by constantly updating their business models and staying relevant in declining global markets will win. For many large companies, doing so will be as challenging as teaching an elephant to dance. Why not? Because it is easier to pay lip service to innovation and do nothing. Many business leaders will not take steps to harness new ideas and reinvent their business. But companies that see innovation as a competitive strategy for growth in the 2020s will do things differently. Also, they will discover and explore new possibilities that will deliver growth patterns to them ultimately. However, this can only happen through continuous innovation.
Competing on multi-company ecosystem
One of the greatest advantages of advancement in technology is the continuous condensing of the world into a global village. While the trend continues, we expect that new disruptive business models will infiltrate business landscapes in the 2020s also. As a result, the cost of doing business, including communication costs at a global level will decline. New opportunities will open for companies to create markets they can influence. However, harnessing ecosystems as competitive strategies for growth can succeed only if businesses pursue collaboration or networking with other stakeholders.
Ecosystems cut through industry borderlines to create and influence acceptance of a new order. Like a new paradigm, it shifts operations from discrete to democratized business systems. Amazon, Alibaba, Uber, Opay, MaxOkada, Bolt and many others leverage technology, mobile applications, and cloud systems to create hubs that connect people to solve their problems. The ecosystem competitive strategies depend on a “Gig Economy” to drive their model. Therefore, harnessing different stakeholders’ resources and capabilities within the ecosystem eliminates internal competition, and accelerates growth faster than discrete competitors. For example, Amazon and Alibaba provide trading platforms but collaborate with manufacturers, marketers, and logistic companies to create customer satisfaction.
Companies leveraging multi-company ecosystems as competitive strategies for growth will not only win, but they will generate huge returns in the long run also.