In today’s business landscape, many established organisations are facing competition from a new breed of business known as digital disruptors. These companies use technologies to optimise costs, drive innovation and create new business models, thus gaining a competitive advantage and capturing market share from established players.
Typically nimble and data-driven, digital disruptors can respond quickly to changes in the market. They are often able to offer products or services with greater convenience, at lower cost, or of better quality than traditional incumbents. Digital disruptors have the capability to fundamentally change the way entire industries operate, as evidenced by the emergence of online retailers such as Amazon, companies like PayPal, which have disrupted the traditional banking system, and of course Uber, which has turned the taxi industry on its head. Local examples of digital disruptors include Pineapple and Naked, two insurance providers that have been making waves in South Africa’s short-term insurance industry since they arrived on the scene.
For traditional companies in every major industry, there is no question that the rise of digital disruptors poses a significant threat. That said, established companies will always enjoy some important advantages. Things like expertise, industry knowledge, customer relationships and legacy infrastructure cannot be turned on at the flick of a switch. To go toe to toe with their new competitors, established companies must themselves adopt technologies that enable them to leverage these strengths to gain a competitive advantage of their own.
Key amongst the advantages established organisations can exploit is the decades of customer and industry knowledge they have behind them. This gives them the inside track when it comes to market trends, business practices and customer needs, and cannot be replicated by digital disruptors. By drawing on their experience, established companies can identify new opportunities, or develop products, services and solutions to meet their customers’ needs.
During the Covid-19 pandemic many businesses ‘pivoted’ – changing their strategy and focus virtually overnight to remain profitable. Retail businesses that did not have an online presence expanded their operations to e-commerce, and in many cases, online sales now constitute a larger part of their business than brick-and-mortar stores. In South Africa, Checkers launched its grocery delivery service, Sixty60, in 2019. The app swiftly gained traction during the pandemic and remains very popular, having been downloaded almost 2 million times to date. Like many of the innovations that emerged as a result of Covid-19, the notion of pivoting is here to stay. The business landscape has become more fluid, and this presents established companies with the opportunity to expand their operations, bringing their expertise, industry knowledge and customer relationships to new markets. Agility is key. Companies must be able to adapt quickly to changing market conditions and consumer trends, to take some risks and experiment with new ideas.
Of course, embracing technology is critical. Traditional companies often have a way of doing things that has served them well over time, but which is no longer optimal. It is not enough to have decades of industry knowledge if that knowledge cannot be applied effectively. Rather than being of the mindset that cutting edge technology is the preserve of digital disruptors, traditional companies should invest in digital tools that help them to streamline operations and enhance their customers’ experience, and that offer the flexibility to scale with their business. Tech can be acquired by any company – but not all companies can marry new tech tools with the advantages an established company has in its favour.
As important as the tech itself is the relationship between the company acquiring the technology, and the vendor it chooses to implement it. A company’s technology provider should be a trusted partner who understands its customer’s unique needs and is invested in helping to drive its business forward. When looking for a suitable partner, companies should take a long-term view, looking for vendors who score highly not only in the tech stakes, but also for the standard of service they provide. With the right technology partner in place, established companies have every chance of gaining an even better competitive advantage in their industry.
Tech can be acquired by any company – but not all companies can marry new tech tools with the advantages an established company has in its favour.
Intenda is a digital disruptor in the truest sense of the word. Technology is our business, and in Fraxses, we offer a data platform that is revolutionising the way organisations manage their data. At the same time, as a multinational that has been in business for over 22 years, we know what it is to be an established company. Over time, we have established a deep understanding of the challenges companies must overcome if they wish to remain relevant – and the critical role technology plays in this. We understand that for many traditional companies, adopting new technologies can be a daunting and complex proposition. Having partnered with established organisations across multiple industries to accelerate their digital transformation initiatives, Intenda is well versed in facilitating this process. We are specialists in providing traditional businesses with the technology they need to not only compete with digital disruptors, but to beat them at their own game.
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