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Why consumers need business disruptors

Why consumers need business disruptors

12 Sep 2015 by: Allyson Stewart-Allen, Chief Executive, International Marketing Partners Ltd.

The rate at which new business models - think Uber, Nespresso, FlyVictor and Unbound - are disrupting and destabilising established brands in their orbit is accelerating like never before.  With Uber so far successfully fending off clampdowns in court demonstrates this trend shows no signs of slowing down.

Disruption is now far more visible, prevalent and easier than ever.

While disruption (or, competition) is not a new concept in the business world, it is now far more visible, prevalent and easier than ever.  These new disruptors have built their businesses with consumer needs set deep in their foundations, utilising new technology to offer the goods and services that consumers want, when and how they want them delivered. They have also chosen to be more specialist rather than “all things to all people,” selecting market spaces in which they can compete profitably with business models that allow easy extraction of commercial value.

Consumers got more sophisticated, hence innovation was the skillset to get you there

This is not dissimilar from what companies did in first world economies very successfully for several decades: growing quickly through the use of their size to extract economies of scope and scale.  Until, that is, consumers got more sophisticated, industries more competitive and differentiation a life-or-death corporate pursuit.  Hence, innovation – of products, services, business model – was the skillset to get you there, and certainly today still is.

Most corporates have sunk costs, complacent cultures and silo structures impeding agility

Yet innovation has not come from the established brands but “outsiders,” unsurprisingly given most corporates have sunk costs, complacent cultures and silo structures impeding agility.  Which is why pre-millennium innovators were able to disrupt them.  One of the first was Freddie Laker with his trans-Atlantic airline making long-haul travel affordable, paving the way for the likes of Easyjet and Ryanair to build on this consumer appetite for reinventing affordable travel in the age of algorithms.  Apple similarly disrupted the PC market and Dyson, of course, launched a bagless vaccum cleaner no homeowner thought they’d ever need.

This millennium’s innovators, while occupying just as broad a variety of sectors, are also operating in the Big Data era where it’s very easy to crunch numbers quickly to extract insights on how customers use – or don’t use – products and services.  Procuring and sifting that data can now be done by a grad student in under an hour.  Matching a product/service profitably to observed and expected trends is enabled by low-cost computing and an appetite to create a need that large corporates are neglecting.

Now the old disruptive businesses are being more quickly challenged by next gen disruptors

What the early disrupters and those in this millennium share are:

  • Deciding to contest a market space where the big boys are not or, if they are, have not capably captured share
  • Working with a clear business model
  • Putting unmet consumer needs centre stage with observations, insights and technology aligned to do things better, faster, cheaper

What we are seeing now is the old disruptive businesses being more quickly challenged by next gen disruptors, just one example being Metro Bank and its latest concept Atom Bank. Yet there is still no sign of the corporates disrupting from within… once they do, they will make it much harder for the market nibblers to eat their lunch.

Allyson Stewart-AllenAllyson Stewart-Allen is Chief Executive of International Marketing Partners Ltd. and a member of the Board of IORMA.  She is an internationally recognised brand and marketing expert, whose expertise helps companies adopt a global mindset to ensure they better understand local business cultures and consumer behaviour as they grow their businesses internationally.

Her clients, which span 24 countries, include Aegis, Burberry, Cadbury, Coach, HSBC, NBC Universal and SAB Miller. Her book Working with Americans is a best-selling business title. She is a frequent guest commentator for leading media outlets such as CNN, CNBC, BBC, Bloomberg, Sky News, The Financial Times, The Wall Street Journal and Newsweek.

Allyson is included in the prestigious 100 Women to Watch list, compiled by Cranfield, one of Europe’s top management schools and is an award-winning creator of Executive leadership programmes.

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