If you are a small business owner, I bet lately you have been seeing new competitors entering your industry and you have been feeling as much pressure from your customers to reduce your prices as ever before.
We are seeing it in our own accounting industry. In fact we are seeing it to varying degrees across our Client base which covers a wide range of businesses and industries.
There of course will be many factors that are contributing to these pressures, and these will vary both in scope and significance across industries and your own business.
However, there are two key elements that we believe will be common to most …
The first is the impact of Digital Disruption!
By that I mean the impact of technology, most specifically the Internet, on the way products and services are delivered and the way modern businesses are operated.
My former employers, Deloitte have undertaken research over the past couple of years under the title “Building the Lucky Country” (the strikeout is deliberate). One element of the series has considered the impact of Digital Disruption on the Australian business landscape as well as on specific industries. They have designed a Digital Disruption Map that attempts to illustrate where the major industries in Australia fit in terms of the risk they face from Digital Disruption and the time frame in which they are likely to see those disruptions take effect. You can view the Digital Disruption Map on the Deloitte website here.
They have predicted over 30% of the Australian Economy is facing major disruption right now! While arguably there is good news for the mining and manufacturing industries which are predicted to be impacted in only a small way and not for some time (though I wonder if this is actually true for manufacturing, think 3D printers) most other industries are on notice!
And that is the important thing to take away from Deloitte’s research. Changing is coming (frankly for many it is already here) and you can’t do anything to stop it, you can only embrace it and adapt.
There are some very visible and easy to identify businesses and industries that are already feeling the squeeze –
- Film and Film Cameras were effectively killed by Digital Cameras and Flash Cards which are now facing huge competition from Mobile Phones and Web Based Photo Sharing
- Video rental stores where first put under pressure from Pay TV, they are now both under pressure by (if not dying as a result of) Youtube and other Web Based Entertainment Providers
- The Yellow Pages (as we know it) is being killed by Search Engines
- Bricks & Mortar Travel Agents have almost been killed off by Web Based Booking Services
- Universities, Tafes and Other Physical Training Organisations are under pressure from MOOCS (“Massive Online Open Courses”)
But there are many more who are in the firing line including most relevantly –
- Any industry that is an intermediary
- Data processors who’s job can be automated
- Information providers
- Technological laggards and those refusing to acknowledge technological advancements
You can see Deloitte’s video about the impact of the Digital Disruption here.
The second, which in part is a direct result of the first, is the (now) reality of the true Global Economy!
The are now very few businesses and industries that do not have competitors for their customers that are based in other Countries and this global competition is only going to continue to increase.
Competitors across the globe can learn the skills required from anywhere, they can market to your customers from anywhere, they can communicate with them from anywhere and they can deliver the finished product (whether it is a physical item or not) to them from anywhere within days if not hours.
And most importantly, at present, your competitors that are based elsewhere in the world are likely hungrier than you are (both literally and figuratively) for the next dollar spent by your customers. This makes them very price competitive!
But it is not all bad news, the Digital Disruption and the Global Economy present opportunities for you just as much as your competitors.
So the question is, what are you going to do about it?
We are pro-actively working on our business as we speak to ensure we are protected from change and to ensure we can take advantage of opportunities as they arise. And we can help you do the same, so contact us now to find out how!