Substitutes force us to Pivot

Discover the substitutes in your industry 

 

Are substitutes killing your business?

Pivoting in a business can be like charting a new sea voyage. There are many ways to go and many ways to get there. If there are no winds, to avoid failure, we may need to substitute our old sailing boat for a new jet boat. In business, our ability to pivot and change direction is vital. To survive and thrive, we may have to substitute our usual path for a new one. A new path can help us to save time, enjoy a smoother ride, discover new markets and chart Blue Oceans

Substitutes are the future 

As a Strategic Futurist, I speak to conferences on the future of strategy and the future of substitution. With internet shopping reaching maturity, the sheer amount of customer behaviour data available is staggering. This increasing consumer knowledge is driving new levels of innovation. Innovation helps create valuable substitutes that meet evolving customer needs. Indeed, the number of substitutes for your product or service will probably increase again this year.

How can we remain profitable? 

Michael Porter has studied the profitability of thousands of businesses. He realised that over time, industry attractiveness keeps changing. Except for a few very stable industries, like soft drinks and airlines.  Porter shares that the attractiveness of any industry can be found by examining six forces. The sum of customer power, supplier power, the threat of new entrants, threat of substitutes, degree of rivalry and complementary player effects reveal the attractiveness and likely profitability of an industry.

Do we need to innovate?

Before deciding to innovate, it will be worthwhile making a list of products and services that are substitutes for what you produce. For example, in the car industry, the list of possible substitutes includes public transport, bicycles, skateboards, electric scooters and ride-share. Uber has become a substitute for taxis, owning a second car and limousine services. Uber Eats has become a substitute for cooking a stay at home meal, as well as a take out or drive thru meal.

Business conference example

I recently spoke to 75 garage door dealers at their National Conference, on the future of strategy for their industry. By assessing the attractiveness of the garage door industry, we predicted that customer power, the threat of new entrants and the degree of rivalry would continue to increase in the future. However, the threat from substitutes was less likely to change, which keeps the industry moderately attractive for dealers. The conference assessment highlighted the need to innovate around the customer value proposition. It also reinforced the need to find intelligent ways to handle the increasing numbers of garage door manufacturers and the resultant rivalry.

Your Industry

For your Industry, decide if the Threat of Substitutes is low, moderate, or high. If the attractiveness of your Industry is declining and the emergence of substitutes is increasing, it may be time to pivot. You may need to adopt a new strategic approach. In other words, Your Strategy Needs a Strategy The long term vision and meaning for your business need not change, just the way you deliver on it. To reinforce the point, understanding the various substitutes for a product or service is something every business should do regularly.

Time to pivot?

Knowing when and how to innovate and pivot in response to industry changes is not easy. Pivoting in time is something 67% of businesses fail to do inside three years, and 96% of firms fail to do inside ten years. Substitutes for a product is evidence that others are thinking differently about the problem that product or service was designed to solve. Being able to think differently allows your business to approach the future strategically. If you are unable to think differently, the future will always catch you off guard!

About BLOG Author | John Hale – Strategic Futurist Speaker

John Hale is the founder of Hale Consulting Group and author of The Strategy Book. John has worked as an early stage investor and advisor for over twenty-years. He has worked with leaders from Fortune 500 and mid-sized companies to start-ups and public sector organisations. John has been a Visiting and Adjunct Professor teaching strategy, entrepreneurship, project management and ethics at various institutions including Singapore Management University, Bond University and Melbourne Business School.

John’s popular conference talks include:

Future-Proof – Create a strategic mindset
Future Customer – Shift loyalty to your brand
Future Culture – Nurture workforce talent
Digital Futures – Grow digital wings

If you feel it may be time to pivot or change your strategic approach, contact me at john@halecg.com, to schedule a free thirty-minute phone call, to help map out your next steps.

2030 Strategic Goals Template

Set better long term goals

 

When it comes to goals, it is worth remembering, ‘Whether you think you can, or you think you can’t, you’re right!’ (Henry Ford) and that, ‘Imagination is more important than knowledge. (Albert Einstein) 

Why do so many struggle?

Many people believe life happens to them. Life becomes like the words printed in a storybook that they didn’t write. Others, who react to life, struggle – which can leave them feeling blue. A growing number of enlightened and talented people, with imagination and resolve, experience life happening through them. They understand that imagination precedes physical manifestation and that energy follows intention. They create their own blueprint.

Talented and committed businesses set challenging goals. They imagine innovative ways to drive value, select the right strategies and make their own blueprints. If you are not sure about how to choose between strategic approaches, consider purchasing ‘The Strategy Book’.

What are your long term commitments?

Experience reminds us that when we have an unwavering resolve towards something, we know in our heart that we already have it!  Things fall into place. The universe becomes benevolent. Consider your level of resolve and commitment to a 2030 goal. Compare this to any goals for 2025, 2023, 2021 and 2020. It is rare to find a business that is as committed to a ten-year goal as they are to a one-year goal.

Those unique businesses with living breathing ten-year goals are always flexible about the strategies they will use to get there and how much sooner they could get there, but their commitment, like a bank cheque, remains ‘not negotiable’.

How goals work

Goals are about the means, not the ends. Steve Jobs’s goal for the iPhone was never really about making a phone. It was about assembling the talented culture needed to create such devices and capturing new levels of customer loyalty via its App Store alliances.

What goals can you imagine?

Most CEOs in Australia have talent acquisition and talent retention as essential goals. Yet, developing talented cultures from within is a far better goal. As Australian CEO tenures become shorter and shorter and Australian Boards become more and more risk-averse, strategy is used less and less, with innovation and imagination dissipating and disappearing.

To create future options, successful businesses need to imagine! Download your free template here: FUTUREPROOF2030.

About BLOG Author – John Hale Strategic Futurist Speaker

John Hale is the founder of Hale Consulting Group and author of The Strategy Book. John has worked as an early stage investor and advisor for over twenty-years. He has worked with leaders from Fortune 500 and mid-sized companies to start-ups and public sector organisations. John has been a Visiting and Adjunct Professor teaching strategy, entrepreneurship, project management and ethics at various institutions including Singapore Management University, Bond University and Melbourne Business School.

John’s popular conference talks include:

Future-Proof – Create a strategic mindset
Future Customer – Shift loyalty to your brand
Future Culture – Nurture workforce talent
Digital Futures – Grow digital wings

If you feel it may be time to pivot or change your strategic approach, contact me at john@halecg.com, to schedule a free thirty-minute phone call, to help map out your next steps.

Professional Care

When I speak, most of the work happens months prior. Tailoring my keynote for a conference takes a great deal of time and care. When this is reflected back, it reinforces my focus on taking care before, during and after an event. Which is all part of being a professional speaker. This morning I received a testimonial from a conference I spoke at last month.

“Our entire team and network thoroughly enjoyed John’s Keynote on ‘Creating a Strategic Mindset’ at our recent National Conference. John connected extremely well with the audience and made the often-challenging topic of strategy easy to understand and apply, at both a business and personal level. John’s level of care and professionalism in preparing for our event was also excellent.” Peter Hedge – National Accredited Dealer Manager, B&D Doors.

If you would like to learn more about what it takes to be a professional speaker, please let me know. I would love to connect you with one of my fellow speaking colleagues at Professional Speakers Australia, which is the industry peak body association that supports experts who speak in Australia.  

2019-12-11T17:32:13+11:00Categories: Events|Tags: |