Volatility is here to kill your business  

Today, every business is having to deal with increasing levels of volatility. One hundred years ago, one only needed to lease a shop front, collect fresh produce from local farmers and sell for a profit to have a successful business. There was little change a foot and an owner did not need a business degree or much of a strategy.

Over time, food resellers became savvier. In the late 1940s, Richard and Maurice McDonald created the ‘Speedee Service System’ of burger production, that delivered ‘just in time’ meals and set new standards for fast food. ‘Speedee’ was a good strategy. However, for Richard and Maurice, the decision to take on franchise businessman, Ray Kroc, as a business partner, was a bad strategy. Ray’s aggressive nature allowed him to take over the business and drive the McDonald brothers out of the industry.

Today, Uber Eats will drive your dinner to you. More people are opting for even better food choices that are faster and cheaper. Uber has a good strategy. Uber Eats is rapidly removing the inconvenience of having to drive, park and wait for a table at a popular city restaurant.

Volatility is a term used to describe a process of rapid change, where whatever we once had or relied upon simply evaporates before our eyes. Richard and Maurice McDonald provide a good example. The Global Financial Crisis provides another. A century ago, the pattern of food shopping seemed reliable. By 2030, our refrigerators will order our food and our robotic kitchens will prepare us dinner from any recipe that can be found on the internet. In time, both Uber Eats and McDonalds, as we know them, will dissipate or disappear.

ACTIVITY

On a blank page record four or more things about the world that need to remain reasonably stable in order for your business to thrive. Which of these things, if they went away would be enough to cause your business to evaporate, right before your eyes. e.g. If you are a petroleum company, learner driver school or a parking station and people stop owning cars and instead, choose just-in-time, autonomous self-driving vehicles, what then?

2018-11-19T12:34:34+00:00By |Strategy|
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