Taking on the Competition with Technology
Businesses need to adapt continuously in the current climate, and digital adoption can help organisations achieve a competitive advantage. The pandemic has changed competitive pressure and the business landscape in the last year - and some large, well-positioned firms appear to have increased their market share. This trend was seen prior to the pandemic, and it has accelerated.
A research paper from the International Monetary Fund in March 2021 suggested that the coronavirus pandemic has significantly strengthened the power of dominant firms, which could stifle innovation and investments with an increase in the concentration of revenues among the four most prominent players in a sector. The IMF (an organisation of 190 countries working to foster global monetary cooperation) warns that the worldwide pandemic hit small and medium-sized businesses particularly hard. Troubled mid-sized and larger firms may reorganise or, perhaps more commonly, be acquired. As a result, Government’s are already undertaking reviews of competition policy frameworks - they are already underway in major economies, including the European Union.
The Institute for Public Policy Research (IPPR), a registered charity and the UK’s pre-eminent progressive think tank published a paper by the outgoing chairman of the Competition and Markets Authority (CMA) entitled “Tyrie A - How should competition policy react to Coronavirus?”. The paper examined the short and long term consequences of the coronavirus pandemic for competition. This study also found that coronavirus is likely to make the UK economy less competitive with bigger players dominating markets.
Responding to Competitive Pressure
The damage to competitive markets from coronavirus could be much more prolonged if incumbents are allowed to remove the competitive threat of smaller rivals by purchasing them. COVID-19 also produced strong, buoyant demand for many firms engaged with the digital economy as ‘in-person’ transactions moved digital. Changes in buying patterns may reallocate revenues across firms within a sector, perhaps in unexpected ways, so organisations should make sure they are set up to exploit the trend towards remote work and eCommerce by accelerating their digital business journey.
The emergence of newer technology such as blockchain, artificial intelligence and autonomous business will also disrupt how business works and societies operate. To remain competitive, organisations will have to look to remove manual and outdated processes. A canvassing of experts in technology, communications and social change by Pew Research Center and Elon University’s Imagining the Internet Center finds that many expect similar impacts to emerge from the COVID-19 outbreak. The study gathered opinions from 915 innovators, developers, business and policy leaders, researchers and activists. Their broad and almost universal view is that people’s relationship with technology will deepen as more significant segments of the population come to rely more on digital connections for work, education, healthcare, daily commercial transactions and essential social interactions - those involved in the study describe this as a “tele-everything” world.
Digital Tools for Competitive Advantage
Digital tools can reduce costs, improve efficiency and improve customer experience. When organisations adopt up-to-date technology and use digital tools, it can help build resilience and stability in a very challenging market and drive competitive advantage to take on bigger, more dominant players. Digital transformation research from McKinsey suggests that the most significant impact of technology can be achieved with a focus on changing internal operations and automating back-office functions to make workflows better, faster and cheaper. Cloud-based technology services were one of the most popular technologies implemented by those running a successful transformation project. The survey found that adopting tools to make information more accessible doubles the likelihood of successful transformation. The study also found that implementing digital self-serve technologies for employees and business partners make the success of a digital transformation project twice as likely.
In this year’s Forrester State of Systems of Agreement Survey commissioned by DocuSign, 1,087 decision-makers from around the world, including Germany, France, Netherlands and the UK, were interviewed; the digital disruptors were found to experience substantial business benefits in comparison to their low maturity counterparts.
In particular, digital disruptors experience higher instances of silo breakdown (50%), faster deal cycles (56%) and easier information transfer (37%) — illustrating how a digital agreement process improves functionality and innovation across the board. Those categorised digital disruptors were found to have adopted electronic signatures, with most or all the organisation’s agreements being signed digitally. The organisation could verify a signers’ identity according to the legal requirements of different regions, and agreements are automatically uploaded into systems of record and automatically trigger actions such as creating work orders, invoices, inventory purchases, and payments with predefined workflows to automate such processes. Discover how the DocuSign Agreement Cloud can assist with digital transformation for competitive advantage.