Remaining relevant is one of the most challenging tasks faced by an organisation. At best companies see themselves challenged by competitors offering improved or cheaper versions of their product, at worst they see their market disrupted and face the prospect of going out of business.
Companies faced with possible disruption and irrelevance tend to either continue to do the same thing, or accept the threat, making the difficult but necessary changes for survival.
To illustrate this let’s look at the film and camera industry. The threat of digital had been clear to many as early as the late 70's, yet Kodak and Fuji's response to this threat could not have been more different.
In 1976 Kodak accounted for 90% of film and 85% of camera sales in America. In the 90's it dominated the market it competed in, and was one of the world's top five most valuable brands. Between 2000 and 2010, however, global demand for film dropped 90%. Yet facing this disruption, Kodak did very little to change, or adapt its core business. In 2012, with around $5.1bn of assets and $6.75bn of liabilities, Kodak had no choice but to file for bankruptcy protection.
During this time Fuji was not mourning the demise of film, but instead was busy expanding its empire. Having accepted the fate of the film industry, Fuji made the strategic decision to invest in new directions. How it did this is a lesson to us all in remaining relevant by not taking a myopic view of business opportunities.
Instead of looking at the business they were in to identify new opportunities, Fuji analysed its core capabilities and expertise to identify new markets. They may no longer have had a vibrant film business to rely on, but the organisation did have the following strengths:
- financial power
- brand trust
- marketing ability
- existing ties to customers.
One of the outcomes of identifying possible markets by analysing core capabilities was Astalift, an anti-ageing skin care brand launched by Fuji in 2007. The decision to enter the beauty market came from the realisation that film technology could successfully be adapted to skin care. Today Astalift is the best selling skin care brand in Japan, and has a healthy international market.
Anyone in business knows how difficult it is to remain relevant, especially in this changing business world. But as Martin Luther King Jr. famously said, "The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy."
We are now living in times of challenge and controversy. How an organisation reacts to a possible disruption, and whether it remains relevant, depends on its correct interpretation of the forces at play, its willingness to let go of what was once a vibrant business, and its ability to adapt its capabilities into new markets.
Where will your organisation stand during these times of challenge and controversy?