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Agile Business Model: Competitiveness in the Age of Digital

Staying competitive in today’s digital world means getting much more agile, adaptive and aligned.

Overview

Just when you thought the world could not get any more volatile or complex, Digital starts rapidly reshaping business models and driving industry convergence. As product and service lifecycles are shrinking from years to months to weeks, the new model of product and service adoption is more of a shark fin than a bell curve, characterized by sudden, even violent success, a short but brilliant period of dominance followed by dramatic decline.

Digital is also opening the floodgates on contestable markets—ones with low barriers to entry and exit—so that both upstarts and traditional players can come from nowhere and quickly gain dominance.

So how can companies create and sustain a competitive advantage? To grab opportunities in the face of today’s rapid, complex and volatile landscape, companies need to become much more agile, adaptive and aligned. Creating new models for competitiveness. Clearly, this is not your father’s business model. But it is the only way to survive in the age of digital.

Competitiveness in the Age of Digital Infographic

Companies must be agile, adaptive and aligned—the triple "A" advantage. Getting ahead and staying there requires getting all three of them right.

Agile business

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Key Findings

To compete to win, companies must achieve the triple ‘A’ advantage:

Agility means creating a flexible operating model and keeping costs down. Today’s companies must deliver better products and services faster and cheaper, which requires operational effectiveness and a culture of productivity and innovation. Cost savings can then be reinvested into growth.

Adaptability has never been more important. Competitors are now partners. Rivals are collaborators. Other industries provide critical links. Ecosystem collaboration is critical to competing in this very fluid playing field.

Aligned means that companies need to simultaneously meet the expectations of customers, stakeholders and society at large. Companies that “walk the walk” of ethical business practices—when it concerns people, profit or the planet—can use it as a differentiator.

Getting it right in one or two of these areas might deliver some benefits for your business. But to get ahead and stay there, requires getting all three of them right. And with the speed the market is moving—getting them right now.

Recommendations

To achieve agility, adaptability and alignment, companies need to alter their current models to cut fat and boost growth and innovation, they need to prepare for new sources of competition driven by digital and they must make gains in sustainability. Here’s how:

  • Cut costs, boost growth. Companies can lower fixed costs through strategic cost reduction and permanently eliminating waste to deliver new products faster, cheaper and better. They must create an ownership mindset and a culture of sustainable cost management.

  • Invest in growth. Companies should develop innovation capabilities that enable them to rapidly develop and market new products and services that meet customer demands. That also means collaborating across an extended ecosystem, or pursuing mergers and acquisitions that enable them to identify, acquire and integrate new capability faster.

  • Move beyond compliance. Companies need to pursue a “license to grow,” using ethical business practices as a differentiator. They must also go beyond “just compliance” to create a competitive advantage in the marketplace.

Videos

Why Competing to Win is Getting Harder to Do

How Leading Companies Compete to Win

How Leaders Drive Competitiveness Through Operational Agility

Competitiveness in the Digital Age: How to Get Ahead and Stay There

How Leaders Drive Competitiveness through Sustainability

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