Every management school teaches this. Every management book preaches the same. So, is the learned businessman in-house. At the same time, it is so hard to accept, understand and act on this principal foundation of sustainability.
Whenever markets shift, end-user behavior shifts radically and hence changes the profit pool in the segment. Measuring and keeping a tab on the profit pool shift provides an urgent necessity to innovate and stay afloat.
Market innovators relentlessly focus on user experience and design their businesses continuously around the same theme. This makes them reap the benefit early in the cycle. Giant followers find their way through success & failure of other ecosystem players. Their eye will always be on the profit pool. If you analyze the profit pool of changing markets, there is a chance to predict the changes in dominating players – who will stay and who will go. This helps in devising own operational strategies.
For example, check the figure (Exhibit 2) below on changing profit pool due to Tablet Market Emergence.
Predict what will happen in the industry, post PC era? What will you do to benefit from this shift?
For B2B enterprises, designing the business to be in tune with customer’s customers will help sustain it profitably!
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