BUSINESS SPECIAL................. 7 Surprising Disruptions

7 Surprising Disruptions

Almost every company will face disruption in 2015: The dynamics of reaching customers are changing, technology shifts are speeding up demand for new products and innovation, and efforts to maintain margins have become a high-wire act. But when you look hard enough, these hurdles represent opportunities. Pulling from Strategy&’s recent analysis of industry trends, we’ve unearthed the hidden strategic gem for the most threatened sectors.

Radical shifts are reshaping the auto industry: Brand loyalty is waning; mileage per gallon (or CAFE, corporate average fuel economy) standards and safety rules require new materials, designs, and production processes; and the demand for sensors and telematics is placing a premium on vehicle software innovation. Given the increase in electronic content, automakers must collaborate with suppliers and experts outside the traditional auto industry, perhaps using venture funds to nurture companies that can innovate technologically. And they should prioritize R&D to focus on those innovations that address new safety and environmental regulations in the most cost-effective way.

Shipping companies face an unanticipated threat: 3D printing. As more parts and products are manufactured in finished (rather than assembled) form, global components and materials shipments by air, sea, and roadway will plummet. As much as 41 percent of the air cargo business, 37 percent of ocean container shipments, and 25 percent of truck deliveries are at risk because of 3D printing. 

The large, morphing payments sector will be dominated by e-money transactions, particularly in emerging markets with vast untapped customer pools and high cellular usage perfectly suited for mobile wallet applications. Consumer adoption of e-payments in developed and developing countries depends on a seamless and reliable online and offline checkout process and aggressive shopping rewards. Replacement of traditional credit scoring, an imperfect measure of borrower risk, with new metrics that consider a wider array of consumer attributes could be a boon for innovative payments companies.  

Ill-fated industrial companiesmistakenly believe that digitization is for consumer-oriented businesses. And thinking that way is fast becoming a losing proposition. Their successful rivals use advanced digital tools for gains in supply chain management, product design, equipment monitoring, and production. 

Instead of sounding the death knell for bricks-and-mortar establishments, online sales growth is breathing new life into physical stores. In fact, it is increasingly foolhardy to distinguish online and offline sales, as shoppers are creating their own paths to purchase. Today’s global consumers want to move effortlessly across channels, have many retail and product options at their fingertips, and demand full transparency in inventory and pricing. 

Telecom companies have become unhinged from customers, as new rivals offering video, music, mobile platforms, e-wallets, and 180-degree digital experiences are providing the high-tech, high-quality services that telecom firms should be known for. Incremental efforts are unlikely to remedy the situation. Instead, telecom companies must prove that they can monetize the torrents of data flowing through their networks by delivering reliable communications; popular and fresh content on mobile and desktop platforms; and consumer-friendly websites with online billing, troubleshooting, scheduling, and account support. 

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