A wake up call

by Josh Bernoff   Article

Welcome to the Age of the Customer. Invest accordingly.

“Everyone has a different wake up call. Maybe it was the day you heard Amazon is selling more books on Kindle than on paper. When was the last time you talked to a travel agent? Or maybe you realized the world had changed when you whipped out your iPhone in Home Depot and checked the ratings before buying that air conditioner. Disruption is rampant, it’s hitting every single industry, caused by customers with powerful technology on their side. The question is not whether your industry will be disrupted. The question is when.

We took a close look at Michael Porter’s five forces, the definitive framework businesspeople use to analyze competition. There’s no longer any barrier to potential entrants or substitutes — in a digital world, competition can come from anywhere. Customers have real-time information about pricing, product features and competitors; they hold all the advantages. And the key source of supply now is talent — and talent can get up and leave. The competitive barriers that Porter defined matter far less now. The only sustainable source of competitive advantage, the only defensible position, is to concentrate on knowledge of and engagement with customers. (Scroll down for video.)”

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