It is a great question. It is challenging, confronting and often affronting. Contemplation on that fundamental point often leads to reviews, reflections and determinations on the current business model.
Corporate history is littered with examples of economy-leading and dominant sectors and entities rapidly becoming redundant and irrelevant.
In the early 1900s railways confronted a significant change in the competitive landscape. Motor vehicles and societal mobility necessitated a change of track, so to speak.
More recently, the appeal and presence of 6-and 8-cylinder “gas guzzling” family motor vehicles have been impacted by the sophisticated innovations of high-powered 4-cylinder vehicles and the ubiquitous SUVs (Sports Utility Vehicles).
Light bulb manufacturers have had to gear up and retool to embrace technological change. And what of the humble printing machine. 3-D has been a revolutionary addition to printers, manufacturing and medical implants.
Bicycle-powered couriers, who were once conspicuous in most cities are, today, a mere fond memory.
Charge-card services like American Express are exposed, threatened and losing appeal. At least five significant mobile payment systems, including those being promoted by Apple, Google and Facebook are in advanced stages of development. Many people and business will reasonably ask why they should retain and accept charge-cards, like American Express.
How ironic! Kodak, the very essence of traditional photography, developed digital photography. The company did not readily and quickly embrace the concept. That was left to competitors and, more significantly, substitute entities, including electronic and mobile phone manufacturers. Modern photography is not reliant on silver and paper-based reproductions. It is a whole new industry.
Protecting long-established products, practices and applications can be laudable. It can also be ill-advised. Recently, Kodak had to seek and to secure Chapter 11 Bankruptcy protection in the United States of America, to enable it to continue to trade. There is a long return journey to be negotiated.
And now, the august institution, Australia Post, has heralded a pending 43% increase in postage costs for letters from 70 cent to $1:00, with a lengthening in delivery times from “next day” to 3 days.
Can and will post ever effectively compete with - and, possibly beat - emails, texts and the spoken word? Efficiency, effectiveness and cost comparisons imply it is a formidable challenge.
In recent times Australia Post has been progressively refining its business model. This is evidenced by the introduction of digital post office boxes, and the broadening of the product/service mix available from Post Shops. The typical range totals some 1300 SKU's (Stock Keeping Units), of which fewer than 60 relate to postal and philatelic merchandise. That is around the same product range as an Aldi discount supermarket.
A significant growth in the home deliveries of products purchased on-line reflects the dynamics of the prevailing market forces. And yet, on-line sales still only represent 6.3% of total resale sales.
The cascading effect on the supply chain highlights the importance of logistics and distribution.
Little wonder that Japan Post has recently lodged a reported $6 billion takeover for Toll Holdings, Australia's largest logistics company, with operations that extend throughout Asia. That is a pending threat to the presence and dominance of Australia Post within Australia.
Future enhancements in nano-technology will inevitably result in smaller products' services, applications and, yes, businesses. Prices too, will become smaller. Increased productivity will result in more free-time and better timing. Skill-sets will vary.
CONTEXT OR CONTENT
The true measure of relevance of a company, product, service and application is often determined by its “fit” to the marketplace.
That is, the context, which can be, and often is, more important and influential than the content.
Indeed, the former can and does impact directly on the latter.
For instance, are postal services redundant to most? Some 98% of mail-usage is generated by business and public sector entities complying with regulatory obligations and practices. To many the service offering that is not pertinent, nor applied by individual consumers.
Therefore, why persist with the trading name:
It is as relevant as Post and Rail Fencing is to urban residents. What does it all mean?
These case studies are further evidence that the changes being experienced at present are not seasonal or cyclical. They are indeed structural.
It behoves all business owners and leaders to reassess and redefine:
What industry are we in?
The answer will inevitably evoke a lot of questions ... and changes.