Every year a number of businesses sit down and do their strategic planning. This typically includes a strengths, weaknesses, opportunities and threats analysis, commonly known as SWOT, where you discuss challenges internally, explore external opportunities, and build an annual plan with your quarterly objectives. On the outside this looks great, but there is a piece missing — one that could set you up for failure before you even get started. I’m talking about underlying industry trends. Without a discussion about the trends inside and outside of your industry, you could potentially suffer the same fate as companies like Kodak (check out the misunderstood story section). They put all their money on one major trend, completely ignoring others, which ultimately put them out of business.
The actual implementation of SWOT is quite straightforward. Challenge your executive team, or even your entire company, to evaluate your industry, market, products, services, as well as trends that relate to technology, government regulations, geography, economics, etc. The point is to list out as many of the foreseeable variables that could impact you and your business in both the short term and long term. This information should then be a part of your opportunities and threats conversation, and ultimately shape your business model going forward.
Act on the Unavoidable Trends
The real challenge then becomes when and how to act on a trend. In the case of Netflix and Uber, they knew streaming videos and driverless cars, respectively, were major trends that would impact their businesses. Instead of waiting for the technology to advance to the point that drove the movements, they acted before the technology was available. They both built business models that would eventually transition to address the major trends they saw coming. Netflix is already capitalizing on the profits from streaming video, and UBER’s business model will fully support autonomous vehicles once the technology is available.
This type of forward thinking is critically important as it relates to technology today. Major disruption is coming in a wide variety of industries. If you are not planning for the change, you are putting yourself at risk of being too far behind to catch up when the trends take over. Look at 3D printing for an example. There is no doubt it will impact the manufacturing industry. From on-demand replacements parts, to industrial printing shops, this is a major trend that has to be addressed in the strategic plans of any business doing manufacturing today. Examine your business model; do you stand to win with 3D printing, or lose? If it’s the latter, it’s time to start building a new plan. This trend will not go away, so be prepared, and get ahead of the movement.
The same situation applies to technology trends in almost every industry. Ask yourself about which ones will impact your business, and how you can build a business model that will eventually benefit from those trends. The window for reacting is getting smaller and smaller, and companies in a position to take advantage will do so swiftly. Make sure you are the one that can take advantage as well.