When you open news and read it, you will notice for overall trend of “downsizing”, or close down branches, relocated core process into low cost countries. It first reaction for traditional business management, if you can not generate more revenue, then the better option is to bring down the cost of operating, that involved downsizing and relocate them into lower cost countries. This is first reaction, and nothing wrong.
But if you think in positive way, bring down the scale only slow you down as well. As a company you still need to focus on figure out where to get more revenue, or doing something market willing to buy from you, that is the fundamental business model. Company can not run forever if can not resolve the revenue generating issue. Your banker who can financing you for short and long term will eventually come to you for loan payment or stop further financing, if you can not improve your revenue generating power.
This is why we do not surprise to see, some companies is “sold”, take over or acquire. But if you analyze for more insight, you will notice sometime the company bought another company is not in the good shape either. They are encounter slow down from the core business and hope so by acquire another business can give them better synergy or achieve diversified portfolio.
Since Internet being invented, and first ecommerce transaction did in 1995, it eventually become what we called digital economy. Business run at speed of internet time. Most of the decision is one click away, buy from another cheaper source supplier. It force rethinking for how to do business in the new way.
In the past, giant size retail mall and merchant, include hypermarket focus on size does matter approach, to attract buyer come to visit. With the internet and online purchase so hassle free nowadays , we will notice lot of those retail outlet is closed down or downsize. As you can notice for bookstore is start to do cafe business, conduct workshop and other related business that you never thought they will interest to be involved in.
New world always call for new business model, it just like in the past we had music store sell CD, DVD, Blue-ray DVD, but their value proposition is being shifted. For the singer in the past used to release CD, he or she need involved in live concert or involved in acting for film or TV and so on.
For those who are follow the technology trend closely and market closely, and willing to make the large scale digital transformation from the existing business, they will survival (but this need to acting quickly before other competitor acting to it before you).
With the right business mentality, the business leader should be bold enough rethinking what business you are in, and what should you do now and future and sync with your business vision. Maybe it time to revisit your vision. Purely fire fighting in short term without wholistic masterplan in place, you are end up just incremental catch up, but do not reap the true business benefits for being riding on the digital transformation (DT) trend.
Feel free to contact E-SPIN for the various challenges and requirement related to digital transformation (DT) and any business initiative you had in mind. We see how we can accelerate your digital transformation journey together.