Firms have always had difficulty spotting new competitors, and business history is full of stories about incumbent market leaders being displaced by a smart new entrant. If anything, the task seems even harder today. Unrelentingly rapid changes in technology, shifts in consumer tastes, and the rise of global markets are blurring traditional industry boundaries. Many firms are now competing with companies that, five years ago, were thought to be operating in entirely different industries.
Consider, for example, retail banking. Ten years ago in the United Kingdom, this sector was dominated by four major clearing banks, which faced relatively minor competitive threats from a number of smaller, regionally based retail banks. They are now no longer the top players in the sector and do not set the lead in prices, service standards, or new products. New entrants into the sector include several former building societies, or mortgage-based financial institutions, that have converted themselves into banks, as well as several supermarkets. Retail banking now focuses on selling financial services, something that many older bank managers simply cannot understand. Retailers, such as Marks & Spencer, clearly do, offering a range of financial services to customers. Ten years ago, what banker would have worried about competing with a supermarket or a leading retailer of women’s garments?
Much the same scenario is occurring... To read the complete article, login or sign-up using the form below.
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