of CEOs think competition will increasingly come from other sectors or sub-sectors
Customers today defy classic notions of what drives their purchasing decisions. Competing within traditionally defined demographic segments, channels, product/service offerings, geographies or industries increasingly doesn’t work. Customer relationships are now much more fluid: they’re moving from one-off transactions toward broader and longer-term experiences that can span different product and service offerings, channels, countries and sectors.
That’s leading CEOs to take a more flexible view of what business they’re really in. Companies are increasingly focused on customer problems, and looking at how the organisational capabilities that differentiate them can be used in cross-disciplinary ways to solve those problems. That’s taking businesses into adjacent – and sometimes completely new – sectors. More than half (56%) of CEOs think it likely that companies will increasingly compete in new industries over the next three years. Three in ten have entered a new sector or sub-sector in the past three years; and 21% have considered doing so.
CEOs need to develop a few key capabilities to succeed. Navigating their way through new competitive landscapes will require a simple but committed concentration on doing what they do best. Drawing on their differentiating capabilities, they will then need to create new value in new ways through digital transformation, developing diverse and dynamic partnerships and finding different ways of thinking and working. The companies that can effectively combine these highly interdependent approaches around simple yet powerful value propositions will be positioned as winners in the new competitive landscape.