This article on Sean McCoy’s company blog explains why long-term forces and trends are forcing many heavy industries to reshape value chains, change economics, and disrupt business models.
Digital technologies are making it possible for firms to expand their offering and meet new customer needs and serve new customers. For a manufacturer or heavy industrial company, this means companies that were not your competitor yesterday are your competitor today and tomorrow. The executives at GM and Ford lose many hours of sleep wondering if and how Google and Apple will eat their lunch.
Competitive intensity is also increased by changes in the cost of resources and location economics. Those changes are drying up some profit pools, increasing competition at the remaining ones. Low-cost manufacturers in China used to win on price, and domestic manufacturers on speed. For years, low-cost manufacturers have been re-shoring production as rising labor costs in China neutralized the cost advantage. Now, low-cost manufacturers can win on price and speed. The producers that stayed domestic are finding themselves stuck between a rock and a hard place.
Even if your market is stable, disruptions in other markets can dry up other profit pools, driving competitors into your space. When oil prices tumbled and oil companies needed less metal, metal companies and mines serving the oil and gas industry looked to other sectors that need metal, e.g., construction, utilities, ship builders. As a result, the mines and plants serving those industries had to deal with price pressures and declining volumes, hurting ROA.
Read the full article, Responding to competitive pressures in heavy industry & manufacturing, on the McCoy Consulting Group website.
Ian Tidswell provides an infographic that provides the details of the key 6 steps to creating and capturing value in MedTech, from offer design through market access and reimbursement approval to new product transitions.
Success in the Medical Technology industry requires constant innovation. However, capturing a fair share of the value (pricing) from that innovation throughout the product life cycle is especially challenging given multiple market access hurdles, constrained healthcare budgets and diverse stakeholders.
The steps illustrated include:
- Pre-launch – market access with value recognized
- Communicating the values
- Gaining effective value access
- Segment and target buyers
- Incentives align channel
- In-market – value delivered and captured
View the detailed infographic on the Een Consulting website.
C.V. Ramachandran discusses what it takes to institute digital transformation successfully by engaging a holistic approach that provides support for every part of a company’s value chain.
Big data, machine learning, connected vehicles, industry 4.0, robotic process automation, blockchain … No matter what industry you are in, you have surely come across these popular buzzwords in recent years. These are the phrases that define digital transformation, a modern industrial revolution that has the potential to dramatically transform companies and economies all over the world.
A variety of companies are leading the way, with Amazon, Netflix, and Walmart being some of the first to spring to mind. But these are major corporations in information intensive industries, who have been leading the charge in digital disruption. More broadly, according to a recent McKinsey survey, only about 30% of digital transformations actually succeed.
Read the full article, Digital Transformation: It Takes a Village, on LinkedIn.