Taking a broader view to contend with disruption

Taking a broader view to contend with disruption

Companies can no longer expect to know who their biggest competitors are. It is no longer steel producer versus steel producer nor one consultancy firm against another. Rather, companies are taking a more objective-driven approach and jumping across industries.


I was recently reading an article that discussed the consumer use of artificial intelligence (AI) and Apple founder Steve Jobs’s original vision for a digital AI assistant. As a result, the tech giant acquired a company in an attempt to become a leader in this space. Digital assistant Siri was created and while improvements have been made since its conception, the system remains fairly limited. Although the vision was there, and as much as it was progressive, the concept did not become a reality and evolve quickly enough. In the meantime, however, Amazon launched its own AI product, Alexa, while Google began to market its Home Smart speaker. Both of these offerings appeared strides ahead of Apple’s product in terms of capability. The difference was that Amazon and Google’s visions were bigger and their actions both matched these visions and continued to move forwards.


You would not necessarily say that Amazon, Apple, and Google are competitors in the same industry; they are certainly in the same tier in terms of size and global brand impact, and there is significant overlap in terms of the three firms’ customer base, but these are three very different companies. If Apple had been performing a threat analysis 15 years ago to establish who it needed to watch in terms of rivalling Siri, Google may have been considered, but I suspect Amazon would not have been top of the list.


In the same way, procurement executives connot focus solely on procurement. Function heads need to look externally at the markets surrounding the organisation. The function and the wider business can no longer limit their view of the business environment to traditional competitors. They need to look across industries and try to anticipate where the next competitive threat will come from. The answer may not be obvious, and it is difficult to know who is going to come up with a competing solution or something completely different that relegates your solution to the scrapheap, but this is an essential exercise. It is not enough to simply find the four companies closest to yours. Instead, procurement executives need to ask themselves :

  • What are their core capabilities?
  • Who is their target customer base?
  • Consider other businesses with similar capabilities in different industries, and other companies addressing the same customer base, because they may be about to move into the same space.

For procurement to gain visibility of these blurred lines across industries and help the business stay ahead, the function needs to seek more information from its supply base. Find out who else is buying a similar mix of products, or using a similar mix of services, as these companies may be moving into a competitive position in the same markets. Suppliers can and should become a key source of intelligence in this area to help procurement keep a close eye on these factors. This way both procurement and the wider business can be better prepared for the changes that are coming.

Read the full interview here on Sourcing Solved


Kelly Barner is the owner and managing director of Buyers Meeting Point, an online resource for procurement and purchasing professionals, and the director of intelligence for Palambridge, a virtual platform of on-demand procurement experts, technology and intelligence.


Image: ClementGuegan / Shutterstock.com


This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.

Kelly Barner
Posted by Kelly Barner

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