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Pivot Or Perish
2021 would see the emergence of the new order. Many paradigms would be broken and new models would come through. Pandemic as an event opened the sluice gates on what was anyway coming.
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In many ways, 2020 has been a watershed year for the entire World. It altered human behaviour and almost irreversibly affected a few business models. While much has been chronicled of the impact and how each business is trying to recalibrate their business models, let us study what opportunity areas that the pandemic created and reflect whether the Organizations actually did pivot.
Digital business model
Many traditional businesses have seen a steep uptick in the online sales. As evident in the chart below, across categories, there has been a significant jump in page views as well as purchases online.
So the consumer is certainly online…. How many businesses ?
Many traditional businesses and the eco-systems aren’t exactly digital yet.
Let us study this sector. EduTech has been a surise sector and it is almost a taboo in the VC circles not having an EduTech investment. One of India’s biggest EduTech unicorn is an EduTech company.
Paradoxically, there are millions of students who have no access to digital and therefore are distressed and are staring a potential gap year.
Govt., has not managed to put together a cohesive plan to address this glaring gap and to help the deprived students catch up with the others taking classes online.
What is the infrastructure available at the State’s disposal?
- Doordarshan which has a reach of about 100 million households
- All India Radio which has a reach of 92% of Indian population
If the Governments aggressively uses the above mediums at their disposal to make modules, India could potentially create a new and sustainable stream for mass education.
The EduTech companies raising significant capital should look at unlocking the massive opportunity at the bottom of the pyramid by creating viable options.
State Education departments could probably consider signing up with a company like Byjus to supply the tablets with pre-loaded classes to the deprived by allocating the funds instead of force-reopening of the education institutions to salvage the academic year.
None of the media buying is done digitally. The heavy dependence on media planners to propose the bouquet of TV/Print/Radio channels to be bought for a desired objective of a brand could be done digitally but it still is, heavily people dependent.
The entire media buying as a business could co-opt, create media buying tool which could then result in them upping their efficiency and their profitability significantly.
This would help the broadcasters and media owners’ side of business as well because they then won’t need to employ as many people as they currently do, to service the agencies.
Strengthening Customer Experience:
The pandemic shall differentiate the companies focussed on improving the customer experience from those which are internally focussed.
So what has your business changed in its effort to up the customer experience?
Far too many companies have embraced and indirectly propagate the narrative of cost fatigue.
It is something that is prone to happen when Organizations downsized and cut salaries… but beyond this exists the zone of “indifference”.
Tried interacting with any of the non-jio telecom operators of late on any social platform?
Compare your experience of interacting with them with your experience of interacting with hyperlocal delivery companies and you shall find that the response of the social media teams in the hyperlocal business far more proactive despite the huge number of variables and complexities.
It is about the culture and the consumers are constantly forming and judging the brands basis each of their experiences.
New Avenues for growth:
Stringent cost rationalization might help an organization tide a quarter or two, but the critical question is what does the CEO do post that?
Star hotels have started take away services of Chef’s special. Swiggy is accelerating on delivery of groceries. Amazon wants to deliver medicines. There are always more profitable adjacencies that can give significant tailwinds to the business. The critical differentiating factor however, is the agility of the CEO and the pro-activeness of the board.
Why did the news channels miss sighting the shorter digital news format?
Why did the television channels not create OTT platforms much ahead?
Why did the FM players not create a Spotify and why are they still catching up on podcasts?
Why did the FM players not identify the non-music genre and create an audible?
Why did the traditional Modern Trade Outlets think of hyper local models?
Why did the biggest diaries not create the new age milk and grocery delivery?
What’s fascinating in business is that the companies that are large want to hide under the garb of how the size affects their ability to be agile and the smaller ones, meagre cash disposal.
Bottomline, if the CEOs are desperate to bring a change, they would.
Personalization is the biggest differentiator across sectors and categories. Businesses that crack the personalization would be on the top of the pyramid.
It does take extensive research and deep insights drawn from all the touch points with the customers, but how many brands are investing adequately?
Do you have the right CXOs?
Topmost question on every Investor or Board member’s mind should be, whether you have the right CXOs in the Organization.
Any CXO who doesn’t have a multi-channel or an Omni-channel business strategy, any CXO who doesn’t understand how to harness the data is probably a luxury to carry. In the rapidly evolving business situation, it is not just essential to have teams that understand how to construct the business in these difficult times but he/she should also be reskilled.
Out sourcing / Contract jobbing
More than ever before, outsourcing makes the businesses more agile. While in sectors like IT outsourcing and contract jobbing is evolved, the other sectors have to embrace the same to build sustainable and accountable business models.
Could non-core business operations be outsourced in an FM network?
Could Sales and Marketing of the large TV networks in non-focus markets be outsourced?
Could certain functions, say marketing, be totally outsourced?
How many CEOs are looking at this and willing to take the punt?
Marginal changes would only yield marginal improvements,
2021 would see the emergence of the new order. Many paradigms would be broken and new models would come through.
Pandemic as an event opened the sluice gates on what was anyway coming.
Disclaimer: The purpose of this post is ONLY to hold the mirror and not be an arm chair critic.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.