Book review

You would have come across many management books that focus on how tech giants have disrupted the industry. But "Smart Rivals" comes across a book which provides examples of various traditional businesses that have been built hundreds of years ago and stay still relevant in the digital age. The companies include Dominos the Pizza chain, Coco-Cola, DBS bank to few more which have stood the test of time and succeeded.

Following are the major themes from the book

Amplify your strengths:

Instead of competing with the tech giants the traditional businesses should focus on its core strengths and amplify the one which gives more impact. In the case of Dominos it has to compete with food delivery platforms, but no food delivery platform can match its order fulfilment experience. So it is a moat. Traditional businesses should adopt digital strategies but in the right direction.

Drive Customer Centricity:

Tech giants are famous for customer centricity. As Amazon's Jeff Bezos says "We have always wanted to be Earth’s most customer-centric company. We won’t change that". Companies like Amazon, Netflix has access to data resources that can offer personalized offerings and exceptional customer focus. But traditional businesses doesn't have access to those data sources, instead they have access to data sources which are impossible for a tech company to get and these data sources are sometimes traditional than digital.

Find a platform opportunity:

Many tech companies either start as platform businesses or get into platforms businesses as a diversification attempt. Platform businesses act as an intermediary for a product/service to a consumer. Traditional businesses too can move from a product to a platform business and harness network effects and build competitive moat. By moving into a platform business allows companies to understand deeper insights about its business including its competitors.

Grow your own ecosystem:

Traditional businesses can grow their ecosystems organically if they have enough resources to do so, else they can have the tech giants as participants in their ecosystem. An ecosystem is a broader concept encompassing a network of interconnected businesses, organizations, and individuals that cocreate and exchange value. An ecosystem can sometimes encompass a platform firm but incorporate many other elements such as suppliers, distributors, competitors, and government agencies.

Manage Frenemies:

So for a business to sell in Amazon or not is an important question to get answered. By leveraging Amazon's platform the businesses gets access to millions of customer base and reach. But the downside risk is to meet the contractual obligations of the platform. Initially who appeared to be friends will turn into foes. So traditional companies have to continuously focus on anticipating potential risks ans strategies to mitigate those risks. Developing effective strategies to manage frenemy relationships demands time. As a result, smart rivals anticipate potential tension and swiftly take action to arm themselves against the encroaching influence of tech giants, instead of passively observing how relationships unfold. An old adage is fitting here: the best time to plant a tree was twenty years ago, and the second-best time is now.

Bounce back from disruption:

Traditional businesses are always at a risk of getting disrupted by tech giants.How should incumbent traditional businesses react to these disruptors? There is no one right way to respond to disruption, and the decision will obviously depend on traditional businesses’ capabilities as well as growth opportunities in other markets. While disruptions are difficult to predict or preempt, smart rivals demonstrate the ability to recognize such disruptions as they emerge. They strategically engage in battles only when the odds of triumph are in their favor. In situations where disruption unfolds swiftly and becomes inevitable, smart rivals rebound by forging a fresh growth trajectory that capitalizes on their existing proficiencies.