Industry 4.0 Survive or Die Environment - A BSGM Framework Approach

Introduction

What is Industry 4.0? Industry 4.0 often referred to as the Fourth Industrial Revolution, represents the next phase in the digitization of the manufacturing sector, driven by advancements in several cutting-edge technologies. It involves the integration of cyber-physical systems, Internet of Things (IoT), artificial intelligence (AI), cloud computing, big data, and automation to create "smart" factories and enhance production processes. Looking at the rapidly evolving landscape of Industry 4.0, which is marked by automation, digital transformation, and cutting-edge technology, presents organisations with both previously unheard-of possibilities and problems. Some businesses thrive when they embrace innovation and flexibility, while others struggle and eventually fail. Sustained growth and competitiveness depend on an understanding of why formerly successful organisations start to struggle and how failing businesses may overcome their setbacks. Through the framework of the Business Survival Growth Model (BSGM), a comprehensive strategy that provides an organised method for encouraging organisational innovation and resilience, this article examines these occurrences.

Understanding Why Businesses Struggle

Financial Sustainability

One of the primary reasons businesses struggle is the inability to maintain financial sustainability. If a business cannot generate sufficient revenue to cover its costs and achieve profitability, it risks failure.

Question: Can your business generate enough revenue to cover its costs and achieve profitability in the long term?

Example: Kodak

Kodak, despite being a market leader, failed to pivot toward digital technology in time and could not sustain revenue from its declining film business. Lack of financial sustainability led to its bankruptcy.

Market Competition

The competitiveness of the market also plays a significant role in business struggles. Without a sustainable competitive advantage, businesses may be outpaced by competitors.

Question: How competitive is your market, and do you have a sustainable competitive advantage?

Example: Blockbuster

Blockbuster failed to recognize Netflix’s digital model as a competitive threat. While the market shifted to streaming services, Blockbuster remained stagnant, losing its competitive edge.

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Technological Obsolescence

Technological changes are rapid in Industry 4.0, and businesses that fail to keep up with technological advancements risk becoming obsolete.

Question: How quickly do technologies in your industry become obsolete, and how are you mitigating this risk?

Example: Nokia

Nokia struggled when it failed to embrace the smartphone revolution. Despite its early success, the lack of adaptation to new technological trends resulted in a loss of market dominance.

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Regulatory Compliance

Regulatory compliance is crucial for business survival. Changes in laws and regulations can disrupt business operations, resulting in penalties or the need for costly adjustments.

Question: Are you compliant with all relevant regulations and standards, and how do changes in regulations affect your business?

Example: Volkswagen

Volkswagen’s failure to comply with emissions regulations led to the infamous Dieselgate scandal, damaging its reputation and costing billions in fines and lawsuits.

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Economic Downturns

Businesses need to be resilient during economic downturns and fluctuations in demand. A lack of financial reserves or an inability to adjust operations can lead to failure.

Question: How resilient is your business to economic downturns and fluctuations in demand?

Example: Toys "R" Us

Toys "R" Us struggled to adjust to changing economic conditions and shifting consumer preferences. When the retail market was hit by e-commerce competition, the company was unable to restructure efficiently and eventually declared bankruptcy.

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How Struggling Businesses Become Successful

Market Expansion

Targeting new markets or customer segments can help struggling businesses regain momentum and foster growth.

Question: Are there new markets or customer segments you can target to drive growth?

Example: Microsoft

Under CEO Satya Nadella, Microsoft expanded into cloud computing services with Azure, entering a rapidly growing market and ensuring sustainable growth for the future.

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Product Innovation

Innovating new products or features that meet evolving customer needs can reinvigorate a business.

Question: Can you develop new products or features to meet evolving customer needs and preferences?

Example: Apple

Apple’s focus on product innovation, particularly with the introduction of the iPhone, revolutionized the mobile phone industry and enabled it to dominate the market.

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Strategic Partnerships

Forming partnerships with other companies can open up access to new markets, technologies, or resources.

Question: Can you form strategic partnerships to access new markets, technologies, or resources?

Example: Tesla

Tesla has formed strategic partnerships with companies like Panasonic to improve battery technology and accelerate its growth in the electric vehicle market.

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Talent Acquisition

Attracting and retaining the right talent is essential for driving business growth and innovation.

Question: Do you have the necessary talent and skills to support your growth objectives?

Example: Google

Google’s focus on attracting top talent has enabled the company to maintain its innovative edge in fields such as AI, cloud computing, and autonomous vehicles.

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Scalability

A business’s ability to scale its infrastructure and processes effectively is crucial for growth without significant operational challenges.

Question: Can your business infrastructure and processes scale to accommodate growth without significant challenges?

Example: Amazon

Amazon’s highly scalable cloud infrastructure through Amazon Web Services (AWS) has allowed the company to accommodate rapid growth, making AWS a leader in cloud services.

Introducing BSGM Framework

What is BSGM Framework?

BSGM Framework is a strategic tool which is called the Business Survival Growth Model (BSGM) Framework was created by Austin C. Eneanya to assist companies in surviving and even gaining higher market share in the cutthroat, rapidly changing world of Industry 4.0. In order to promote innovation and propel growth, The model generally explains that what is a survival system for one organisation is a growth model for another organisation and vice versa. BSGM Framework explains for any organisation to grow, they must first learn to survive. This framework takes into account that there are 4 different spectrums of survival to growth, which are: Brand Graveyard <-> Survival Class <-> Comfort Class <-> Wealthy Class <-> Extravagance Class (Acquiring other brands).

What is the BSGM Framework About?

The BSGM Framework focuses on two critical phases for any business:

1. Survival Phase: Ensuring the organization can withstand challenges and market pressures.
2. Growth Phase: Leveraging internal strengths and external opportunities to dominate the market.

The framework highlights that before companies can expand sustainably and gain market share, they must establish resilience and a solid basis. It divides the process of survival and expansion into four major components, each of which addresses important organisational concerns including who, what, why, when, where, and how a firm runs. These components stand in for important facets of corporate operations and strategy.

How Does the BSGM Framework Work?

The BSGM Framework is divided into two interrelated models: The Survival Model and The Growth Model. Together, they provide a comprehensive approach to navigating the complexities of modern business. In the Survival Arm of the Model of BSGM, it explains that for any organisation to survive in today’s fast-growing business environment they should be able to practically, develop, implement and evaluate the “Who”, “What”, “Why”, “When”, “Where” and “How” business questions of the business, while maximizing the internal forces acting within the organisation. That is responsible for either the growth or survival of the business.

1. The Survival Model: Focus on Resilience

The Survival Model provides a blueprint for businesses to build the foundation necessary to withstand challenges, such as economic downturns, technological disruption, and competitive pressure. It is centered around four critical "blocks" that work together to enhance a company's internal coherence and its ability to survive adverse conditions.

Block 1: Organizational Culture

• Focuses on cultivating a resilient, adaptable culture.
• Leadership must establish and protect a culture that promotes innovation, collaboration, and flexibility.
• Example: IBM transformed its culture to focus on service-driven solutions rather than hardware sales, allowing the company to survive and adapt to technological changes.

Block 2: Management Tools and Leadership

• Deals with strategic management and leadership.
• Strong leadership is essential for making strategic decisions that enhance resilience and future-proof the business.
• Example: General Electric adopted Six Sigma management practices to streamline efficiency, ultimately improving competitiveness and longevity.

Block 3: Motivational Systems and Human Resources

• Focuses on creating systems to motivate employees and align them with the company's goals.
• Employees are the backbone of resilience, and having a motivated workforce contributes significantly to overcoming challenges.
• Example: Google's employee-friendly culture and motivational systems foster creativity and innovation, helping the company stay ahead.

Block 4: Business Processes and Technology Systems

• Focuses on optimizing business operations and technology infrastructure to safeguard the business from external risks.
• Effective processes and modern IT systems can help shield the company from external market shifts.
• Example: Toyota’s Just-In-Time (JIT) manufacturing system has made it more resilient to supply chain disruptions and market fluctuations.

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2. The Growth Model: Focus on Market Dominance

The Growth Model builds upon the Survival Model by leveraging internal strengths and responding to external opportunities to achieve market leadership. The Growth Model works within the same blocks but emphasizes growth-focused strategies that aim to maximize market share and scalability. In the Growth Arm of the Model of BSGM; This involves growth forces from within the organisation and outside the organisation (internal and external) acting simultaneously to give the organisation an edge over competitors operating within the same industry. With the aim/objective of gaining the highest market share.

Block 1: Organizational Culture (For Growth)

• In the growth phase, the culture must not only support survival but also drive creativity and market leadership.
• Example: Amazon’s customer-first culture fosters innovation, which has helped it become a global leader in e-commerce and cloud computing.

Block 2: Management Tools and Leadership (For Growth)

• Leadership in this phase focuses on taking calculated risks and capitalizing on opportunities for expansion.
• Example: Netflix expanded beyond DVD rentals by adopting a visionary approach, pivoting to streaming and later into original content production.

Block 3: Motivational Systems and Human Resources (For Growth)

• Motivational systems should align with growth targets, ensuring employees contribute to new innovations and market expansion efforts.
• Example: Salesforce’s motivational systems, combined with a strong focus on innovation, have helped it grow into a dominant force in the cloud-based software industry.

Block 4: Business Processes and Technology Systems (For Growth)

• In the growth phase, businesses should focus on ensuring their operations and technology systems can scale effectively to accommodate market expansion.
• Example: Tesla has optimized its technology infrastructure to enable rapid scaling in the electric vehicle market while maintaining innovation in battery technology.

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External and Internal Forces

The BSGM Framework takes into account the dynamic interaction between internal forces (like company culture, leadership, and technology) and external forces (such as market competition, technological change, and economic conditions). The framework teaches businesses to balance and optimize these forces:

• Internal Forces: and the BSGM Blocks are connected to each other such that if the Block 1 is bad and corrupted it automatically affects block 3 and 4, if block 2 is approached wrongly then, block 3 and block 1 is affected. If block 4 is approached, managed in an inappropriate way, it affects customer relationship and block 2. This model explains that for an organisation to survive and grow beyond its current status quo, it must maximize the synergy and interconnectedness each BSGM block has to offer. In reality the survival and growth model postulation is applied in each block of the BSGM system.
• External Forces: The BSGM External Forces acting on the diamond influences the individual block in which the forces are acting upon. For example, economic forces influence the purchasing power of the organisation to staff and other stakeholders. Which is controlled by the management and cash advancement running the organisation activities.? Technological advancement influences the I.C.T systems and tools an organisation adopts to keep the organisation relevant and effective. The impact of the external forces usually has a direct or in direct impact on one or more blocks for an organisation internal force acting within.

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The BSGM Framework: A Pathway to Success

The Business Survival Growth Model (BSGM) Framework offers insights into why businesses struggle or thrive by focusing on two paradigms: the Survival Model and the Growth Model.

The Survival Model: Nurturing Resilience

The Survival Model emphasizes building a strong foundation to withstand market challenges.

Block 1: Organizational Culture

A positive culture fosters innovation and adaptability.

• Implementation by IBM: Faced with declining hardware sales, IBM transformed its culture under CEO Lou Gerstner in the 1990s. By focusing on services and customer solutions, IBM revitalized its business.

Block 2: Management Tools and Leadership

Effective strategies and leadership guide organizations through change.

• Implementation by General Electric (GE): Under Jack Welch, GE adopted Six Sigma methodologies, enhancing efficiency and leadership development, which improved profitability and competitiveness.

Block 3: Motivational Systems and Human Resources

Motivated employees contribute to success.

• Implementation by Google: Google’s motivational systems, including employee perks and a culture of innovation, have attracted top talent and fostered a creative workforce.

Block 4: Business Processes and Technology Systems

Optimizing processes and technology enhances performance.

• Implementation by Toyota: Toyota’s Just-In-Time (JIT) manufacturing and continuous improvement processes (Kaizen) have led to high efficiency and quality.

The Growth Model: Striving for Market Dominance

The Growth Model focuses on leveraging internal strengths and external opportunities to achieve market leadership.

Economic Conditions and Financial Management

Navigating economic forces requires sound financial strategies.

• Implementation by Starbucks: During the 2008 recession, Starbucks closed underperforming stores and focused on core offerings, later expanding with new products and international growth.

Technological Innovation

Staying relevant requires embracing new technologies.

• Implementation by Tesla: Tesla’s focus on electric vehicles and renewable energy technologies has positioned it as a leader in the automotive industry, capitalizing on the shift toward sustainability.

Additional Questions for Specific Sectors

Technology and Software

Question: Are you investing in research and development to stay ahead of technological advancements, and how are you protecting your intellectual property?

• Example: IBM: IBM’s strong investment in R&D, particularly in quantum computing, has kept the company at the forefront of technological innovation.

IoT

Question: Are your IoT devices and systems secure and reliable, and how are you monetizing the data they generate?

• Example: Siemens: Siemens has leveraged IoT in its manufacturing processes, using data from IoT devices to optimize production and supply chain management.

Services

Question: How can you differentiate your services from competitors, and how are you ensuring customer satisfaction and loyalty?

• Example: Zappos: Zappos has built a strong brand by focusing on exceptional customer service, which has become a key differentiator in the competitive online retail market.

Manufacturing

Question: Are your manufacturing processes efficient and cost-effective, and how are you addressing supply chain disruptions and risks?

• Example: Toyota: Toyota’s lean manufacturing processes have ensured operational efficiency, even during times of supply chain disruptions, allowing it to remain competitive.

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Conclusion of the BSGM Framework Perspective

The ability of businesses to innovate, adapt, and match internal structures with external reality determines whether they succeed or fail. By emphasising culture, leadership, motivation, and procedures, the BSGM Framework offers organisations a road map for fostering resilience and pursuing development.

Businesses may evaluate their capacity to overcome obstacles, adjust to changing market conditions, and seize new possibilities by posing important survival and growth questions. Applying these ideas may transform failing organisations into market leaders and keep successful ones from lagging behind in the quickly evolving Industry 4.0 landscape, as shown by real-world examples of companies like Microsoft, Netflix, IBM, and Tesla.