The Hindu Business Line : The dynamics of competition

The story of Rip Van Winkle, the famous character from Washington Irving’s book published in 1819, revolves round his reaction to the changes that he found when he woke up after a deep slumber that lasted several years.

In the real world too, we find that human ingenuity has changed and transformed the lifestyle of people in amazing ways. In fact, the changes that traumatised Rip Van Winkle would appear quite modest when compared with the phenomenal pace at which new products are being created in the new millennium.

Of course, the seeds of this unprecedented transformation were sown at the commencement of the last century. According to Alvin Toffler, nearly 90 per cent of the consumer goods in use today have been invented during the last 100 years. This includes the computer, which he says is man’s greatest invention after fire and the wheel, in that order of importance.

Continuing with the Rip Van Winkle theme, if a manager in India had slipped into a coma in 1945 and returned to wakefulness in 1960 – after an interval of 15 years – he would not have faced too many situations beyond his comprehension and experience.

Competitive pressures

But if a similar unfortunate event had happened in 1985 with the manager returning to work in 2000, he or she would have been faced with an altogether different ball game. The person would have had a far more difficult task adapting and adjusting to the changes in technology – and more importantly – the impact of these changes on business practice. The most significant change that would have completely nonplussed the Indian manager would have been the critical need to be competitive in business – a stark and stunning reality unknown in an earlier era.

Until the last decade of the last century, well established companies usually had plenty of time to absorb changes in business circumstances. All that organisations had to do was to keep expanding their customer base. During the 1990s, however, things began to change. The competitive pressures became so acute that everyone and everything in business came under the microscope. Technological developments modified some processes, made others obsolete, and moved people from one function to another e.g., finance to information technology, sales to service, and so on.

The advent of the Net

For many organisations in India, the Internet has just begun to influence the competitive scenario.

Businessmen are aware that it will make their companies more vulnerable; that in order to succeed and stand alone, they must strive to attain the highest standard in every function. The Internet is as potent a force in the 21st century as electricity was in the last century. It is now easier to store and retrieve knowledge. Employees collaborate more effectively, whether they operate from the same location or from different time zones.

The changes brought about by the Internet have been more omnipresent than any other technology. Its versatile nature and accessibility enables every company – big or small – to enhance the efficiency of almost everything that it does. It is the gateway to globalisation.

“There has never been a commercial technology like this in the history of the world, whereby from the minute you adopt it, it forces you to think and act globally” [Robert Hormats]. In other words, it increases the intensity and dynamics of competition in a phenomenal way.

It is no longer adequate to concentrate only on the key tasks. It is necessary to analyse and examine all the corporate processes and procedures continuously and collectively. Every employee and every task is part and parcel of the corporate body, which is subject to a constant pull and push by strong competitive forces. This is much like a ship being tossed about in turbulent waters. Hence, the manager needs to know in what direction the corporate must be steered in order to survive, succeed, and thrive. He must be a jack of all trades, and master of men and matters. His focus must always be on making things better than before; it must be a continuous search for improvements.

The quest for innovation must take into account the need to dispense with the old. Continuing to use an existing version is as good [or as bad] as not working at all. Once the gun was invented, it made sense to produce a better gun, than an improved sword.

(The author is a Chennai-based freelance writer.)