Scene Setter © alangnewman @ yahoo.com 1.We know we know 2.We know we don’t know 3.We don’t know we know 4.We don’t know we don’t know

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Text of Scene Setter © alangnewman @ yahoo.com 1.We know we know 2.We know we don’t know 3.We don’t...

(Changes in) Consumers Buying Behaviour

Scene Setter

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We know we knowWe know we dont know

We dont know we know We dont know we dont know It is natural for us to focus on items 1 and 2 but in a hyper connected world where one thing can quickly lead to another we need to pay much more attention to items 3 and 4.

From where I stand as a consumer and as a management consultant I think we are losing sight of what business were in and what that means.1What Business Are We In ?

alangnewman @ yahoo.comJust take a few minutes to jot down your view on what business your organisation is in.2What Business Are We In ?Were in the customer-satisfaction businessWere in the financial rescue businessWere in the financial services businessWere in the business of helping people manage lifestyle riskWere in the insurance businessWere in the business of making moneyWere in the protection businessWere in the business of regulated financial servicesWere in the business of selling protection products

alangnewman @ yahoo.comThis is a list of answers that often crop up. Its a strong symptom of weak understanding.3Half Empty or Half Full ?

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Identifying. Passive. No action.CHALLENGES Defensive. Negative.Lacking Confidence.

Why notOPPORTUNITIES?CHANGINGWORLDClich. Defensive

When hasnt it been aChanging World ?The ABI spent a good deal of time, money, and reputational capital producing this report last year.

It obviously thinks Changing World is the BIG deal because thats in BIG text. But its a bland clich its always been a changing world.

Why Challenges ? Why not opportunities?

Why Identifying? Thats just sitting on our hands. Why not responding to opportunities in an increasingly digital world?4Good News Bad News

The GOOD NEWS is that we dont have to worry about STRATEGY anymore. The Regulators doing that for us.The BAD NEWS is that we dont have to worry about STRATEGY anymore. The Regulators doing that for us. alangnewman @ yahoo.comWhy are we paying Directors of insurance companies? Defining and executing strategy is supposed to be their main job and theyve abrogated their responsibility by letting the Regulator set the industrys agenda.

Thats not good for market efficiency and its not good for consumers.5Business is BusinessAttracting and retaining talentBetter customer engagement; more reliable revenueBetter distributionBetter data / information / knowledge managementBrand building; brand leveragingIncreased differentiationProduct Innovation Mkt Growth; Mkt Share GrowthProcess Innovation improved efficiency and/or agilityRegulatory complianceResponding to aggressive 5 Forces competitionResponding to market disruptionSmarter stakeholder engagement

alangnewman @ yahoo.comALL businesses have a similar To Do List. The main question is which items on the list contribute most to creating value ?

Nobody complies their way to market leadership.6Time & Money

14.3bn169631m16 alangnewman @ yahoo.comThese numbers apply to a major UK insurer.

Its taken them more than 300 years to achieve a market cap of 14bn

That is not impressive7Time & Money

$ 14 bn1957Born1998Died1987 alangnewman @ yahoo.comI worked for this tech company between 1983 and 1988.

In this part of the economy things happened FAST.

This is the norm for todays economy.8What Business Are We In?

alangnewman @ yahoo.comThese companies all sell food. Are they all in the same business?

9What Business Are We In?

alangnewman @ yahoo.comAre Harley Davidson (top left) in the same business as Honda (top right)

Are they both in the motorcycle business?

Or is there a business 2 wheeled personal transport so that we can include scooters and bicycles.10What Business Are We In?

alangnewman @ yahoo.comIf you thought you were in the PROTECTION business think again.11What Business Are We In?

alangnewman @ yahoo.comAre BA and easyJet in the same business? Who is easyJets main competitor? Who is BAs main competitor?

What about Eurostar and Virgin trains. Are they in the same business? Why do you say Yes? Why do you say No?12What Business Are We In?

alangnewman @ yahoo.comAnd what about these Virgins different faces of one brand-driven business? Or different businesses?

Where is the vale created?13What Business Are We In?

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Hollywood studios thought they were in the movie business.Hollywood studios thought they were in the movie business so when VCR recorders came out they saw them as threats and spent millions on lawyers copyright lawsuits.

If theyd realised early on that they were in the entertainment business theyd have seen that Video Cassettes (and later on DVDs and downloads) extended product cycles and added great value to their catalogues.

14Complementors? Competitors?

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Do you see these folks as competitors or complementors? (The answer you give is based partly on what you see your business as being and what you think customers perceptions ?15To What Extent Is Digital Different?

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Here are some new boys on the block. Do you know who they are? Do you know what their significance is for your business?16To What Extent Is Digital Different?

alangnewman @ yahoo.comThese companies saw themselves as being in different business with maybe a bit of overlap here and there.17To What Extent Is Digital Different?

alangnewman @ yahoo.comBut theyve all been hammered by Apple AND APPLE WASNT EVEN AIMING AT THEM.18Between 2007 and 2014200720072009200920092012201220122014

20102010201020102010

20092014

alangnewman @ yahoo.comWhile youve been at your desk for the last 7 years heres a selection of products and companies whove arrived in the market.

Do you know all of them?

What is the significance of each to your business?19Business is BusinessA business is not defined by the products it sells but by the benefits customers pay for.Directors of a business arent the only people who define what business they are in changes in consumer behaviour, competitors, new entrants, substitution, and innovation all have a say.If we are not clear about what business we are in we will miss opportunities, misunderstand competitive threats and use resources in ways that do not create value.

alangnewman @ yahoo.comThree key messages20Scene Setter

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We know we knowWe know we dont know

We dont know we know We dont know we dont know Reminder21What Business Are We In ?A waste of time.What Business Are We In is business school nonsenseThe presentation was interesting up to a point but notthat important.A fair question. Weve a reasonable understanding but need to refine it.A good question. Timely because weve probably lost sight of the answer.My initial answer was good. No need to makeany changes.My initial answer needs a tweak.My initial answer needs serious revision.I now feel very unsettled.

alangnewman @ yahoo.comTwo ticks please22 In our factories we make lipsticks. In our shops we sell dreams. Charles Revlon

This comment by Charles Revlon sums it up well23alangnewman @ yahoo.com16 January 2015THANK YOU

And that, ladies and gentlemen, is why I wear lipstick.24