HARNESSING GLOBAL SHIFT
Guidance from Wharton Business School for navigating global changes
Recognizing global shifts is an essential task for leaders across industries. Through our research at Wharton Business School and direct collaborations with businesses, we've found that while many leaders are adept at acknowledging the obvious implications of global shifts, they often miss the subtle ways these shifts alter consumer perceptions and behaviors. Especially, shifts considered irrelevant to their primary markets are often overlooked.
Many leaders disregard global shifts when strategizing, opting for a cautious approach and letting competitors take the initiative. This reactive stance can, at best, lead to lost revenue opportunities, and at worst, risk the entire business by allowing competitors the chance to redefine the industry. This piece aims to motivate leaders to think more deeply about how global shifts can create fresh value propositions for their primary markets. Moreover, we aim to give insights on enhancing market research and product development teams' proficiency in understanding and leveraging global shifts.
One method we call 'blend and enhance' is about developing a product or service that retains its core features but also incorporates elements responsive to a significant global shift. Take the example of "Aria Watches," a company that responded to the rise of global health consciousness. Instead of creating just another fitness tracker, Aria combined its luxury watch design with health monitoring features. Instead of competing on price or basic features, they understood the consumer's desire for a blend of luxury and health and offered a product that catered to both.
Another illustration is the initiative by global grocery chain, "NaturaMart," in response to the growing trend of sustainable living. NaturaMart introduced the "EcoSmart" initiative, allowing customers to earn points for eco-friendly activities like using refill stations, purchasing locally sourced products, and more. These points could later be redeemed for discounts. NaturaMart did not revamp its entire business model but integrated this initiative, adding a sustainable touch to its value proposition.
An innovative strategy is 'merge and evolve'. This involves integrating a product's core value with elements addressing a global shift, potentially positioning the company in a new market segment. At first, integrating features from an unrelated global shift into one's primary offerings might seem futile. However, consider the shift "TechTrek" made by introducing augmented reality (AR) into its hiking gear. Partnering with an AR company, they incorporated an AR experience that overlays real-time information on terrains, weather, and trails. By merging TechTrek's commitment to outdoor activities with the digital revolution, the company created a whole new level of customer engagement.
A distinct approach, termed 'resist and emphasize', revolves around creating products or services that accentuate the traditional values of a category, providing consumers an option to resist certain effects of global shifts they find unfavorable. A fitting example is "RetroRead," a digital e-reader introduced by "NovelTech." While offering digital conveniences, RetroRead’s design and interface mimic the tactile sensation of flipping through pages, allowing readers a nostalgic feel. This device caters to readers' increasing inclination towards digital mediums while countering the digital detachment from the physicality of reading.
After understanding how global shift-related changes in consumer perceptions and behaviors influence your category, you can determine which of our proposed strategies suits you best. If the basic proposition of your category still resonates with the shift-impacted consumers, the blend-and-enhance strategy could rejuvenate the category. If there's a growing disparity between your category and the new consumer focus due to the global shift, your innovations should bridge and evolve the category. However, if certain aspects of the category contradict the effects of a shift, there's potential in resisting those effects by emphasizing the traditional values of the category.
In conclusion, global shifts - be they technological, socio-economic, environmental, or political - that modify people's worldview and expectations from products and services can pave avenues for business expansion and growth.
