Take Advantage of Market Disruptions…Before It’s Too Late!

Take Advantage of Market Disruptions…Before It’s Too Late!

Market disrupters have a way of affecting your business, whether they are directly or indirectly associated to your industry. Often, when market disrupters arrive, business seem caught by surprise. They either scramble to compete with a “me too” product, or they continue to do business as usual which often has a negative impact on their profitability, culminating in closure. A good example of being “caught by surprise” was the market disrupter of Netflix. When it first arrived on the scene, it offered unlimited monthly movie rentals for a low subscription price. Phooey, said Video King, Blockbuster and the likes, and continued conducting business as usual. You know what happened to them, closed and video stores are outdated. Red Box is another story.  Their company model was to place kiosks for DVD rentals at high traffic locations, such as drug stores, grocery stores and convenience stores. This, in addition to their “dollar per day price” and “return anywhere” policies allowed Redbox to take advantage of the market disruption and continue to be successful today.  Netflix continues to disrupt the market by offering on-line streaming of movies and production of original content, still offered to consumers at reasonable, subscription prices.

Borders was another business that did not take advantage of market disruption, remember them. At the time, a market disrupter, Kindle, came out. The benefit of Kindle is that customers could purchase on-line eBooks and carry a whole library around on a small device. Borders did not attempt to compete.  Barnes and Nobles did, but were a little late to the game with their Nook eBook device. Borders is no longer in business and Barnes and Nobles is in the process of rethinking their market strategy to continue to be relevant in the industry. Previously they had started diversifying their product offering with the addition of board games and other gift items. Per their latest stockholder earnings report, they will be eliminating those items and will be piloting smaller, more intimate stores that will focus only on books. Barnes and Nobles believes there is still a market for a bookstore that is family friendly, with knowledgeable staff, and the ability to provide events for their customers.

Current market disrupters are Amazon Prime, Uber and Air BnB. When I meet with clients that are having difficulty competing in their market place I ask them two questions: 1. what are your customer’s pain points, and, 2. what disruptions are happening in your industry right now? If they cannot think of industry specific disrupters, I suggest looking outside the industry to see if they can take advantage of any ongoing market disrupters. For example, Air BnB and Uber, which are software platforms that make it easy for customers to access and use their services. How can an average service business, which as competition increases can only compete on price, take advantage of these disrupters? Perhaps a business can invest in building a platform to market, sell their services on-line. Then they can sub-contract out to their smaller competitors that meet their business standards. I can think of many commoditized service businesses that could take advantage of this model. Alternatively, alternatively, offering your product/service at a subscription price. Especially now, in the era of the “Sharing Economy”, millennial consumers are not as likely to purchase goods and services if they can rent them. How can your business take advantage of current market disruptions? My advice is to not only watch what your competitors are doing, but also be aware of rising trends in other industries that you can take advantage of.


Laura D. Katz, MBA, is the Area Director of The UGA SBDC – Athens Center; Ms. Katz is a national speaker on the topic of Business Development, Marketing, Agribusiness and Work/Life Balance. For more information on The University of Georgia Small Business Development Center, or to schedule a complimentary consulting session, contact: lkatz@georgiasbdc.dream.press or 706.542.7436.