Factor 04 in Platformization: Industry Position and Ecosystem Potential
Platformization provides an opportunity to tackle tough challenges that an industry is facing.
Vivaldi’s Platformization Potential Study is a forward-looking, comprehensive report that introduces the top S&P 500 companies such as Netflix, Pfizer, MGM Resorts, Nike, etc. with the most potential to capture exponential growth. We divided our analysis into two lenses: (1) the brand relationship between a company and its stakeholders and (2) how the company performs across the following five factors: The “Customer Centricity PLUS” Mindset, Value through Data and Analytics, Social Currency, Industry Position and Ecosystem Potential, and Agile Experimentation with New Technologies. Below we highlight the fourth factor.
FACTOR 04: Industry Position and Ecosystem Potential
A fourth factor is a company’s position in the industry and its potential to orchestrate an ecosystem. To do so requires companies to have a certain position in an industry, and it requires them to have a systems perspective. One cannot do it alone.
For example, Tesla isn’t the largest car company, but it successfully leads the industry in finding solutions for replacing internal combustion engines. It also coordinates a broad network of participants, such as Panasonic for its critical battery supply. Even the government contributed $465 million to its vision.
Industry leadership is important because it gives companies the permission to solve industry challenges. Some companies choose to assume this leadership position while others don’t. Nike and Adidas lead the athletic shoe category, yet there are many other brands that have become billion-dollar businesses without assuming industry leadership. Skechers is now a business with revenues of more than $4 billion. While it remains a respectable competitor, Skechers does not lead in innovation or any major category drivers that could solve industry challenges.
Another example is German industrial metals trader, Kloeckner. In terms of revenues or market share, Kloeckner is small relative to the large steel companies like Tata Steel, ArcelorMittal, Salzgitter, or thyssenkrupp. The entire steel industry operates in a traditional way, with most business still done via phone and fax. However, Kloeckner has assumed leadership through the digitalization of the industry. On its website, Kloeckner declares: “The future of steel is here: driving the metals industry forward through digital transformation.” The company stepped into this role in 2013 and is now credited for significant advances and contributions in solving major industry challenges such as inefficiencies in inventory management, while increasing its own revenues and sales.
Explore the full study here for action-oriented strategies that can help businesses build better and stronger brands for today’s consumers.