Not so long ago, a wise IIM professor told his young students that the competition for a product or service often comes from players in a completely different industry. And today we find the evidence of it everywhere around us. For instance most of us know that the biggest and the obvious competitor for Nokia is probably Sony Ericsson or Motorola, but one should not be surprised to learn that they are also a competition to brands that manufacture watches, alarm clocks, cameras, transistors and walkman.
Another example that is often discussed in many B schools, are the fate of Airline industry. While every Airline has one obvious competitor within the same industry it also has other competitors who are encroaching into its business. With many companies opting for tele-conferencing and video conferencing services, they save a lot on travel budget and it only makes more sense at the time of economic crisis. Who would have thought that the Airline industry will loose a substantial amount because of telecommunication companies like AT&T!
The same wise professor quoted another example that is something more closely related to common people like us. The Indian Bollywood league oops! Correction – the Indian Premier league that has brought together two completely different industries together. By exploiting the love for cricket in India, the franchise and the players make money, sponsors get their share of attention for their products or service and people get to watch the three hour entertainment. The boring aspects of cricket have been removed and its tailor made to suit a larger audience which would otherwise not be interested in a test cricket or a 50 over match. Now this kind of fusion of industries gives a win-win situation to all. Of course it also happens to attract too much attention from Income Tax dept.
Ok with all this said, what does this mean to us, the common folks? Well, to begin with, as consumers, our overall experience of using a product or service will constantly improve and we will get better value for money. Don’t be surprised if a proposal is made in distant future to install a chip in your head for credential purposes to allow a range of things like bank transaction, passport identification or even right to vote. As for companies that produces good and services, they will need to look out for competition in different industries and will need to constantly innovate and add value to their products or service to stay in business.