24 February 2023
Study probes plans to fend off rivals.
By Scott Morrison
Roughly one-third of North American technology and telecommunications companies have taken steps to ensure they would remain competitive in the face of new technologies and the intensifying threat from low-cost Asian manufacturers, according to a study to be released today.
The low level of preparedness was contrasted by a high degree of awareness that competitive pressures were set to dramatically increase, said the study by A.T. Kearney, a management consultancy. The study, based on surveys of 300 high-level executives in the technology and telecommunications industries, found that 90 per cent of respondents expected competition in their sector to increase in the years ahead.
But only one-third said their companies had a formal process by which they could assess their position. More than half said they measured their competitive strategies through “informal discussions as part of business meetings”. The report warned that many North American technology and telecommunications groups were in danger of moving too slowly to adapt to three fundamental changes within their industries.
these included a sharp growth in business-to-consumer technology sales. The study also pointed to the emergence of mega-markets in China and
Indiathat provide a base from which low-cost competitors could expand internationally. Thirdly, emerging technologies have helped blur the traditional lines between industries, and created cross-over competition among companies that were once in different markets.
A.T. Kearney pointed to a handful of top-tier technology groups that have actively responded to these challenges. For example, Dell, the world’s leading PC maker, may not widely be considered an innovator but it has taken its direct sales model straight to consumers.
IBM recently sold its PC unit to China’s Lenovo Group, a deal that gave IBM tremendous access to the Chinese market. Cisco Systems, the networking equipment maker, has moved aggressively into new markets.
“This is the time to establish your beachhead. If you miss the wave now, you will miss your opportunity to play in these new markets,” said John Ciacchella, vice-president in A.T. Kearney’s high-tech practice.
However, these corporations were seen as exceptions.
Most North American companies remained too focused on shoring up their core markets.