The Internet-driven market redesign
The good thing about corporations is that they are people (Thanks Mitt Romney]. Largely, demand drives markets as we joggle for price equilibrium. Beyond the stale economics word “needs”, agile firms are moving into Expectations and Perceptions because they have the elastic capacity to serve customers better. When those things are done brilliantly, industrial sectors would be affected because new bases of competitions are indirectly created.
Since Uber was invented, many things have happened in the automobile industry. It seems the carmakers have seen the trajectory: production of passenger cars would be degraded while trucks, utilities and commercial vehicles will be ramped up.
It makes sense, if Uber makes young people not to be buying cars, it does not make sense to be making them just to lose money. This is an industry redesign and it is consequential.
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By 2020, "almost 90 percent of the Ford portfolio in North America will be trucks, utilities and commercial vehicles," the press release says. "The company is also exploring new 'white space' vehicle silhouettes that combine the best attributes of cars and utilities, such as higher ride height, space and versatility." [..] And it's not just Ford. Fiat Chrysler did away with the Dodge Dart and Chrysler 200 more than a year ago. And General Motors decided to scale back production of the Chevy Cruze, Chevy Impala, Buick LaCrosse and the Cadillac ATS and CTS.
Uber and Lyft are triggering creative destruction in passenger car ownership. Until internet business gets to maturity, no one would even know the implications of what these companies can do to business sectors. As you hail Uber, you are causing products for Ford and Toyota. It is the same thing when you use AirBnB and hotel bleeds on cash.
No matter what you do, have awareness and plan ahead. Nothing can be spared as software “eats the world”. Uber is technically eating production lines in Ford, Chrysler and GM. Indeed, Ford, GM, Chrysler etc were all competitors. Unfortunately, they forgot the real competitors [Uber and Lyft] who are eliminating the need of owning cars!
Awareness is everything, not really about how much knowledge you have in a particular sector; just have awareness, and you will always be in tune with whatever comes up.
The basis of competition will continue to change, but only those with awareness would understand the movement, and then act accordingly.
