“One of these days, things are going to change!” How do you make sense of market disruption?

Things are going to change quoteJournal

Authors: Tore Strandvik, Maria Holmlund, and Ilkka Lähteenmäki
Journal and date: Business Horizons, Volume 61, Issue 3, May–June 2018


Dr. Michael Gunderson, Director and Professor


This paper addresses the ability of individual managers to deal with rapid change and how that influences the success of the firms for which they work. The authors introduce a tool that allows individuals and teams to self-diagnose their mindsets. Focused on two principal dimensions, strategic scope and focus, the tool also considers the offering, customer and market. The authors provide guidance for interpreting the results. In the article, the authors pose eight questions in the self-diagnosis tool. Once individuals have mapped their responses, there are nine strategic mindsets that managers can consider (see Figure 1).

What this means for Food and Agricultural Business

To outsiders, food and agriculture might not be an industry characterized by disruption. Industry insiders that I visit with at our Agricultural Retail Association and American Seed Trade Association management academies feel very differently. One can get whiplash keeping up with the many rapidly changing factors in food and agribusiness. There are changes in technology, personnel and talent, and internal processes. There is consolidation at every step of the value chain and dramatic changes in relationships among the larger more complex businesses that remain.

This article builds on a book Dr. Michael Boehlje has been extolling for years, Christensen’s The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Christensen and Boehlje warn established companies that continuing to do business the way it has always been done is a recipe for disaster into today’s markets. Incumbent firms will need to innovate or watch as upstart firms disrupt the market. This disruption has occurred in staid industries such as photographic film, computers, stock exchanges, and retailing. Increasingly, firms operating along the food value chain see upstart firms causing disruption. Sometimes this disruption even garners the attention of firms in Silicon Valley and fund managers at venture capital firms.

If we return to the figure of the nine strategic mindsets, I suspect many traditional agricultural managers would have a ‘transaction/company’ strategic mindset. The focus of the mindset is delivering products and services to similar customers. There is little differentiation and firms to no tailor solutions to individual customer’s needs. When every farm raised corn and soybeans on a section with similar equipment, this mindset worked well. It might even still work well near the food retail end of the value chain when McDonald’s handles supply chain functions for its franchisees.
As the industry has changed, however, more leaders of firms will need to adopt a relationship/customer view. As farms grow larger, retailers and input suppliers will need to transition into a relationship where value resides in customer-specific adjustments. A dairy nutritionist can no longer expect to share a standard ration across several 100-cow dairies. Instead, she must make specific adjustments based on the local feedstuffs the producer can access and the quality of the forages available. These types of relationships require more marketing and less selling.

Some leaders are even adopting a systems/interaction view. Here the firm co-creates wealth with customers over time. This mindset it valuable when the support solutions and platforms for interactions rapidly change. As the entire chain works to incorporate real-time data into decision-making, this mindset will allow creative leaders to move beyond providing solutions. Instead, the leaders will work with customers to improve the entire system. You see some examples of this as disruptive firms invite sophisticated farms onto advisory boards and R&D teams.

Have you already diagnosed your own mindset? Do you find one of the other six mindsets to be more prevalent or more important going forward? Email your thoughts, comments, and questions our way.

 Disruption Mindset Figure


Beyond Artificial Intelligence

Many companies are directing resources to data and analytics of all sorts. There has been much hype about smart platforms, products and connectivity that will advance value chains across the globe. However, despite the resources pouring into this area, a lot of companies, and entire value chains, have struggled to achieve any sort of transformation and value from these efforts. This article explores to what degree data analytics (artificial intelligence) could affect this transformation and what companies should do to drive value. The authors focus solely on “artificial intelligence”; however, for the purpose of this review, I am broadening the scope to all data analytics.

Challenger Marketing and Its Applicability in Agribusiness

The concept of challenger marketing lives between sales and marketing functions. Recently born from business practice, challenger marketing has been applied by leading companies in several different industries. Weng Marc Lim’s conceptual paper published in the recent Industrial Marketing Management journal explores challenger marketing, when and why it was created and how it can be applied.

Competitive Intelligence Embeddedness

Competitive intelligence helps firms to develop a competitive advantage when the entire organization and its networks commit to developing actionable insights. Once reached, this initiative acts as a capability by translating information into unique know-how. Therefore, it is proposed that competitive intelligence embeddedness (CIE) is a capability, defined as the extent to which competitive intelligence permeates the entire organization so that strategic and tactical decisions can be made in the knowledge of all relevant competitive information. This plays a key role in affecting organizational performance.