|The New Competitive Paradigm
A new global competitive paradigm is challenging the status quo
A new global economic paradigm is taking shape, triggering a broad and fundamental shift in the underlying competitive dynamics of local and global businesses. This catalytic transformation is changing the rules of the competitive game for businesses – regardless of their size, the industry in which they operate, and the country in which they are located. Companies can no longer seek protection in the traditional positions they have built in their domestic markets. In the new global economic paradigm everything is up for grabs.
The rapid expansion of offshoring and the corresponding rise of India to a world class global services and value cluster within the course of just one decade, show that the very nature of globalization is changing too. The slow and bureaucratic way of globalizing belongs to a bygone era. Today, a formidable mix of powerful macro- and micro-level forces including – deregulation, new technologies and the internet, the free flow of capital and ideas, and a new cadre of globally minded entrepreneurs with the intent to disrupt traditional markets – are together creating a fast paced and rapidly changing global competitive environment that is challenging the status quo.
Companies face complex strategic and operational challenges
In many industries traditional firms in Europe and the USA now face powerful new challengers from India and other emerging markets. These challengers are leveraging large highly qualified talent pools, low operating costs and operating model innovations to bring into play a new system of assets that is difficult for many incumbent firms to emulate. Many firms have been caught off-guard by the rapid pace at which these challengers have expanded and encroached their business.
Tactical cost cutting and conventional efficiency improvement initiatives will not solve the competitive dilemma many companies face. As the rules of the game change, companies must develop a broad and complex mix of new strategic and operational initiatives that cut across corporate functions, build new capabilities and perspectives, and most importantly, deliver more client value. In short, many companies have to recalibrate their executive mindsets and rethink their business strategy, alliances, market positioning, value proposition as well as their operating and business models.
Moreover, strategies for winning in this new environment come with significant implications for the soft factors of a successful business requiring new forms of global leadership, governance, organizational culture, and team management. Managing large culturally diverse organizations across distance and time in an integrated way calls for a more sophisticated, entrepreneurially oriented, and nimble set of managers. That is, a new kind of global mindset and mix of capabilities are required to win in the new global competitive paradigm.