Majority of large companies face high levels of industry disruption

Around two-thirds of the world’s largest companies face high levels of industry disruption, with almost half already showing severe signs of future susceptibility.

 

Tuesday 27

Majority of large companies face high levels of industry disruption

That is according to new research from consultancy firm Accenture, which studied the presence and market penetration of disruptor companies in various different sectors.

 

It was found that the insurance and healthcare industries are in a ‘vulnerability stage’ of disruption, with structural weaknesses exposing them to significant risk.

 

However, barriers to entry currently inhibit disruptor companies in these markets, with incumbents being urged to position themselves so they can develop and leverage future innovations.

 

This will involve these firms improving the productivity of their legacy businesses, and shifting dependence on fixed assets to monetising underused assets.

 

“Disruption is continual and inevitable, but it’s also predictable,” Accenture’s chief strategy officer, Omar Abbosh, said.

 

“Business leaders need to determine where their company is positioned in this disruption landscape and the likely speed of change.”

 

The research involved a study of 3,600 firms with at least $100m (£72m) in annual revenues across 82 countries, analysing incumbents’ financial performance, operational efficiency and commitment to innovation.

 

Around 19% of companies fall into a ‘durability stage’ where disruption is not life threatening, and another 19% are in the vulnerability state, while a quarter are categorised in a ‘volatility stage’ where disruption is prominent.

 

However, it was found that 37% of the world’s largest businesses are in a ‘viability stage’ of constant disruption, where competitive advantages are short-lived, and include high tech and telecommunication firms.

 

The four periods of industry disruption are shown below:

Source: Accenture

Source: Accenture

 

“We found that the lower an industry’s digital performance, the more susceptible it is to future disruption” Accenture Digital group chief executive, Mike Sutcliff, said.

 

“Digital technologies can help make a company more resilient in times of disruption, driving better outcomes from existing products, developing entirely new digital services, lowering costs, or increasing barriers to entry.”

 

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