Reinvention

"...reinvention is essential in a business world being disrupted by artificial intelligence, renewable energy, machine learning, data analytics, cloud computing, internet of things, robotics and enhanced community expectations..."

Tony Boyd 2019a

There is only one company in the top 10 of the S&P index that was there 20 years ago. This is Microsoft, ie

"...number one in 1999 with a market cap of $US 604 billion and is now number one today with a market cap of US1 trillion......The S&P 500s second-largest company in 1999, General Electrics, still exists but it is a minnow compared to Microsoft and the other nine top stocks: Apple, Amazon, Google, Facebook, Berkshire Hathaway, Visa, JP Morgan, Johnson & Johnson and Walmart......GE which is 1/7 of its size 20 years ago, and grew on the back of aggressive expansion into financial services. But the global financial crisis left the company exposed...... its reinvention from a power equipment company to a diversified industrial and financial services organisation is a failure..."

Tony Boyd 2019a

Corporate reinvention usually involves reshaping the existing business or creating an entirely new one from scratch, by either acquisition or creating start-ups

There are 3 questions required in the strategic thinking about reinvention

"... Is the opportunity big? Is the market well served? Can we do something special or different?..."

Andy Jassy as quoted by Tony Boyd 2019a

Ideal answers to the 3 questions are yes, no and yes.

Some Australian examples are

- CBA relaunching its banking app and its investment in the Swedish payment buy-now, pay-later fin-tech (Klarna)

- CSL keeps building new business lines and expanding its product range into areas that disrupt old product lines

- Wesfarmers purchasing online retailer (Catch Group) which will help with the implementation of digital technology across the conglomerate's activities

- Blackwoods implementation of Microsoft Dynamics 365 into its wholesale industrial and safety business

- Telstra with its commitment to 5G technology

- Transurban is evolving into a data analytics company and linking itself with smart phones

- Medibank is changing from health insurer to healthcare company by using data analytics and its partnership with Nexus hospitals

- Qantas is using its frequent-flier business to help build associate businesses in lifestyle and health care

 

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