Traditional boundaries between companies are disappearing, creating an unprecedented fusion of new business models. Consider what new collaborations and opportunities could be in store for your organisation.
WITH ecosystems becoming the norm across industries, it has never been easier for companies to enter areas outside their domains. There are likely a couple of reasons for this: First, the rise of cloud data and connected technologies has led to a large number of interactive platforms which have brought once-isolated industries together to solve customer needs holistically. Second, our collective ability to access external resources through the gig economy has made new categories of cross-industry talent accessible to companies. To put it simply, traditional boundaries between industries are disappearing, signalling a great fusion of once disparate industries (see sidebar, “Fusion 101” for more information). Consequently, brands are transcending from being isolated entities to becoming members of far-reaching ecosystems.
Many companies, even those that are leaders in their industry, are being compelled by this wave of fusion to find new ways of establishing themselves in these much broader ecosystems—or risk being disrupted by new competition. Many leading brands are now asking themselves: “What business are we in and how do we move outside the conventional construct and redefine who we are?”
While fusion may be new territory for some, the idea that businesses should expand their scope to find growth opportunities and fend off competition has existed for decades. As far back as 1960, Harvard Business School professor Theodore Levitt cautioned businesses on the dangers of narrow thinking.1 In his seminal article, “Marketing myopia,” Levitt takes the reader through a litany of examples in which companies were hurt by focusing primarily on product superiority. For instance, the railway industry was overtaken by automobiles and planes because it didn’t acknowledge it was in the transportation business; the film industry didn’t know it was actually in the entertainment business and, therefore, was quickly outpaced by television; and corner grocery chains didn’t see the value of one-stop supermarkets—even if the customer had to travel a little further. In each case, company executives missed the point: They were focussing too narrowly on what they did and not on what the customers they were serving needed.
Fusion denotes the erasure of boundaries between traditionally distinct industries, enabled by companies’ newfound abilities to access technology and talent that spreads across boundaries. It requires businesses to move beyond industry silos and recognise they are operating within broad ecosystems, requiring a rethinking of capabilities, brand, partnerships and its entire existence. Businesses embracing this convergence, or fusion, are capitalising on symbiotic relationships by reconsidering:
In the 60 years since Levitt’s article was published, fusion has only amplified in impact. Earlier, businesses risked being disrupted because they were too focussed on the product rather than the customer. Now, as technology rapidly erodes traditional barriers to entry, companies that do not fully comprehend the value of participating in ecosystems will likely remain more susceptible to disruption by those other than their usual industry competitors.
Indeed, there is a monumental shift underway in how businesses operate—and, in many cases, how they perceive themselves. Many of the businesses that succeed in this climate are taking an unconstrained view of how they serve customers and are rightly breaking out of their traditional industry silos. This typically includes engaging with new partners in the ecosystem, sharing data with many of these partners and working with different types of talent who often operate outside the four walls of the organisation. Promisingly, businesses that ambitiously solve unmet needs through fusion with smart, open ecosystems can systematically displace competitors who are unwilling (or unaware) to do the same.
Companies are putting fusion to work in innovative ways—from embedding it in their business models to partnering with cross-industry peers in their ecosystems to deliver value to stakeholders. Here are two examples that illustrate the power of fusion:
We are seeing the effects of fusion across multiple ecosystems. Messaging platforms such as WeChat are becoming mobile payment and ridesharing platforms; department stores are opening their doors to e-commerce giants and fitness centres to provide more cross-industry wellness services; and automotive companies are turning into ridesharing and micromobility providers. In each case, they’re looking beyond industry boundaries to address customer needs, identify growth opportunities and areas for collaboration and create new value for customers. Fusion is making brands relevant outside of their industries of origin.
At face value, operating in times of fusion may seem like a daunting task. After all, how does one take an unconstrained view on serving people?
The complexity of the task doesn’t mean organisations are unequipped to navigate the fusion wave. It’s simply about leveraging your current assets to expand the scope of who you are serving and why. Specifically, businesses can use their existing assets to identify opportunities where partnerships can create new experiences within relevant ecosystems or continue providing existing experiences but at greater convenience.
This can start with understanding the areas in which your company has capabilities to serve unmet needs, along with the opportunity to partner with others across the ecosystem to holistically serve them. Here’s how marketers can function effectively in the fusion era by redirecting the valuable assets they most likely already have:
By repositioning core company assets to better navigate the fusion wave, marketers can thus develop solutions with a longer-term, more effective view of addressing human needs—with some help from carefully chosen partners.
Levitt’s “Marketing myopia” aptly demonstrated the importance of expanding a brand’s perspective beyond what it does today. In the era of fusion, this can mean looking beyond industry boundaries and finding new ways to serve customer needs, uncover disruptive threats and partner with those who may have once been viewed as the competition. It’s all about asking yourself, “What business are we in?” The answer will guide businesses in navigating the world of fusion, enabling them to define themselves to all stakeholders and building new and necessary capabilities to extend their work across broader ecosystems.
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