Self-disrupt or self-destruct

Analysis

Future of consumer business

Self-disrupt or self-destruct

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CEOs of all major consumer product companies face the twin challenges of responding to the disruptive innovation threat in their traditional businesses, while simultaneously harnessing these same forces to create the businesses of tomorrow. The magnitude of the challenge means CEOs need to consider M&A as a strategic enabler to capture innovation-led growth.

We take a deeper look at some of the challenges and examine how companies are using M&A strategically to win the battle for the consumer.

Key findings of the report:

  • From “owning the aisle” to “owning the consumer”. The digital revolution has transformed the world and data is the new battleground. This paradigm gives a significant advantage to asset-light, digitally native start-up brands that are using consumer data as the basis of competition and bypassing the traditional advantages of scale and scope. As a result, well-established companies now face the risk of decreasing customer loyalty, shortened product life-cycles and erosion of market share.
  • Unbundling the business model. The disruptive potential of the new technologies are amplified by shifts in consumer behaviour. Challenger start-ups can build profitable businesses that were simply not possible a few years ago and this is eating into the core markets of established consumer product companies. Combined, these disruptive shifts are lowering the barriers to entry for product development, cutting the cost of demand fulfilment and allowing the proliferation of direct-to-consumer product channels.
  • The promise of cross sector convergence. The advances in digital and analytics technologies are reshaping how products and services are developed, delivered and consumed. Consumer product companies are now facing non-traditional competitors who strategically acquire technologies to create new consumer product offerings and in the process are reshaping the competition.
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