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Commercial power: who will own the interface?

May 13, 2015

Traditional sources of business value are under sustained attack, with current models often protected only by a flimsy regulatory environment.

As supply chains transform, commercial power and influence is shifting dramatically within industries, between industries and in many cases to start-ups with virtually no assets. Within 5 years, who will control your markets?

Consider for a moment how the early emergence of online retailers has led to mass aggregators of ecommerce such as Amazon, Alibaba and eBay. Companies such as Uber and airbnb are disrupting traditional value networks for transportation and hospitality. It is widely expected that power in markets for energy and water will steadily switch from utilities to service aggregators. And even in a highly profitable field such as pharmaceuticals, digital technologies will drive fundamental change in drug delivery.

The combination of networked technology and digitalization will continue to generate enormous change in product and service design and delivery. In long-established industries such as oil and gas and pharmaceuticals, top executives have already grasped that their key partners for the future are not those within their industry, but outside. They are forming new alliances and partnerships. They are shifting their attitudes on fundamental issues such as IP ownership or the use of power.

A common theme in all of this is that success increasingly depends on an organization’s ability to structure and manage complex (and shifting) networks of relationships. It is commercial acumen that lies at the heart of today’s winning business – and devising and executing the right forms of contract to define and hold those networks together.

 

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