Major firms learning to adapt in fight against start-ups - IBM

From Reuters - February 25, 2018

BARCELONA (Reuters) - Major corporations are learning to defend against start-ups that threaten their business models, hitting back by adopting the disruptors playbook, according to a survey of top executives by computer services firm IBM.

The proportion of executives who thought competitors were set to flood into their industry has halved from 54 percent to 26 percent compared to two years ago, the broad-based poll of business decision-makers showed.

Theres been a feeling historically that the elephants cant dance, the incumbents will find it hard to respond and that everyone will be Uber-ed or Airbnb-ed out of existence,Mark Foster, senior vice president of IBM Global Business Services, told Reuters in an interview.

But what we are seeing is actually there is a limit as to how far that can go.

While some sectors had been hugely disrupted by new digital entrants and some intermediaries pushed out, many of those changes were now being led by existing industry players, he said.

Disruption is a catch-all term for the use of digital technology to up-end existing business models, for example Ubers impact on the taxi industry by using smartphones to connect riders with drivers, and pricing according to demand.

But just 27 percent of the executives surveyed said they were experiencing significant disruption, an unexpected finding given the deluge many predicted, IBM said. Only 23 percent said the big drivers of change were from outside their industries.

Digital giants, like Google, Apple and Facebook, continued to concentrate their power in some industries, but according to the executives surveyed they were not leading the disruption, and start-ups were increasingly quiescent, the survey found.


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