"The Evolution of Strategy: From Google to the Shark-Fin Effect"

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Glasp

Sep 10, 20234 min read

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"The Evolution of Strategy: From Google to the Shark-Fin Effect"

In today's rapidly changing digital landscape, companies must constantly adapt and evolve their strategies to stay competitive. Two key concepts that highlight the challenges and opportunities of this new era are Google's approach to strategy and the Shark-Fin Effect, an alternative model for technological adoption. By examining these two perspectives, we can gain valuable insights into the evolving nature of business in the digital age.

Google, a horizontal company, has always relied on its massive user base and advertising revenue to drive profitability. Unlike Apple, which focuses on creating a differentiated experience and selling high-margin devices, Google's success lies in its ability to reach as many users as possible. However, this approach has its limitations. When Google made the decision to prioritize Android by making turn-by-turn directions exclusive to the platform, it inadvertently allowed competitors to claim the default mapping experience for millions of potential Google users. This had significant implications for the company, as it meant losing out on valuable user data and the potential for advertising revenue.

This example highlights the importance of considering the long-term implications of strategic decisions. While Google's focus on market share and advertising may have been successful in the past, the rise of voice interaction and artificial intelligence presents new challenges. Google Assistant, for example, faces a go-to-market gap due to its limited availability on iOS devices. Additionally, the company must find a way to incorporate advertising into these new interaction points, as traditional ads become less effective. To address these challenges, Google is taking a page out of Apple's book by developing its own hardware and creating a differentiated experience with the Pixel phone. This shift in strategy reflects the changing landscape of technology and the need for companies to adapt to new paradigms.

The Shark-Fin Effect, proposed as an alternative model for technological adoption, presents a different perspective on strategy. Rather than assuming a smooth diffusion of technology, this model recognizes the disruptive nature of digital products and the rapid pace at which they can rise and fall. The process is divided into four phases: try & learn, big bang, big crunch, and dismissal. In the try & learn phase, companies collaborate with accelerators and external consultants to identify market-changing solutions. Once a potential solution is found, the big bang phase begins, characterized by exponential growth and the potential for market dominance. However, this phase is also precarious, as a new disruptive product can quickly replace the incumbent. This is represented by the big crunch phase, where alternative solutions are rapidly dismissed in favor of the new disruptor. The dismissal phase can be just as quick as the adoption phase, emphasizing the need for companies to constantly adapt and stay ahead of the competition.

To achieve long-term success in this disruptive environment, companies must focus on four key principles: convergence, simplification, immersion, and diversification. Convergence refers to the ability to offer a platform that meets all customer needs, while simplification ensures a seamless and obstacle-free user experience. Immersion is about creating an emotional connection with the platform, making users feel like they can't live without it. Finally, diversification allows different types of customers to use the platform for different reasons. By following these principles, companies can increase their chances of success in the ever-changing digital landscape.

In conclusion, the evolution of strategy in the digital age requires companies to be adaptable and forward-thinking. Google's shift towards hardware and a differentiated experience with the Pixel phone reflects the changing dynamics of the market, while the Shark-Fin Effect highlights the rapid rise and fall of disruptive technologies. To navigate this new landscape, companies must focus on convergence, simplification, immersion, and diversification. By incorporating these principles into their strategies, companies can increase their chances of long-term success in an increasingly competitive digital world.

Three actionable advice:

  • 1. Embrace change and be willing to adapt: The digital landscape is constantly evolving, and companies must be willing to change their strategies to stay competitive. This may involve shifting focus, exploring new markets, or investing in new technologies.
  • 2. Prioritize user experience: In a world where customers have more choices than ever before, providing a seamless and immersive user experience is crucial. Simplify processes, remove obstacles, and create an emotional connection with your platform to keep users engaged and loyal.
  • 3. Foster a culture of innovation: To thrive in the digital age, companies must embrace a culture of innovation and experimentation. Encourage employees to think creatively, take risks, and explore new ideas. This will help your company stay ahead of the curve and seize new opportunities as they arise.

Resource:

  1. "Google and the Limits of Strategy", https://stratechery.com/2016/google-and-the-limits-of-strategy/ (Glasp)
  2. "The Shark-Fin Effect: the Alternative Adoption Process for Digital Disruptive Products", https://bsdigitalconsulting.wordpress.com/2018/03/15/the-shark-fin-effect-the-alternative-adoption-process-for-digital-disruptive-products/ (Glasp)

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