Monopolies & Tech Giants: Insights You Need from Harvard Business Review
Various Contributors
Harvard Business Review Press (April 2020)
How those threatened by tech “giants” can compete with them in a VUCA marketplace
This is one of the first volumes in a new series published by Harvard Business Review Press. Each offers dozens of cutting-edge insights within a business field of greatest importance now when the global marketplace today is more volatile, more uncertain, more complex, and more ambiguous than at any prior time that I can recall. In this instance, the field is competition with monopolies and tech giants.
Each volume anthologizes HBR articles that are among the most relevant and of greatest value. Following a superb Introduction by the HBR editors, there are eleven articles in this volume that focus on how to compete against world-dominating “giants” such as Apple, Amazon, Facebook, Google, and Microsoft. In terms of value, if all eleven were purchased separately as reprints, the total cost would be about $100. Amazon now sells a paperbpund edition for only $18.16. That’s better than a bargain. That’s a steal.
What specifically do the contributors discuss?
o Marco Iansiti and Karim R. Lakhani share their thoughts about how to compete in a “hub” economy dominated by the few aforementioned superpowers
o David Wessel explains why those those superpowers are attracting increasing scrutiny as well as accusations of crushing competition.
o Maurice E. Stucke views tech giants as “data-opolies” that control platforms that attract users, sellers, advertisers, software developers, apps, and accessory makers to their ecosystems. That’s a “bad idea” for their competitors. Stucke adds, “Data-opolies can also fail to disclose what data they collect and [begin italics] how [end italics] they will use the data. They face little competitive pressure to change their opaque privacy policies.”
o According to William A. Galston and Clara Hendrickson “Market consolidation is on the rise, bringing with it several negative economic consequences. It is exacerbating income inequality among consumers and increasing, wage disparities among workers, further widening between-firm inequality.”
o Dipayan Ghosh acknowledges that Facebook is a natural monopoly, “so regulate it accordingly” rather than splitting it up. “What the U.S. government should in fact pursue are the overreaches of a business model that has negative externalities in our media and information ecosystem.”
o Larry Downes explains how more — and more severe — regulation of the tech giants “could backfire.” He prefers rules that are more innovative. Currently, there’s no framework for preemptively regulating nascent industries and potential new technologies.
o According to Darrell K. Rigby, “Amazon’s acquisition of Whole Foods Market showed that tech giants can enter and reshape nearly any industry without warning. How can retailers compete?” He offers several practical suggestions for careful consideration..
o Howard Yu asserts that large consumer packaged goods (CPG) companies like P&G are losing market share to new entrants, “They are challenged by an overreliance on traditional retailers and an inability to create direct relationships with consumers at a time when e-commerce is exploding.” He cites lessons to be learned from Xiaomi about how to compete in a digital economy. “To thrive among the giants,” however, “smaller companies should think hard about trade-offs, differentiation, and deciding what they [begin italics] won’t [end italics] be.”
o Julian Birkinshaw, Walter Frick, Denise Lee Yohn, and Michael Jacobides suggest four approaches when crafting a strategy in the “Age of Giants.”
o Vijay Govindarajan asks, “Who will win the industrial internet?” He thinks Amazon will be the probable winner because it has already fused physical with digital. However, others can also be successful. He examines three barriers that digital natives must overcome if they are to be leaders. Industrial giants need to overcome three different barriers. VUCA describes the current and imminent marketplace. “One factor that will favor digital companies in the industrial internet is the technological and scientific breakthroughs that level the playing field for newcomers.”
o Amit Sharma shares what grocery stores have learned from competition with Amazon: creating what Jackie Huba and Ben McConnell have characterized as “customer evangelists”
Perhaps the best way to look at a book such as this one is to pretend that you and your business associates are struggling (without much success) to compete with tech mega-firms from around the world. They are encroaching on your industry’s space, rewriting the rules, and scooping up talent — and your customers. Obviously, you cannot retain a team of cutting-edge thinkers in this field to address key issues. However, most of what you need — information, insights, and counsel — is provided in this 153-page operations manual.
Keep in mind: you can purchase a copy of the softbound edition from Amazon for only $18.16.