Many years ago an academic I once knew, said to me: “modern businesses need to be like fighter aircraft, unstable in flight to enable them to manoeuvre and change direction quickly.” This man, as well as being an academic, also had some substantial real-world business experience and what he said has always stuck in my mind.
Some twenty years ago Porter published his theory of ‘Value Chain Fragmentation’. Most of the articles on this subject are highly academic, so I’ll try and put this in simple terms, academics can never explain simple things simply.
Porter suggested, and quite rightly as it turned out, that business would become so competitive, the need for efficiency so great that any business process that they could not excel at they would have to either contract out or form partnerships with others that could better perform these functions. Information Technology has been a great enabler of this fragmentation process.
Now twenty years later, this fragmentation is happening. Even products carrying British brand names may only be designed in Britain, assembled overseas, using components manufactured all over the world. Linking all of these activities of course are modern Information Systems.
One man ahead of his time in this respect was Richard Branson and Virgin. Branson developed his brand ‘Virgin’ to initially sell records, but later progressing it into a trusted name that could sell anything, from phones, financial services to space travel.
Branson’s core competency was marketing and core competencies are key to this. In a fragmented business environment it is essential to concentrate on core competencies. Branson used his brand to form strategic partnerships to sell other products, mostly using his partners money. His other competency was managing his business risks.
In an internet, information driven world that has given consumers an endless choice of rapidly evolving and newly developed products, leading to a highly price-sensitive marketplace, agility is everything.
In such a highly dynamic marketplace, lucrative market segments appear and disappear in a very short space of time. Market opportunities have to be exploited quickly before moving on, business partnerships formed and dissolved, business units formed, bought and sold at an ever increasing rate. This is an extreme and increasingly dynamic, now cloud driven, business environment.
In recent years we’ve moved a long way from the lofty, vertically orientated, archaic, multi-departmental business monoliths of yesteryear. There may be some left but if they are to survive, they’ll have to rethink and restructure.
I’m talking about the old businesses that many still wish to return to, changing little from year to year, making and selling the same products year in year out with lots of job security. This isn’t possible. These old business entities, apart from having trusted brand names, belong in a long-gone era, an era that includes other monoliths, for instance, the EU.
How could it ever be in our interests to remain tied to a monolith like the EU in a modern, increasingly dynamic global marketplace: it simply is not.
The EU has always been a politically driven rather than a sound, economically driven construct, particularly in regard to its currency, the Euro. The EU has its roots in, call it what you will, Socialism, Communism with perhaps a touch of Fascism. All of these regimes in the past have tried to use Totalitarianism.
I couldn’t care less what you call the EU, but it will never work in sound economic terms. Germany has benefited from the adoption of the Euro to keep its goods and services priced at artificial lows, creating massive trade imbalances and just about breaking every other country in Europe, the North-South divide being particularly pronounced.
It can be seen then that the all too cosy blend of politics and business interests that is the EU was only ever going to benefit a small minority. The EU will never work for the majority in today’s highly competitive and dynamic business world. As the EU’s phony economy and currency break down, like similar regimes before, it will have to resort to totalitarian control to prevent its break-up.
The EU is now striving for a European Army and we can see why. At its best, the EU is a dead weight on our backs, at its worst a dangerous totalitarian dictatorship in the making, but certainly it will be a disaster for the majority of British people.
Oddly enough, Richard Branson whom I mention above is a staunch globalist and fan of the EU and maybe I’ll write about this in due course. It’s a shame though because his business career makes for a very interesting case study.
The British people were wiser than they ever realised when they voted to leave the European Union. Project Fear was a pack of lies designed to protect the interests of a select few that just can’t compete in the modern business world.
The modern business and economic world may be highly competitive and dynamic, requiring the agility of a gymnast, but we’re better off learning to play the game and be free to exploit opportunities and form strategic partnerships as we see fit.
In my last article ‘The wrong direction’ I talked about events in China, Russia and Asia generally. I may have to update that soon as things are moving on apace.
We in the UK need a democratic government that represents the people and that isn’t our current government or any LibLabCon government of I don’t know how many decades, they represent a small minority and their beloved European Union. The European Union will lead us into perdition and that will be the sum total of all of the efforts of the LibLabCon.
Where is UKIP in all of this?