BFM2013_4_09_Business side-effects

Different industries received additional impacts by disclosure regulations, like ISO9000, EN14000, Basel II, etc.

Sometimes these regulation are self-inflicted by industry, as a way to remove the threat of new, more consumer-oriented legislation, but the overall effect is the same: if your company is certified or not, this is visible; and if your company accounts are subject to compulsory auditing, some information that smaller companies would not disclose is available online.

The transparency trend embedded in e-government has an interesting side-effect: as more and more of your strategy-related information has to be disclosed, and becomes easy to access and compare automatically, the capabilities and approaches used to implement the strategy are what make your company unique.

New business approaches will be needed, and cost will increasingly become only a short-term competitive advantage, offset by the increased productivity that companies using your business approach later will have by using your company as a case study, and maybe setting up their facilities where they can have a short-term cost-advantage, useful until they get enough market share from you, and can afford to enter your own market with local facilities.

As an example, if you are a shipyard with a new production management approach, obviously the initial infrastructures and cost of production would make a difference and you will have some time before your competitors will catch up.

Eventually, your cost advantage would disappear, as competitors would benefit by a shorter start-up time, avoiding part of the “tuning” costs that you sustained.

If you created a new market, then your competitors will not need all the initial marketing investment required to “evangelize” the market.