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Millennium Message

Jan 7, 2000 10:45 AM   By Martin Rapaport
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By Martin Rapaport

And so we’ve made it. The dawn of the new millennium, a new era. For some of us, particularly the young, it doesn’t seem like such a big deal. After all the young own the new millennium. It will be their world and they take it for granted. For others, the elders among us, living through to experience the new millennium is an accomplishment. Finally, there are the folks like me, middle-aged baby boomers. We are in the prime of our lives as we straddle the old world and the new. We have experience with the old way of doing things and are challenged, if not terrified, by the new way of doing things. We know that we must adapt to the rapidly changing environment. We must find ways to reinvent ourselves if we are to compete and be successful in the future. For us surviving the past is not good enough we must make the future.

While it is quite natural for everyone to have their own perception of the future based on their individual perspective, the facts on the ground are the same for all of us. It is obvious that our world is rapidly moving into a new technological era. The information revolution, a leading indicator of the new world order, is but a first taste of what is yet to come. The turn of the millennium is but a convenient milestone that separates the old world from the new. One thing is abundantly clear: The road ahead will be very vastly different than the road behind us.

The Road Ahead

The most frightening thing about the road ahead is that the combination of technology, information and financial revolutions will have an incredible impact on competition and profit margins in the marketplace. New technology is being developed that will continually enhance and lower the cost of presenting products to consumers. The effective cost of e-tailing is dropping as fast as the price of computers while the quality of on-line presentation, electronic customer service and overnight delivery is improving exponentially. Business-to-business (B2B) market models that challenge the old ways of trading and merchandising products are also beginning to emerge. Analysts predict that B2B models will have an even greater impact on markets than business-to-consumer (B2C) models. While the short-term focus is on how technology is improving the internet, the long term implications go well beyond the internet. We can and should expect technology to have a major impact on the future of wholesale and retail markets. These changes will undoubtedly lower transaction costs, increase market efficiency, and increase competition.

The future impact of the information revolution on markets is already plain to see. Almost anyone anywhere in the world can access the latest price and availability information. The handwriting is on the wall. Transaction based profit margins will be almost completely value-added driven with very little margin based on lack of consumer price information. Furthermore, the advanced information systems of the future will create increasingly efficient and competitive markets.

Perhaps the most startling development of all has been the recent revolution in the equity markets. Internet firms are being capitalized with staggering amounts of money that enable them to hire the best people and utilize the best marketing technology. In effect the financial markets are betting against the traditional way of doing business. The people with money are betting on a future where new firms swallow up industries putting out to pasture the firms that do not change fast enough. How does a traditional firm compete against an internet newcomer with unlimited financial resources? How does a firm protect their market share? What are the financial markets telling us about the future?

The Message

So what is the message of the new millennium? What should we learn about it? What should we do about it?

Change. That is what the new millennium is all about. How we change. What we change. Why we change. When we change. The message of the new millennium is that we must rethink our position in a new world order. The world around us is on the crest of a great tidal wave of change, growth and development. We must reposition ourselves to move with this wave of change. We must also learn how to ride this wave, how to surf it with elegance.

Now some people think that it is enough to react to the environment. They don’t wish to spend too much energy or too many resources anticipating the future. They would rather wait for the future to happen and then adjust to it as necessary. Most people are this way. I call them swimmers. Nice skillful people, they know how to swim real well, even in rough water.

Friends, you can’t swim through a tidal wave. You must surf it or drown. We are not talking about a little bit of change. Naturally evolving change. Change the way we know it or have seen it in the past. No, we are talking about big, monstrous, huge change. Think tatsumi tidal wave, earthquake, nuclear explosion, exponential kind of change. We are talking about the big stuff. The really big stuff.

The message is that we should not be reacting to our environment, we should be proacting to our environment. When you react to something, you wait for it to happen before you make your move. When you proact to something you make your move before the thing happens.

Positioning

The first step is to position yourself in relation to how the world around you is changing. The worst place to be is in front of the wave as it comes down on your head. Consider the high cost, high markup retailer that is not differentiating the product they sell from what is sold on the internet. Wipe-Out.

Perhaps you are out there with products that do not yet have internet competitors. Do nothing and the wave will pass you by taking your competitors with it and leaving you behind. In the current environment you cannot afford to do nothing. You must be proactive.

To get positioning you must think strategically. Carefully consider where you are today. Identify your strengths and weaknesses. Don’t jump to conclusions about your goals. Consider how the world around you is changing. Anticipate the new and different opportunities that will be available in the rapidly changing market. Be careful not to set your goals based on current conditions because by the time you reach your goals the markets and opportunities may be entirely different. Remember, everything around you is changing. You are going to have to set flexible goals.

Firm and fixed goals may look good on paper and they may put you ahead of the wave. But when the wave hits, will you be able to adapt to it? Will you be able to constantly reposition yourself to move with the changing business environment? You need to build flexibility and adaptability into your goal planning.

Be careful not to get out too far in front of the wave. In the old days many people, this writer included, used to think that the best way to succeed was by making waves. For most people that is no longer the case. You can probably make more money riding waves then making them. Try to position yourself on the wave, not in front of it or behind it. Timing is very important. Don’t just think about what you want to do, think about when you want to do it.

Planning

Once you set your flexible goals and have a reasonable idea about where you want to position yourself to take advantage of future opportunities, start thinking about developing a strategic plan to get you where you want to go. Take your time. Think things through carefully. Often the shortest distance between two points is not a straight line, but rather the path of least resistance.

Obviously, you should optimize current resources and be very careful not to jump too far too fast. Invest in human resources because they will be your most vital asset in the years ahead. Consider strategic alliances with suppliers who have a long-term strategic interest in your success. In a turbulent environment you want people you can trust working with you. Target market your products and customers. Don’t try to be everything to everybody. The markets of the future will be highly specialized and focused.

Make sure your plan can be changed to adapt to the changing environment. Flexible goals will require flexible strategic plans. Don’t get locked in. Your strategic plan should be a series of steps that evolve one from the other. Implement your plan one step at a time. Reconsider your goals and plan after each step.

Strategic Thinking

Given the rapid pace of change in the business environment around us it is quite natural for us to focus on how we can change the way we do things in our business. How we buy and sell. How we manage information. How we control our inventory and market our products. While this is a good idea it doesn’t really meet the challenge presented by the new millennium.

Our first step should be to think about how we can change ourselves. Specifically, how we can change the way we think about change. Do we embrace change as an opportunity, or do we consider it a problem that we need to cope with? Are we moving toward a new concept of strategic thinking that recognizes that change will be constant in the years ahead? The most important thing we can do is develop a new mindset, a new strategic way of thinking that will enable us to not only confront the challenges ahead, but turn them into opportunities for growth and development.

Conclusion

The new millennium appears to be an important milestone in the development of the markets of the future. While the initial impact on the trade appears to present more challenge than opportunity, the long-term implications are more positive than many anticipate. The emergence of more efficient markets will greatly enhance trading opportunities and lead to an unprecedented expansion of markets.

As the world’s economies expand in the years ahead we will witness steadily increasing levels of wealth accumulation. The basic needs of the world’s population will be met as the global economy expands. There will be a steadily increasing pool of consumers that will be able to afford the purchase of luxury products.

The outlook for diamond demand in the years ahead is unbelievably positive. More consumers than ever before will buy diamonds not just because they can afford them, but also because once the basic demand for necessities is met, society will attribute significantly greater value to emotional and symbolic needs.
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Tags: Consumers, Economy, Luxury Products
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