Monday, 25 December 2017

Survival of the fittest: Sustainability the biggest Challenge

Article by : Prof. Sanjana Mondal, Assistant Professor, Calcutta Business School

Natural selection is the idea for survival is not only true for species but also for the value offered in the market by its producer or manufacturer. Species that acquire adaptations that are favourable for their environment will pass down those adaptations to their offspring, similarly if the producer fail to adapt the changing environment of business and adjust themselves they will be out of the rat race. Eventually, only manufacturers/producers with those favourable adaptations will survive and that is how the offering and marketing concepts changes over time or evolves through speciation, i.e. generation of newer form of ideas, concepts, forms etc.

We often mistake by understanding “natural selection” and easily mean really is, "fittest" that means the best physical specimen or evidence of the manufacturer/ brand/product or service that is only those with the strong capital, best network, best strategy, best manpower , huge market share etc. will survive in nature or natural business environment.

But that is not always the case. The products/services/ brands/companies that survive are not always the strongest, fastest, or smartest or the best shape, size, looks, design, priced etc. Therefore, "survival of the fittest" may not be the best way to describe what natural selection really is as it applies to evolution. Rather “survival of the fittest” necessarily means the degree of adaptability that leads to sustainability.

The two biggest unexpected failure of the market leaders Kodak and Nokia could site a perfect example in this context. Kodak the leading film manufacturer just washed off the market not because of its competitors or not because they did not had the capacity to fight back the competition but because they were unable to capitalize on the invention for fear of cannibalizing existing product sales. They were resistant to change in the filmless digital technology. Though its digital camera invention was held back but because of management’s concerns about the negative impact on film sales they could not bring that out in the market. They actually failed to feel the changing pulse which Sony perfectly did. When Sony launched a filmless digital camera in 1981, fear permeated Kodak’s executive suite. Specifically, over the next decade, Kodak invested approximately “$5 billion—or 45% of its R&D budget—in digital imaging,” according to a 2005 Harvard Business School case study. Unfortunately, with disruptive technologies such as digital cameras, the firstmover advantage is too great for late entrants to overcome. By the time Kodak realized that their razor-blade business model was dead, the horses were already out of the barn. The company was unable to catch-up to the competition.

Similarly for Nokia, its demise in a short span of time less than even five years is a prime example to learn form. It’s a perfect example that reflects the fatal consequences of adaptation failure or inability to react to upcoming innovation from outside industry. The sudden downfall of the top rank dominant phone company aroused interest among researchers to find the answers for the questions like how did it happen? And can this happen to others as well? After the extensive research there are five major factors that came out as the relevant factors but most important connect between them is again indicating towards adaptation failure.

Therefore sustainability is the biggest challenge, survival in short run does not ensure fitness. Fitness in long run can be achieved only through adaptability and hence that survival is sustainable. Cadbury is the perfect example that explains this theory.

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