Diversification – The New Business as Usual

This is a time to observe how the world adapts to the changing demands of the environment we find ourselves in and understand how our behaviours adapt in terms of purchasing, adoption and utilisation of goods and products. Just how are businesses big and small dealing with diversification, evolving product lines, business processes or even course correction?

Increased Demand for Relevant Products

Firstly, we’re looking at existing products available to the consumer Before Coronavirus (let’s call this BC for a laugh) and comparing with the newfound level of demand and varied types of usage during COVID-19.

We’ve taken cloud solution Slack as an example; in a recent article by Tom Warren at The Verge, it was reported that the business-focussed chat and communications app has experienced it’s highest ever volume of simultaneous online members, thanks to the influx of people suddenly having to work from home. But where would the users have sat on Rogers Diffusion of Innovation chart (shown below), before this event? It’s fair to say that those joining Slack during this pandemic are likely to be considered Laggards as far as the comms platform is concerned; they have been forced into a position where they need to adopt technology that they weren’t utilising before. It you take this example and similar offerings, it turns out the Coronavirus could well have a positive affect for some businesses, propelling slow adopters into the market.

Image by Jurgen Appelo, Flickr

Companies like Milk & More, the home delivery milk and grocery service, along with the trendy veg box businesses, are selling out and in many cases having to turn away new customers, as they just don’t have the stock or capacity to take on new custom. Hands up if you wished you’d already subscribed to one of these services before COVID-19 hit!

Diversification to Save Lives

Now let’s consider where the gaps are during this national emergency. What didn’t we know we needed? What don’t we have enough of? And how quickly can we develop the products or change our processes that we need to fill the COVID-19 needs gap?

We recently published an article about some of the best innovations we have seen since Coronavirus landed in the UK, which featured Dyson’s shift to create ventilators, having been called upon by the Prime Minister to help urgently fulfil a pressing need. This ability to adapt so swiftly, saw Dyson create a brand-new design for a ventilator design in just 10 days which shows just what British design and engineering is all about – bravo Dyson, job well done!

Other examples we’ve enjoyed learning about include seamstresses across the country pulling together to make scrubs and face masks for NHS staff; something you would ordinarily expect a corporate giant like the NHS to commission a clinical supply chain to provide (and they were probably, ironically, made in China). We’ve heard about independent café’s switching from a typical café set up, to a takeaway and delivery model, further diversifying to offer basic groceries in the orders, which their customers are otherwise struggling to obtain from the usual supermarkets.

In Dorset, a new delicatessen launched just as the Corona Crisis kicked off, prompting the business to immediately switch to a collection and delivery-only service from the outset. The company have found that the business is being avidly supported by local custom, not only because the customers like the types of products in stock, but because there is a genuine need for basics, and they are willing to pay the delicatessen prices to get their hands on them! This example really highlights now, more than ever, what it means to ‘shop local’, use local suppliers and support those businesses who can truly support their customers in a more flexible way than the supermarket giants can offer.

Photo by Magda Ehlers from Pexels

An independent children’s craft and play café have packaged up their toy selections and created toy packs for hire on a library-rotation basis. They now also offer crafting packs that kids can do at home, and even a chance to order takeaway cake and coffee to fuel the grownups in their all-new home-schooling, weird co-working set-ups!

Another example we have really enjoyed is pub and brewery chain, Brewdog, who have started making hand sanitiser in their Scottish distillery. This has been met with mixed reactions, with some suggestions that they should give the product away. Whilst philanthropy is admirable, and on many levels much needed right now, why shouldn’t businesses diversify in order to survive – we all want an economy to rely on once normality is restored surely?

Recognising the Value

This crisis has really bought 3D printing into its own. Headlines are reporting 3D printing companies being called upon to create products like ventilator valves, face masks and other safety equipment at significantly faster pace than a traditional manufacturer might ordinarily be able to achieve. 3D printing company Materialise have even created a design file for a handsfree door opener, which they have made available at no cost, enabling those with 3D printing capabilities to create their own door openers at little cost. Interestingly they have also placed a patent on the design in order to protect the design from being monetised – fantastic gesture of goodwill which could genuinely save lives.

Change Afoot

Could these events change how we see products being manufactured? Instead of manufacturing being centralised, perhaps the very fact that we have been forced to do things differently during this crisis, could mean that we can see the value in a more distributed manufacture and production process, which is proving to work well. This could very much shift the focus from relying on the larger mass production companies and even out the playing field a little.

Perhaps this situation may serve to open up supply chains to other businesses who were previously excluded because they didn’t have the right ISO accreditation and other certifications normally required to become a supplier. Perhaps these businesses have now been allowed to demonstrate their true capability to fulfil demand, whilst delivering outstanding levels of customer service, while everyone collectively tries to do their best during a testing time.

We hope these smaller suppliers demonstrate that they can maintain quality just as well through pride of work, can work to potentially tighter time frames than larger organisations shrouded in red tape and protocol.

Perhaps as a result of all things Corona, we could we see fairer pricing and wages all round, as there is no longer a monopoly held by the big firms who just seem to operate on a cost basis, low wages and high cost to the customer.

Who knows what the future holds, but we look forward to seeing what sort of changes this pandemic brings about weeks, months and years from now.

Amidst the madness, stay safe.

Team Conficio.

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