Peer opinion more effective in age of new media

Companies are focusing more on managing costs than searching for new opportunities for expansion.
Companies are focusing more on managing costs than searching for new opportunities for expansion. PHOTO: ST FILE

Based on a report from the Institute of Chartered Accountants in England and Wales (ICAEW), the growth forecast for Singapore's gross domestic product is expected to decline this year (Singapore GDP growth to slow to 2.4% this year: ICAEW report, March 18).

Continuous business growth, for exports and the manufacturing sector, remains elusive since most current theories on creating value are becoming less likely to deliver.

Companies are focusing more on managing costs than searching for new opportunities for expansion. The shorter cycles between economic growth and downturn are making it increasingly more difficult for companies to do any long-term planning.

The continuously changing economic models keep challenging businesses to stay relevant. To ensure long-lasting competitiveness, companies must keep on delivering sustainable value, which is getting more difficult to achieve.

The unrelenting changes affecting our society have implications for the way we do business. Only innovative solutions that bring genuine value, appropriate to the specific needs of consumers, will result in sustainable growth.

Traditional business models, where corporations leveraged their economies of scale, technology and a reliable supply chain to meet the demands of the mass market, are numbered. The cycle of industrial production and uncontrolled product consumption, owing to greater consumer spending power, is behind us.

The winds of change are shaped by the Internet, which facilitates social engagement. Anybody can now have access to creating value, which was previously under the influence of large businesses.

The control that multinational corporations once possessed over communication and media channels is now in the hands of technically savvy individuals who analyse and evaluate products and services that brands have little control over.

New media has replaced trust in brand advertisements with peer opinion. Positioning products and services through brand slogans is becoming less effective. A new level of transparency is forcing businesses to listen to what consumers want.

Organisations must review current theories and practices they have sworn by for years. Strategies that supposedly predict future growth are nothing more than ideas derived from existing models.

To penetrate into online forums, talented staff with revolutionary ideas need to be recruited.

Businesses which want to stay ahead of the competition must understand emerging market conditions well to create sustainable value for themselves.

Edmund Khoo Kim Hock

A version of this article appeared in the print edition of The Straits Times on March 27, 2019, with the headline 'Peer opinion more effective in age of new media'. Print Edition | Subscribe