Strategic drift | Inquirer Business

Strategic drift

/ 05:01 AM March 26, 2021

When your strategy and business model are no longer relevant because changes in the external environment are happening faster than those in your organization, you are in what is called a strategic drift.

The risk to incumbent market players is that a new market leader may emerge and take market share away from them, as the upstart may have been better at anticipating changes in consumer behavior.



Look at the popularity of knock-on-the-door direct selling companies in the 1980s and 1990s. They failed to acknowledge that more women would end up working, more condominiums would emerge, and peace and order concerns would make their selling methods obsolete.

Look at the banking industry. Digital-first banks were more prepared at the height of lockdown, versus traditional banks that asked their customers to use their digital capabilities only during specific times, defeating the purpose of using digital for convenience.


Look at early entrants to e-commerce like Lazada and Shopee: They were able to provide continuity and relevance to consumers.

Many thought leaders eventually become market leaders.

The basic dynamics of converting brand awareness and positive brand association into trial and repeat behavior are at play.

Traditional strengths can become weaknesses when companies hang on to their old ways, without a viable working alternative when it is needed. This is because they have either been unwilling to change their paradigm, overestimated their strength, or read the external environment wrong.

The unexpected pandemic suddenly shut down many establishments for months, drastically affecting consumer behavior.

Consumers’ newfound online alternatives may likely stay.

Catch up

Just half of customers doing repeated purchases online will already spell trouble for brick-and-mortar establishments, as they play catch up and act as second fiddle in their newfound but forced e-commerce channel, especially as early e-retailers provided their customers with ease of reorders, rewards and, eventually, auto replenishment reminders.


Look at these massive changes that occurred within just one year from COVID-19 lockdown.

1. Work from home led to more home cooking and healthier eating, gardening, use of faster internet, more paperless work and cloud everything, home schooling, more discretionary time saved from travel time to/from work and a more introverted lifestyle.

2. Going contactless led to home lockdowns, online Masses, virtual job interviews, virtual meetings, “e-numan,” “e-lamay,” telemedical consultations and booming online transactions, triggering massive growth in the e-commerce channel. Plus, education’s new blended learning style, more consumption of entertainment, esports, digital banking, increased interest in artificial intelligence solutions, access to freelancers from around the world, and more communication in Viber and other online communities.

3. Cashless led to digital transfers and prepayment instead of using or holding paper money in transactions, transportation and tipping.

4. Delivery or pickup preference led to a rise in bikes, the rise of “homepreneurs” and even the rebirth of plastic packaging, alongside the decline of malling, dine-in restaurants and on-the-go consumption.

5. Safety consciousness led to self-care, multiple hand-washing/sanitizing a day, mandatory testing before port departures and quarantine upon arrival (to be replaced with vaccine passport soon), mindfulness on social distancing and public hygiene, and even the rise of home water purifiers and personal gyms.

6. The lockdown experience led to increased demand for microlending, job offers for those living nearer offices as part of business continuity planning. Suppliers’ choices became more diversified. Reliance on the cheapest provider in one location was reduced.

It is important for companies not to stick to the traditional strat plan question of who, what, how, where but also force the who else, what else, how else and where else questions, assuming they cannot do what they used to do.

That is easy to say but not easy to do because execution involves a power shift in the group or executive owning this new direction.

It took the economy during the Spanish flu five years to recover. What if the economy will only go back to the 2019 level not in 2022 or 2023 but in 2024?

What will your strategy be like then?

The author will conduct his 4th Business Model Design and Innovation class starting April 6. Please email [email protected] for inquiries.

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TAGS: COVID-19 lockdown, digital
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