A recent article about what would seem to be the most mundane and non-digital of products illustrates how the digitalization of the world affects all businesses. The article was by Ravin Gandhi, CEO and Founder of GMM Nonstick Coatings (GMM), one of the world’s largest suppliers of nonstick coatings to such companies as Calphalon, Farberware, KitchenAid, George Forman and others. The lessons he gives regarding the need to stay competitive in the digital environment, while in a manufacturing context, pertain to any business, including the financial world.
Why should a B2B company even care?
The first question one might ask, is why would a company like GMM even care about what’s going on in the digital world. It’s a B2B company with a stable, high-quality client base and probably not a lot of competition. The answer to that question, the same answer to many questions about competing online, is “Amazon.” Many of GMM’s clients, who previously sold mostly through bricks and mortar, now sell more and more online, often through Amazon. And if GMM raises its prices, for example, because of rising prices of raw materials such as oil and silicon, forcing GMM’s client to subsequently raise its prices on Amazon, it risks being eliminated as a vendor based on Amazon’s algorithmic methodology.
So how does a company respond to a radically changing market environment? Gandhi has three key tactics that are widely applicable:
1.No matter where you are in the supply chain, you better innovate like Bezos (CEO, Amazon)– this is especially true in the financial services world, where underlying technology is changing rapidly for back, middle and front offices. From fingerprint, face and voice technology recognition to portfolio optimization and tax overlays, the landscape is constantly shifting. Those who can’t keep up and adapt, well you know how that ends….
2.Know that last year’s low-cost manufacturing information is worthless – a bit like “past performance is not an indicator of future performance,” being knowledgeable about where the next opportunity is coming from and where risk may occur is critical to both organizations and their end clients
3.Creative marketing is a necessity – while this may seem obvious, perhaps the most challenging maxim in a highly competitive industry like financial services is differentiating oneself and getting the message out in innovative and impactful ways