Peter Drucker had said that the purpose of business is to create a consumer. How true is this statement with the Start-ups and the Unicorns of the past decade creating new consumers of products and services?
What drives the efforts of a business to create a consumer? Is it a strategy or a structure? what drives what? Some say Strategy drives structure and some say the reverse. There will be a point when we realise that the reverse- structure driving a strategy – is ineffective because the outcome of the strategy – what you want – is not exactly what you had intended when the structure was created. It is always prudent to let the strategy drive the structure because the structure can be modified when adjustments are needed to execute a strategy in reaching consumers. What we exactly want is achieved only after many iterations and alterations in execution. There are of course exceptions due to environmental hurdles such as trade barriers, local laws or limitations in organizational resources that make the structure rigid and consequently the outcome in the form a product or service that was envisioned is impacted.
Let us understand more about strategy- where does it come from? We do many SWOT analyses of strengths and weaknesses of the little sparks of ideas that can change the world or create value additions to a product or service. People’s psychological impulses lead to strategies, but they get conditioned by an external environment. In a real term, strategy gets evolved from an environment which has multiple layers – macro forces like technology, economics, politico – and micro socio -cultural aspects. Sneakers for example are classic example of how simple foot wears have taken shapes in terms of materials and comfort – fabric, size, weight, Safety, sole, or contour- for manufacturers like Nike, Adidas, Reebok who constantly engaged with people’s emotional and comfort needs and have been innovating for several decades to make newer models just to serve a single purpose of covering our feet. Further creating a baby-sitter job comes out of both husband and wife becoming income earners or a home medical attendant is hired to look after aging, sick parents while you are away for work.
Starting or nurturing a business is always done with a creation of a consumer in mind, duly acknowledging macro environmental factors and matching the opportunities / threats with the internal strengths / weaknesses of the organization.