The increasing proliferation of advanced technologies will shift the source of competitive advantage from technology to other managerial and strategic capabilities. The emergence of AI fueled by big data has transformed customers and your businesses and resulted in many new business opportunities. The drive is the possibility to understand changes in how consumers access and consume products or services. Which have undergone a radical change. Thus, AI reinforces he capabilities of managers and strategists.
Due to the rapid developments and changes and AI, managers can gain more precise. And accurate insights through the big data available. AI, also fueled by big data, promises to transform decision-making by providing managers with more capabilities. Noting that they relied on gut feeling or reasoning while making important decisions during the management of their work teams. However, despite these opportunities, many experts have pointed out that many technological changes and fundamental smart transformation will likely increase market concentration. It appears in the dominance of a few prominent companies on the markets.
Living with Smart Transformation
When information becomes the primary material that connects many markets and consumers, combined with the fact that collected data and analysis tools such as AI are becoming ubiquitous, at this time we have to ask the following questions:
- Do managers and strategists keep pace with these recent developments?
- How can the apparent contraction of competition be explained when the opportunities to pursue new opportunities increase?
- What are the exact set of strategies that will enable companies to achieve a sustainable competitive advantage?
- How can strategists and managers do to protect their companies?
- What should entrepreneurs do to make their companies stand out?
- Perhaps most importantly, what can managers and strategists do to protect their businesses and companies and prevent themselves from becoming extinct?
For example, some companies use algorithms to evaluate potential acquisition targets, which is the job of corporate strategists. Also, some media companies use predictive analytics to determine the types of TV shows to be produced. Which is the job of production managers. Venture capital firms may continue to get deals through their human connections. But it uses big data and advanced analytics to evaluate investment opportunities. Which is one of the most critical decisions a venture capitalist can make.
Management capabilities and competitive advantage
- In the end, will AI replace managers?
- How will these developments affect competition or market focus?
As managerial capacity is scarce, you are more likely to be a source of competitive advantage. Strategists believe that the increasing ubiquity of technology may not necessarily align with the fact that a few large companies are capturing the lion’s share of the market. If technology-enabled decision-making is already ubiquitous in many industries, why increase market concentration?
To the extent that new technologies are related to automation, adoption of these technologies may also not guarantee a competitive advantage. It certainly will by no means increase the dominance of a few large corporations. And it was also true of many previous technological advances such as electricity or the Internet. Several decades may take a company to leverage AI and big data to its fullest potential. Because they may need to organize themselves or devise new business models to take advantage of them.
To the extent that new business models and other managerial capabilities are the keys to success, it is entirely plausible that only a few large companies with these rare capabilities can somehow demonstrate the value of these new technologies. As well as reap disproportionately high rewards when these new technologies are adopted. Thus, the emergence of these new technologies can increase the scope of competition. And also the market focus of a few large and distinguished companies that possess these management capabilities in one way or another.
The role of managers and strategists
First, if anything, the emergence and ubiquity of new technologies should increase the importance of strategic thinking. Especially the ability to devise new business models dramatically increases the return on adopting such technologies. Managers and strategists are the creators and implementers of new business models. And their fostering of intelligent enterprise transformation is likely to become even more critical. Paradoxically, the increasing proliferation of advanced technologies and systems such as AI will shift the source of competitive advantage from technology to other managerial and strategic capabilities, increasing the returns from its adoption.
Second: Because these data-driven algorithmic decision-making methods depend on decision-making rules for their effectiveness. Managers and strategies will now need better understand the cause-and-effect relationship between managerial decisions and outcomes. Surprisingly, although many would think that mere strong correlations might suffice, a deeper understanding of the mechanisms and conditions will become crucial to arriving at strong foundations for algorithms in the first place as a basis for subsequent learning.
AI reinforces he capabilities of managers and strategists. Which leads to the organizations’ development and the achievements of their strategic goals and future vision.
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