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If you’ve spent time developing your organization’s strategy, chances are you’re familiar with your competition. You know your competitors’ offerings, their strengths and weaknesses, and how you can deliver where they don’t. But when it comes to preparing for the future, there is one alternative competitor, less obvious but omnipresent, that may not have crossed your mind: nonconsumption. Keep reading to find out why nonconsumption may be a threat to your organization and how to address it.

Nonconsumption: Your Invisible Competition

At last year’s Reimagine the Future Summit, I had the opportunity to meet backstage with Efosa Ojomo, Nigerian author, researcher, and speaker at Harvard Business School and the Clayton Christensen Institute for Disruptive Innovation. He introduced me to the concept of nonconsumption as a major competitor in the market.

He explains, “Nonconsumption occurs when the vast majority of people in an economy would benefit from access to a product or service, but due to obstacles such as cost, expertise, time, or availability, they are unable to afford the product.”

If left unchecked, nonconsumption can become one of your biggest competitors, but it can also lead to untapped market potential and strategic opportunities.

Four Reasons for Nonconsumption

According to Efosa, there are four reasons why consumers are not buying and using your product or service: cost, expertise, time, and availability. As you consider your offerings, have your potential customers run into any of these obstacles?

  1. They can’t afford it.
  2. They don’t have time.
  3. They don’t know how to use it.
  4. They don’t have access to it.

By monitoring customer behavior, which may be different from what they tell you directly, you can identify reasons for nonconsumption and target new opportunities.

New Chinese Virtual Currency Addresses Nonconsumption

In China, the central government is piloting a new digital currency that would allow customers to spend on purchases online or offline. If the trial is successful, there will be many interesting implications to discuss, including monitoring the flow of money to influence economic policy or implementing negative interest rates to encourage spending. Today, we’ll focus on how the new payment system competes against corporations by targeting nonconsumption.

Online payment systems are nothing new – most Chinese consumers are familiar with Alipay and WeChat Pay. However, the new virtual currency does not require an internet connection or any transaction fees. Accessibility is increased, and consumers in rural areas or those with poor cellular service are now able to participate by downloading a digital wallet and scanning a QR code for payments.

By eliminating processing fees, cost to merchants is decreased and makes the new payment system more appealing than competitors’ solutions. Consumers and merchants who have not used virtual payment systems in the past may enter the market due to enhanced accessibility and reduced cost.

Conclusion

Unlocking clues to nonconsumption can lead you to discover what I call Fourth Options, truly disruptive and innovative strategies that allow you to outthink the competition and shape the future. By getting to know your customers and deciphering where they are held back by cost, ease of use, or accessibility, you gain the key to opening new markets and untapping nonconsumption.

Photo by Markus Winkler from Pexels

Leverage
Point
“8Ps” of StrategyOpportunity
for Disruption
Recommended Leverage Points
Position- The farmers, individual and corporate, that you are targeting.

- The need of the agricultural industry that you seek to fill.
3- What technologies do you control that can help you tap into market
segments that you previously thought unreachable?

- What are the potential business alliances you could think about with key players in the segment to serve your customers with integrated solutions? (Serving customers with more integrated solutions example: serving farmers with fertilizers, crop protection and other).
Product- The products you offer, and the characteristics that affect their value to customers.

- The technology you develop for producing those products.
8- What moves are your organization taking to implement Big Data and analytics to your operations? What IoT and blockchain applications can you use?

- What tools and technology could you utilize or develop to improve food quality, traceability, and
production?

- How can you develop a more sustainable production model to accommodate constraints on arable
land?

- What is the future business model needed to serve new differentiated products to your customers?
Promotion- How you connect with farmers and consumers across a variety of locations and industries.
- How to make consumers, producers, and other stakeholders aware of your products and services.
8- How are you connecting your product with individual and corporate farms who could utilize it?
- How could you anticipate market and customer needs to make customers interested in accessing your differentiated products?
PriceHow consumers and other members of the agricultural supply chain pay for access to agricultural products.7- What elements of value comprise your pricing? How do each of those elements satisfy the varying needs of your customers?
Placement- How food products reach consumers. How the technologies, data, and services reach stakeholders in the supply chain.9- What new paths might exist for helping consumers access the food they desire?
- How are you adapting your operations and supply chain to accommodate consumers’ desire for proximity to the food they eat?
- How could you anticipate customer expectation to make products more
accessible to customers/agile supply chain?
- Have you considered urbanization as a part of your growth strategy?
Physical
Experience
- How your food satisfies the needs and desires of your customer.
- How the services you provide to agribusiness fulfill their needs.
9- Where does your food rate on a taste, appearance, and freshness
scale?
- Could the services you provide to companies and farms in the agriculture industry be expanded to meet more needs?
- What senses does your food affect besides hunger? How does your
customer extract value from your food in addition to consumption?
Processes- Guiding your food production operations in a manner cognizant of social pressure.8- How can you manage the supply chain differently to improve traceability and reduce waste?
- How can you innovate systems in production, processing, storing, shipping, retailing, etc.?
- What are new capabilities to increase sustainability (impact on the environment, or ESG) components?
People- The choices you make regarding hiring, organizing, and incentivizing your people and your culture.- How are you leveraging the agricultural experience of your staff bottom-up to achieve your vision?
- How do you anticipate new organizational capabilities needed to perform your future strategy (innovation, exponential technologies needed, agile customer relationship, innovative supply chain)?
- How do you manage your talents to assure suitable development with exposure in the agrifood main challenges/allowing a more sustainable view of the opportunities/cross-sectors?
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