Currently the world is experiencing major challenges in its supply chain; particularly the USA. While we are all happy with the concept of dupply chain, many are rarely aware of the operative word, “supply.” Often, we over-emphasize the concept of the chain.
However, the supply, is the key factor which denotes a collection of goods and services coalescing to form the chain. Therefore, the disruptions in the current chain actually implies a disruption in markets–not just chains. In reality, a supply chain is a collection of markets strung together by both technology and relationships.
Despite the advance in tech, we see relationships deteriorate and change in the world market. The synergies and connections between these collections of najor markets and market contributors have begun to disintegrate. The ability to maintain good relationships without them turning adversarial has been a key feature of some major world suppliers in various contingent markets. This has helped the world continue moving goods and services uninterrupted.
However, as is always the case, some market players maintain an adversarial approach to business. An author Kevin O’Leary coined the term that business is war. To be fair, this is not a new concept, but is characteristic of some worldviews. To be fair, this is not a new concept, but is characteristic of some worldviews and a mountain of scholarship in this vein proliferate.
And for some within the market, progress by anyone is a cause for major hostility. This was a feature in many of the massacres that took place in the USA where prosperous black towns were crushed by violent white mobs for fabricated reasons. It can also be seen in the Nazi Germany regime when the prosperity of minority Jewish populations were often extrapolated as threat.
Business is war. I go out there, I want to kill the competitors. I want to make their lives miserable.” ~Kevin O’Leary
This market worldview makes supply chain and interconnected markets a challenge. Even the Native American First Nations people who first encountered the settlers determined from their own cultural lore, that the new arrivals had what they calles, Wendigo/Wetiko. It is described as a possession characterized by feelings of unrestrained greed, desire to murder and canabalize (or live parasitically off of) unwitting or unwilling others. Native Americans, much like Africans first began their interaction with settlers as trade partners, assuming the latter sought a stable marketplace for goods and services–a supply chain.
However, as demonstrated in the Native American marketplace, the breakdown of good relations lead to market volitility. Fueled by any number of reasons, from the concept of Wetiko to the overuse of market manipulations to gain unfair advantage, the culmination results in an unstable market. And this means a slow down in the delivery of goods and services on the “chain.”
And while markets are thought to be influenced by many factors, undoubtedly, the greatest factor is the human factor. At the end of the day, goods and services go to people, not ambiguous concepts and faceless processes. Ultimately the people who comprise major markets seek to acquire the goods and services they desire without exorbitant price or rigor.
With the volatility of current markets, market players and consumers cannot now reasonably expect a level of predictability. Nations, like consumers are seeking reliable markets and partners that are keen to create not just innovation but good stable business relationships. What good is an innovative supplier that lacks the EQ (Emotional Quotient) to seek market stability, but instead stokes hostile relations, punitive measures and polarizing factionalism. To be fair however, for a time–particularly in the 1980s, these kinds of market relations were the dominant theme when “greed was good,” There was a proliferation of fierce Hostile Corporate Takeovers on Wallstreet. According to a report by the Brookings Institute, there were 62 hostile takeovers between 1984 and 1986 alone. Also known as a Corporate Raid, hostile takevers were a major feature. Europa-Brazillian InBev sought to takeover Anheuser-Busch in 2008 and Kraft versus Cadbury in the 1980s. It was a time when such adversarial market relations popularized and glamourized the corporate version of the Native American concept of Wetiko.
No matter how innovative, a market player that is set on instability and adversarial relations, cannot properly contribute to interdependent markets or diverse value chains. The market itself will seek to find stability–with or without the adversarial disruptor(s). As markets continue to mature and change, not only will the ways in which the players interface change, but also the market leaders and the means of exchange.
Covid-19 is playing a huge role in changing the current market, as most major world upheavals tend to do. The pandemic gave certain governments the license to print as much money as they wanted, while others were forced to borrow exorbitantly (Perhaps their printing machines were broken?). Regardless, the pandemic fueled a change, a pivot toward digital currency and blockchain in the hope of creating stability in markets. However, regardless of the new technology and innovation, good market relations will be at the heart of market growth and diversification. The market is changing.