"The only way to successfully predict the future is to invent it." Alan Kay, PC Guru

There are a number of emerging trends, which are, and will have, a significant impact on the success or failure of virtualy all businesses in the United States. Understanding these emerging trends and developing a strong picture of future potential trends ("foresight") that drive both opportunities and challenges is critical. Developing foresight on key trends is also the first step in developing an assessment of future external market forces and drivers as part of a strategic planning process. Once developed, the trend analysis then drives and clarifies a company's picture of future industry structure, competitor landscape, customer segments and needs, and market potential. InteVation has identified a number of key trends that will drive business strategy and opportunity in the coming years. We will update and add to these trends as we continue to monitor the forces of change. Emerging Trends: Product/Service Integration, Innovation and Obsolescence Disintermediation Industry Convergence Industry Consolidation Dominance of Brands Control of Customer Relationship Mobile/Self-Sufficient Worker Small Business Explosion Globalization Technology and the Internet Core Competencies/Outsourcing Competition: Friend and Foe Product/Service Integration, Innovation and Obsolescence -- Customers, whether business or consumer, are increasingly demanding products that offer strong value, solve specific problems, have greater functionality/ease of use and that are integrated with excellent service support and higher information content. Consumers are increasingly attracted to products such as Rubbermaid's "wrapping paper box" and "litter-less lunch kit" which solve very specific problems. Customers will also seek "smart" and easy to use products such as VCRs that set the time automatically and tires that notify the driver when air pressure or tread level is low. Quality of service and after-purchase support of products from computers to cars will increasingly drive customer purchase decisions as much as the quality of the product in the future. For example, owner satisfaction with Lexus and Saturn cars' can be due equally to the purchase experience, level of service at the dealer, roadside support and problem resolution - as to the quality of the actual car. Product manufacturers will increasingly be expected to "raise the bar" on the quality of their products and support service and integrate "smart" technology into their product design. Manufacturers are increasingly focusing on innovation - whether enhancing or updating existing products or developing entirely new ones. Industries such as fashion apparel and personal computers are obvious examples, but virtually every industry including ice cream, coffee, aircraft car seats, toothpaste and others are trying to gain an edge with new variations and innovative concepts. With innovation, however, comes unpredictable demand and short life cycles. Successful manufacturers in the future will be those that can innovate rapidly and manage the supply chain and product life cycle effectively. Secondly, manufacturers increasingly are faced with format, style, supplier or underlying design and technology challenges created by competing companies. Past and current technology examples include Beta vs VHS, Mac OS vs DOS/Windows, US Robotics vs Lucent (56K modem), DVD formats and Intel vs Cyrix and AMD. Customers are also facing dizzying choices - do I buy the current Intel processor or wait a few months for the next version?; Do I buy the current titanium Big Bertha golf club - or wait a six months till they come out with a better one (and buy the earlier and less expensive model)? Much of a manufacturer's success in the future will depend on how they manage relationships with suppliers, competitors and retailers; produce flexible and easily upgraded products; understand customer purchasing habits and preferences; and manage and build brand equity. Disintermediation -- Driven by technology, retailer buying power and changing sales strategies - manufacturers are increasingly selling direct to customers. Dell and Gateway 2000, successful computer manufacturers and direct sellers, are now being followed by H-P, Packard Bell and Compac. Manufacturers, particularly new companies, of other products such as bicycles and golf equipment - which benefit from customization or product packaging will also pursue the direct selling approach. Manufacturers will also increasingly use Internet distributors (aggregators) to sell their products, by passing traditional physical-space distributors and retailers. Big box retailers with enormous buying power such as WalMart, Home Depot, Price/CostCo and OfficeDepot, are increasingly purchasing direct from manufacturers rather than through distributors. And some retailers such as CompUSA (low-priced computers) are producing their own brand of products. And finally, manufacturers with strong brand names will continue to pursue their own retail concepts such as the Levi, Sony and Nike stores.