The term VUCA was first used in 1987, but was introduced in 1991 by the U.S. military at the end of the Cold War, resulting in more volatile, uncertain, complex, and ambiguous situations in the world. The VUCA concept represents a changing environment where pre-established standard rules and regulations do not work. It requires an individual and differentiated approach depending on the nature of the problem and the prevailing situations. Companies need to understand that they operate in a VUCA world and need to be agile and adaptable.
VUCA stands for volatility, uncertainty, complexity and ambiguity
Volatility: means increasing turbulence and changing circumstances. Companies need to learn to accept change and act accordingly, understanding other opportunities in the market. For example, PVR Cinemas understood the volatility in the single-screen cinema market and adopted the concept of a multiplex cinema.
Uncertainty: means uncertainty in the future. Companies like BOLT and Uber have created an uncertain challenge for the automotive industry. As such, the automotive industry needs to reduce the impact by understanding these challenges and developing an appropriate strategy. Companies need to be ready for an uncertain and unpredictable future.
Complexity: Businesses today are more connected than ever. Diverse culture, work environment, globalization make the organization complex. Businesses need to adopt a simplified and clear approach to reduce complexity.
Ambiguity: Companies have to work in groups with different people, and that means different interpretations of the same problem. This introduces ambiguity and confusion. Similarly, entering a new, unfamiliar and unexplored market can be confusing and therefore entrepreneurs need to broaden their imagination, analyze the situation more carefully and reduce the ambiguity.
VUCA and marketing
The way we serve, promote and communicate with customers has changed dramatically over the last few years. To stay competitive in this VUCA world, we must follow these five principles.
Knowing your competitor: Finding your competitor is an easy and difficult task. We can easily find our known competitors, but finding unknown competitors is a real challenge. It could be a new technology or another product that meets the same customer needs.
Market positioning: The market positioning claim should be well defined. Your customers need to know what you sell and why they should buy from you.
Update your image: Updating your image in this ever-changing world of VUCA is very important. We have to adapt our products to the changing needs of customers.
Take care of your current customer: Your current customers are important resources for your growth and development. This may be your competitor’s goal. Our primary goal should be to meet their needs and satisfaction.
Look ahead: Anticipating the future and planning strategies to stay competitive in the VUCA world is very important for growth and development.
Marketing in the world of VUCA
The market is VUCA. Marketing is about human behavior, and well, we’re a little crazy. The fickleness of marketing stems from the same complex environment as traffic, weather, and biology. Many collaborating agents – customers, competitors, social networks, partners, regulators. Multiple feedback loops. Situations change quickly. Many unknowns. Unpredictable.
VUCA therefore the most accurate depiction of a buyer’s journey is a child’s scribble. VUCA is why a campaign could blow the roof off in several markets and then inexplicably fail in a new location tomorrow. VUCA makes it impossible to fully capture your marketing ROI.
Digital dynamics have accelerated the pace of change, forcing the marketing reality of VUCA into clear relief. By removing the historical constraints of distance, scale, intelligence, and plasticity, digital technology has caused an explosion of disruption. As digital interactions between market participants increased, the resulting feedback loops ricocheted with more turbulence. Market agents, especially customers, have gained power. VUCA’s marketing environment cannot be ignored.