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"Beyond the AI Hype and Fear: The Expectations in Business Are High and Need A Dose Of Reality

Updated: Feb 14

Artificial Intelligence in business will be a chess game of move and counter moves. Can AI beat human ingenuity? Well, it has in the game of chess and the game Go. It has often created moves that no human has thought of. Can it do the same in business? The future is betting on it, and it should not be ignored.

Expectations are not only high, but they also tend to be wildly exaggerated when it comes to AI. Everyone wants to cash in on this technology's targeted one trillion-dollar market by 2030. Indeed, this is about identifying opportunities and advantages that will allow a business to grow. Creating competitive advantages is the holy grail for brands, and if it is sustainable and reaches a level of capabilities that will enable a brand to become the leader in a category, it equates to higher performance levels.  

So, how does AI play a role in the future of businesses and brands seeking a competitive advantage? Let’s first start with some definitions and clarifications.

Sustainable Competitive Advantage: This is a long-term strategic asset or capability that a company possesses that is difficult for competitors to replicate or overcome, contributing to a lasting position of superiority in the marketplace. However, corporate advantages lose their strengths because competitors of equal or lesser status can identify, develop, and introduce innovations that are sometimes even disruptive to a whole industry and, foremost, destroy the value proposition of once-lead competitors. That is the hope of AI.

Artificial Intelligence's Role: In the context of competitive advantage, AI refers to systems or platforms that simulate human intelligence processes, leveraging data analysis, machine learning, and other computational techniques to identify patterns, make decisions, or predict outcomes, thereby potentially creating new strategic advantages or disrupting existing ones. The power of AI unleashes its predictive ability to identify new opportunities and improve upon old strategic competencies. However, the notion that this technology will somehow create a level playing field to develop competitive advantages or even make them sustainable will, in the end, be a myth. The dynamics of competitors' capabilities to deliver flawlessly on their capabilities are not consistent or equal.

Most businesses have some advantages. Unfortunately, many are never realized or mature enough to be relevant, unable to scale. Successful competitive advantages are about creating a value chain that differentiates you from your competitors. It could be cost leadership or differentiation in some areas, such as production techniques, delivery, or service.

However, let’s be clear: a new business could emerge due to its AI capabilities with innovations and competitive advantages, but it does not mean everyone can achieve that status. Unfortunately, that does not mean that all businesses will have the same opportunities and successes with AI.

Organizations must want and be able to transform themselves into technology companies first.

What should we expect from businesses and industries that will move forward with transforming themselves?

  1. Organizational appetite to embrace and work with AI. They recognize it as a tool to identify and develop next-generation strategies, innovations, and sustainable competitive advantages—

  2. Develop and recruit the talent to build the foundation necessary to support AI introduction and development.

  3. Have extensive proprietary data and technological experience to build the knowledge foundation to feed the right algorithm software.

  4. The financial resources to access or acquire GPU capabilities.

  5. A plan to transform an organization from what I refer to as an analog structure to an AI structure where they "industrialize human and artificial intelligence to identify, develop, and introduce the next generation of strategies and innovations.

  6. Establish safeguards for both ethics and cybersecurity.

  7. Provide their team access to interact with AI through generative pre-trained transformers (GPT) and develop their prompt-engineering skills.

The disruptive power of AI

Over the last two decades, we have learned that disruptive brands are not always visible at first. It takes time for consumers to see the opportunity for greater convenience, better service, and lower costs. Take Blockbuster Videos as an example, a chain that rented and sold videos to consumers and lost in the entertainment industry because a player like Netflix came along and offered a different value proposition. They mailed videos to customers, who sent them back when they were ready, and there were no late fees. Blockbuster’s business model survived on late fees.  Netflix took the market and today uses AI to identify viewer interests, and every time they log on to the platform, they see recommendations based on their past viewing. Today, we have Apple, Amazon Prime, Disney +, and Crave as competitors doing the same thing.

AI's impact on small versus large businesses

AI's impact on competitive advantages varies significantly between small and large enterprises. Large corporations often have more resources to invest in AI research and development, data acquisition, and computing infrastructure, potentially widening the competitive gap. However, AI also offers smaller businesses the opportunity to innovate and compete in niche markets by leveraging cloud-based AI services, which are more accessible and cost-effective. This democratization of AI technology can enable small enterprises to disrupt established markets with innovative solutions. It would be irresponsible to suggest that smaller businesses don't face challenges in scaling their operations and competing against the data monopolies of larger companies.

How does technology that is artificial intelligence lead to a sustainable competitive advantage?

Human and artificial intelligence will have to improve costs or differentiation continuously to remain or identify a sustainable competitive advantage. And yes, other competitors can follow and improve upon that, claiming a higher level of advantages. However, not everyone benefits from this. And we cannot forget that there will only be one number one, two, and three market share leaders until someone else comes along and dethrones them.

This is AI's real challenge and competitive threat: the potential for fast shifts with who is leading; in other words, AI allows many to develop and introduce new iterations of a similar product, calling them innovations or incremental improvements. And it could become so commonplace that advantages are no longer recognizable. In this case, there could be so much confusion over which brand is best that it can neutralize consumer interest in a product. The main point is that democratization does not mean everyone wins any more than they can today when so few have access to AI. However, without it, in this new business paradigm, regardless of whether you are in retail, healthcare, manufacturing, or pharmaceuticals, the world is about to change, and every business will need the predictive power of AI.

Disruptive Innovation Powered by AI Business Models and Consumers

A product and business plan is being drawn up somewhere in a home or in their garage on a computer. Their neighbors are likely wondering what they are doing. Perhaps even talking about them and why aren't they at work? They see the garage and house lights on late at night. During the day, they load up their family car or van with packages to drop off at the post office or wait for them to be picked up by a courier. They have a vision, a dream, and hopes. They've bet everything on it. What they are doing is very different. They have discovered something unique or identified a weakness within the business model of an entire industry, and they are covertly trying to disrupt it. That's what so many before them have done. Apple, Amazon, Uber, Microsoft, Google, Netflix...these are the unknowns that are in the shadows.

Value propositions are going to be challenged, reinvented, and renewed. The secret to AI is what we expect to achieve from it. In its simplest form, we want to know something new and unexpected. Others will want faster and better decision-making and predictive powers. And yet we will also be looking for those nuggets that elevate customer experiences and move from intent to purchase toward purchasing. There will be voice-interactive chatbots and Personal AI Assistants. Consumers will have no choice. Their adoption is imminent because understanding and experiencing AI to be able to learn and apply that knowledge in the workplace will be key. Just like learning prompt engineering will be.

Many companies are going to adopt and adapt. However, even as with e-commerce and digital marketing, not everyone is going to be great at this, and some may even fall off their lead positions. While it is difficult for existing businesses to become disruptive, they have the opportunity to become technology companies first. And that is what AI has to offer: a fresh start. Just remember it will still take the same level of commitment that it took to develop the disruptive brands mentioned above. Operating as a technology company first means that you have already collected and curated data to feed the prediction machine. Otherwise, nothing changes.

George Minakakis advises organizations and their senior leaders and board directors. He is a keynote speaker for company functions and trade associations. He is a thought leader in creating stronger value propositions, leading change, the transformative power of artificial intelligence, and winning in foreign markets.

He is also a former senior executive with Luxottica and Pepsico, having been Country Manager and CEO in Canada, the USA, and China. He is also a trained board director and holds the chair position within an electricity utility company.

For inquiries, George can be reached at

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