Tuesday, April 14, 2015

Staying Up Top is Hard to Do

At any given point, an organization can fail.  There are many elements that combined can spell success or smell of disaster.  Great organizations are not the exception.   

“There is no consistently excellent company…Every company rises and falls over time.”

Great companies – ones that are well-managed and have excellent people capital – can find themselves “in trouble” with the flip of a coin, almost like they couldn't see it coming. 

We have discussed Kodak and its inability to transition into the digital market (even though it had the technology before others and could have become the leader others tried to emulate).  There are others, too, who have fallen victim to turning a blind eye to the future.  Look at Blockbuster.  I remember as a child, it was the only way to rent movies.  Blockbuster should have seen Netflix coming.  People prefer what’s easy.  Receiving your rental in the mail in 2 days is as easy as it comes.  Blockbuster wasn’t completely lost, though, until it failed to enter the streaming business.  With the proliferation of the internet, it was clear that people loved receiving their entertainment/information in one place: their computer.  Wide-spread use of illegal crowd-share software meant it was only a matter of time before someone intervened (the government/film studios) and people had to find a way to legally download films.  In comes Netflix, again, and now not only sends you films, but also allows you to stream your choice.  For a while there, Netflix was in its own blue ocean…that is until DVR devices and On-Demand was created by cable companies. 

Added to the list of failures can be Nokia and Blackberry (depending on you view if whether the glass is half empty or half full).  Both are still around, but much of their issues stem from their inability to produce devices that can compete with iPhones and Androids.  Both brands were extremely popular…until they weren’t.  Many of the reasons why they've lost market share is due to their decision not to adopt smartphone technology.  People and the market moved on.  They should have, too.


I found it odd that Apple made it on Clayton’s list, but this was 1997, before Apple created its blue ocean consisting of the iPod and its many incarnations.  I don’t think Apple was a household name before the iPod, and now it’s ubiquitous and extremely profitable.  Apple did everything possible to protect its ocean and it did not start getting any real competition until Androids came along; even then, it’s many brands and many phones competing against one iPhone.  In my opinion, Apple’s still in a lonely ocean.

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