For companies to evolve, they must define their industries broadly to take advantage of growth opportunities. In a landmark paper by Harvard Professor Theodore Levitt, he gave examples of companies that had difficulty adapting due to myopic business definitions. He felt that a company’s inability to adapt to future market fluxes would have adverse effects on its success.
However, more recent occurrences have proven that it takes more than just adapting for companies to be successful. Notably successful brands have paved their way to the top through strategic planning and not by agility or necessarily adapting to market dynamics. These organisations thrived by positioning themselves and deliberately creating the future.
Microsoft is an interesting case study. The company’s CEO bluntly turned down offers to adapt to mobile computing and trending innovations like Apple’s Iphone. Surprisingly, rather than go bankrupt, the exact opposite happened. Over the last decade, the company has grown revenues at the remarkable annual rate of about 10% and has maintained a margin of nearly 30%, which is impressive. Unlike many companies, Microsoft has little interests in brilliant market forecasting or slick branding. It is presently thriving on research investments it had set up since 1991. When building long-term capacity in your business, speed is not necessarily expedient.
On the other hand, newer brands like Apple and Amazon were not the first to hit the market with their products but they were able to overtake their competitors because they took time out to develop products that were considerably superior and more user-friendly. So we have Apple’s digital music player, smartphones, tablets and computers dominating each category while Amazon also carved a niche for itself even though it was not the pioneer e-commerce website.
A single business category cannot define a company, but its ability to solve problems for its clients. And solving tough problems goes beyond speed and agility; rather it requires long-term preparation and this is what great companies engage in.
Companies should avoid a marketing myopia that limits them to focusing only on one aspect of their industry. In other words, they need to expand beyond the boundaries of their clientele, products and services. It is the responsibility of entrepreneurs to create an environment that reflects the organisation’s vision beyond its immediate products and services to a much broader perspective – problem solving and innovation. There must be a relentless commitment towards creating, delivering and adding new value. Brands should not wait to adapt but should immediately begin to create the future.