...
The reality is every product gets to a point of maturity and the companies start plateauing and for the companies at the top of the plateau are only growing by a fraction of a percentage e.g. Walmart, Ford, Coca-Cola etc. Their base numbers are so big but are they looking around to see what other companies are nipping at their heels?
...
So the only way to break out of this habit is to experiment. However, for companies with poor product cultures and who like silos, this can be awkward, seen as costly, will the CEO take the risk, do they feel safe? - often companies are scared to take a risk and there are no incentives for innovation or change.
...
In the dip of the curve, CEOs start to sweat and get worried. However, look at where companies are. The table below shows a comparison of the largest companies in the world from 2008 to 2018.
With the exception of Exxon, the top companies are companies that are fasting moving and experiment.
...
| Info |
|---|
If you look at stocks from the S&P, the top 500 performing stocks are shown by the black line at the bottom. The Netflix, Amazon and Google stocks are way above the other companies. These companies constantly deliver, iterate and move forward. They are performing better than the rest. |
...
“All companies will go bust at some point, it's just a matter of when” so for these companies growing at 0.1% a year how do you be a Netflix in a world of blockbusters?
...
Blockbusters had many chances, they had people who wanted to change business models, they sore Netflix coming, they even passed the opportunity to purchase Netflix. The organisation would not take the risk, the excitive team were not prepared to take a drop in the predictable quarter on quarter small growth and we all know what happened to blockbusters.
Kodak is another example, they had the patents and tech for digital photos but they didn't dare to change their existing product lines and they were left behind when consumer habits changed.
Blackberry had its most profitable years in the two years after the iPhone was released however they didn’t react to changes in the market and their profits gave them a false sense of security and then when their numbers started to fall, they were too behind to catch up.