There are many recent examples in far west which proves that no leading company can be a leader forever- innovation and focus has the capability to make any small startup reach the top and challenge any existing biggie in the industry. IBM was overshadowed by Microsoft, then came Google which became a headache for Microsoft and recently Apple’s sudden release of i-(Products) one after another is challenging whole of hardware/software industry. Not to forget Facebook which through a single platform now challenges whole of internet industry. Google no longer is the internet powerhouse and there may be other potential startups which may threaten its web-presence in coming future.
While we look at all of these companies and try to understand the true reasons behind their successes and failures, one common reason which comes to my mind is- The Focus or lack of it! It’s a proven phenomena that any company, no matter how big it grows can only do very well in its core industry.
The core strength or domain always remain same for a Big and successful company. And when one tries to de-focus from its core and tries to focus on other competitive areas that’s exactly the point when it also endangers its leadership position. I’ll give examples from above mentioned companies which you all are already aware of, but it will try to give an answer to the question I’m asking here.
IBM was a huge company which made Business Machines for all kind of business needs. Its strength was cracking the problems for bigger corporations and helping them solve their IT needs. It never focussed on solving consumer specific business needs and that’s exactly where Microsoft fitted in. It solved a consumer problem but then later expanded the solution to serve bigger companies as well. But it never imagined that a small internet startup can become a bigger threat to them in coming future. Google came in and in 10 years flat it took over whole of web marketing space. Google’s core focus was its search and search related ads business and it never took social networking seriously. Facebook took the opportunity and has got the largest number of subscribers among all other social network websites. Facebook is now trying to conquer the web by focussing on its core strength only- i.e. social networking.
The main reason for Apple’s tremendous growth in recent times is that it’s focus hasn’t changed in all these years. They are masters in design and usability front and by combining some ingenious marketing skills they can make any product a market leader.
One key thing to note here is the companies as they grow old their core market saturates, and hence their competency becomes obsolete. They then try to capitalize on those markets which are dominated by small but powerful startups, but since that’s mainly because of desperation and not real urge they tend to lose while fighting with these companies.
Facebook has just got one product as against Google’s 20 odd products and hence it can focus better. It would have been better if Google could use its core strength i.e. Search to create something more valuable rather than creating Buzz to compete in social networking space.
So Startups, you have got a fair chance of taking over any of these companies the only challenge is in finding that potential idea and then focussing on your core strenghts to become a leader :). Your thoughts?