Assessing the opportunity
In assessing the future opportunity, a business seeking to retain its position must heed the lessons. Such a business might expect to go through a series of ‘makeovers’; continually reassessing its flexibility in the face of changing competitive pressures. A business seeking to enter a relatively low competition environment might hope to find advantage simply through an open-minded attitude.
The sad tale of the slide rule manufacturer There was once a hugely successful company making slide rules (for those of you too young to remember, slide rules were calculating ‘machines’ using logarithmic scales and highly engineered sliding parts, before the days of electronic calculators), and as there were not too many alternative tools for calculation (logarithmic tables and the abacus being about it), they held their customers, effectively, to ransom. Retailers were obliged to stock this leading brand, schools were obliged to buy them for their pupils who were put through the agonies of learning how to use them, despite the fact that they, like everybody, hankered for something better, something easier to use. Some customers said as much to the slide rule manufacturer, but the letters and the phone calls never made it down to the R&D department. There, they spent their time working on making even better slide rules, with ‘slidier’ slidy bits, clearer printing, a smarter case – and steadfastly refused to listen. Who needed to listen to customers when you made the best slide rules in the world? Change came in the guise of the electronic pocket calculator and customers were only too happy to jump ship – they ‘snapped’. Seen any slide rules lately? Of the competitive forces impacting on the slide rule manufacturer, substitute products might seem the most apparent, but there were other forces at work, forces in the market chain. The end-users were a captive audience for a simpler method of portable calculation – I was one of the throngs of schoolchildren eager to break my slide rule into pieces! The market for electronic calculators was warmed up well before we had ever heard of such things. The successful key account manager, with an eye on a managed future, must learn to understand the significance of their place in such a market chain.
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