Success & Failure; Market and Company dynamics

Thanks to Tim Banting for these thoughts.

six major external contexts that become catalysts for failure or transformation:-

1. Customers – customer needs change,

2. Technology – technology advances force a change in direction or add complexities,

3. Competition – competitors forge ahead, e.g., Dell overtaking Gateway or Starbucks vs. Maxwell House, et al,

4. Globalization – expansion into new markets increases complexity,

5. Capital markets – e.g., the dollar or interest rates go up or down, and

6. Regulation – the government deregulates, e.g., aviation, or adds regulations, e.g., securities industries.

Effective leadership is all about anticipating and adjusting to external contexts and events.

10 reasons that good companies fail:

1. Status quo management – senior management doesn’t want to rock the boat. Let’s just do things the way we’ve always done it.

2. Success breeds failure – e.g., management becomes arrogant and complacent and alienates its’ customers or doesn’t understand the changing market demands

3. Neglect of emerging markets

4. Non-traditional competition – e.g., niche players create new markets – Starbucks and the specialty coffee movement

5. Internal conflicts – executive level conflicts adversely affect the ability of the executive team to work effectively together,

6. Cost inefficiencies

7. Regulation barriers

8. Rapid technology advances – e.g., Big Blue (IBM) got left behind in the personal pc revolution

9. Rapid deregulation

10. Unexpected events – e.g. recession

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