Marketing Myopia: Levitt’s 1960 HBR article
The point of Levitt’s article was that businesses should focus on customer needs rather than business ideas. The illusion that a firm is in a growth industry is a common one. There are no growth industries! Presumptive growth is not guaranteed. They instead need focus on the vision of customer needs. You are not in the business of a particular industry, you’re in the business of customer value creation.
People cannot accurately predict the future and therefore there is no such thing as a growth industry. Management needs to see the broader market; you need to be single minded about what the customer wants.
Self-Deceiving of Management:
- Growth through market segment expansion
- Too much faith in manufacturing
- Preoccupation of careful scientific experiments;
- Too narrow understanding of the customer / narrow industry view.
Examples, Petroleum = Energy not oil!
Corner Store = Food distribution not retail groceries!
Buggy = Transportation not horse and carriage!
Retirement Homes = Childhood for Seniors
If the management understood that they were in the transportation industry not in the horse and carriage industry; they might well have avoid the decline of GM in the 2000s.
Big Bang Disruptions:
The idea with Big Bang Disruption is it is an article that buildings on Christensen’s Crossing the Chasm.
- Make your exit at the right time;
- Jump before your garbage falls on you;
- Wrong attitude or right attitude (is this Big Bang Disruption really for MBAs and academics?)
- They aren’t trying to disrupt you, you’re banker job is just part of the debris.
Unencumbered development: hackathon culture.
Unconstrainted growth: there are the 5 segments by Everett Rogers Crossing the Chasm, now there are trial users.
Undisciplined strategy: start life with a better performance at a lower price. Venmo; faster cheaper. Not trying to disrupt your business, you’re business is collateral damage. Be ready for the fast escape.
- Consult your truth tellers: candor Jack Welch.
- Pinpoint your market entry:
- Launch seemingly random experiments: confuse people
- Survive catastrophic success
- Capture winner-take-all markets
- Create bullet time
- Anticipate saturation
- Shed assets before they become liabilities
- Quit while you’re ahead
- Escape your own black hole
- Become someone else’s components
- Move to a new singularity.
- Strategic Discipline: Compete on all three disciplines at once.
- New-Product Marketing: Market to all segments of users immediately. Be ready to scale up and exist swiftly.
- Innovation Method: rapid-fire, low-cost experimentation on popular platforms (Reddit, Facebook, Twitter)d onto the technology needed to deliver the Model-T.