It seems obvious but …
At the end of WWII General Electric began a study to determine what in a company’s business practices, environment, personnel, strategy, and such were the key elements to success. GE continued this for a number of years and then turned the project over to Harvard. Each year the survey turned up the same answer. It didn’t have anything to do with capital structure, education of management, scale of operations and that sort of thing. The overwhelming driver of corporate success was being in the right market, at the right time, with the right products. Because of the ever consistant answer, the survey was abandoned years ago.
The advent of motor car foreshadowed the demise of the buggy whip. It’s happened over and over again. The classic cases are what happened to big steel and the small farmer along with the manufacturers of the equipment they used. Railroads and interstate trucking is another example. You have to be in the right market to make money. By the way, all these industries restructured and are making money, but nothing like they did in their prime.
This morning on NPR’s business report they had stories on Apple, Google and Chrysler and the UAW. Apple and Google are making mountains of money. Chrysler is asking the UAW for give-backs. What more is there to say?
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