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How to Survive: Read the Market or Just Simply Read What's On Your R&D Presentation

I just read an interesting article about how Nokia actually had research and made internal presentations about devices similar to the iPhone and iPad 7 YEARS BEFORE Apple ever actually introduced the iPhone.  Former Nokia Designer Frank Nuovo rummages through his old notes and presentations, and recalls how his team had all the research and development on where the mobile industry was going -- "the Nokia team showed a phone with a color touch screen set above a single button" [1].  Yet, with all this foresight and research, it was Apple who actually invented the iPhone, not Nokia.  Nokia believed in its core basic phones even to the day Apple turned the mobile industry right-side up in 2006. 

This reminds me, too, of Xerox's PARC (Palo Alto Research Center) back in the 70s when they actually developed the first PC.  Xerox spent boatloads of money in researching and developing new tech including the programming environment we're all familiar with today with mice and the like.  And yet, it was actually Steve Jobs who saw the real value and future of the personal computer, and it was Steve Jobs who took it and ran with it and helped create the world we live in today.  Like Nokia mentioned before, Xerox had the opportunity to expand and grow and really change the technological landscape.  However, both companies failed to realize the real opportunities and read the tea leaves on how to shape their companies.

I'm not going to say companies should change their core competencies.  Instead, I want to highlight the true nature of why so many companies fail.  It's ignorance.  Well, it's more than that, but from the top, those who are actually steering the ship, ignorance and internal squabbles are what prevent companies from recognizing their ships are actually heading into an iceberg.  

In today's world, I'm constantly reminded of large retailers who are struggling to keep up with their more agile competitors who operate e-commerce solutions and direct fulfillment.  Take the Best Buy vs. Amazon battle.  It's apparent that Best Buy's 42.0M+ square feet of retail space is a huge anchor on Best Buy's financials, an anchor e-commerce companies like Amazon are not held down by [2].  With the advent of apps and smartphone penetration of 47% [3] (and of course, it was lower several years ago, but it's explosive growth was readily apparent), you have to think to management in big box retailers would have seen this coming.

Not all is bad, however.  In the case of Best Buy, anyways, the company has shifted much of its growth strategy away from the big box stores and are focusing on smaller standalone stores (SAS).  These stores features much smaller footprints (you've probably seen one in a mall near you) are mobile device-oriented.  Best Buy has been focusing much of its efforts on the growing mobile industry, and it's clear where the company wants to go with 2012 projections of closing 50 big box stores in 2012 and opening 100 additional SAS formats across the U.S. [4] 

Will Best Buy's new shift in strategy work?  Will it even be enough to right the ship towards calmer waters?  Only time will tell.  This much is certain, though: don't get stick your heels too deep in the ground when it comes to your operations.  Oftentimes, the writing is on the walls or in the case of Nokia, the writing was right there in product designs and in presentations -- the business needs to pivot.  Pivot to grow.  Pivot to capture new revenues.  Pivot to survive.




[1] Grundberg, Sven and Troianovski, Anton. Nokia's Bad Call on Smartphones. In The Wall Street Journal. [Website]. Retrieved October 14, 2012, from  http://online.wsj.com/article/SB10001424052702304388004577531002591315494.html


[2] Reisinger, Don. Best Buy has become a soap oprea. In CNNMoney. [Website]. Retrieved October 12, 2012, from http://tech.fortune.cnn.com/2012/07/31/best-buy/


[3] Lunden, Ingrid. ComScore: US Smartphone Penetration 47% In Q2; Android Remins Most Popular, But Apple's Growing Faster. In Tech Crunch. [Website].  Retrieved October12, 2012, from http://techcrunch.com/2012/08/01/comscore-us-smartphone-penetration-47-in-q2-android-remains-most-popular-but-apples-growing-faster/


[4] Epstein, Zach. Best Buy posts mixed Q4 earnings, plans to close 50 U.S. stores. In BGR. Retrieved October 13, 2012 from http://www.bgr.com/2012/03/29/best-buy-posts-mixed-q4-earnings-plans-to-close-50-u-s-stores/

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