How well does our system work? You can use the numerical index to check our blogs from the last big recession.
Much of the world suffered a severe recession from 2008 to 2011. During that time, we wrote more than 250 blogs using publicly available information and our Strategystreet system to project what would happen in various companies and industries who were living in those hostile environments. In 2022, we began to update each of these blogs to see what later took place and to check the quality of our conclusions. To date, we have completed the first 175 of our original blogs. You can use these updated blogs to see how well the Strategystreet system works.
In 2008, the combination of GM, Ford and Chrysler held about 50% of the US domestic automobile market. However, they each had been losing market share for 10 years. Can they reverse this market share loss? If so, how? 13-Toyota’s Good News/Bad News Story Posted 4/17/08 The North American auto market has turned ugly. Normally, analysts expect the industry to sell about sixteen million vehicles a year, about what we sold in 2007. We seem to be on track to sell around fifteen million in 2008. Today GM, Ford and Chrysler are all losing money…
Read MoreA Price Leader lives on one thing: a big price gap. It has to price about 25% below the Standard Leader to win customers who will give up Function and Reliability to save money. In 2008 Aloha, ATA and Skybus shut down because the legacy carriers had cut their costs enough to shrink that gap, and fuel took the rest. Even Southwest felt the squeeze. Once the gap closes, the discounter has little left to sell. This post was first written in April 2008. The Update below shows how the story played out. Posted 4/10/08…
Read MoreGovernment regulation of prices allows customers to enjoy lower prices… In theory. In practice, regulation increases supplier costs and reduces supply, even in the face of increasing demand. Over the long-term, prices either meet supplier costs or suppliers withdraw. In any case, customers as a group face more limited choice. Here is the story of two government initiatives to reduce prices for consumers. Posted 3/31/08 There were two items of interest in recent press reports. Both suggest something about our fundamental beliefs in our economic system. The first instance occurred in California. The State Insurance…
Read MoreA leader can look sturdy right up until it isn’t. Bear Stearns opened this piece back in 2008, gone in a matter of days. Toys “R” Us, Bed Bath & Beyond, and Silicon Valley Bank close it out now — three more failures from the last decade, each one different in its details and identical in its lesson: the company almost always breaks itself first, and the market simply makes it official. Posted 3/24/08 Recently I had the time to visit my old neighborhood in New York, a typical set of brownstones on the upper…
Read MoreIn March 2008, individual investors were paying premium prices for hotel rooms in buy-to-let condo-hotel deals in London and New York — prices set to exploit demand, not to reflect what it actually cost to build the rooms. I called it a bad trade. The market didn’t wait long to prove the point: prices collapsed within a few years, and the same mechanism is still at work today, just showing up as rising costs instead of falling prices. Here’s the full arc — an 18-year case study in what happens when buyers show up at…
Read MorePosted 3/20/08 I ran into a neighbor today. He is an attorney who, for many years, has run a successful practice specializing in working for creditors to recover defaulted debt payments. We began talking about the economy and I, half jokingly, said “at least your business should be up in this credit crisis.” He quickly corrected me. “My business is really getting squeezed now because of this credit crisis.” The credit squeeze affects him at both ends of the market. First, in the demand for his services. His credit-extending clients have drastically reduced their lending…
Read MorePosted 3/18/08 I was fortunate to work for some years with McKinsey and Company. As an alumnus of that organization, I receive regularly the McKinsey Quarterly. Every once in a while, the McKinsey Quarterly emails a feature called Chart Focus. A couple of weeks ago, I received one of these Chart Focus emails where McKinsey was talking about making field teams more productive. The firm has apparently done a good deal of work with large field service teams, such as technicians who install telephone lines or cable T.V. boxes, for example. The chart described the…
Read MoreSouthwest spent decades exploiting a Leader’s Trap the legacy carriers built for themselves — undercutting on price while keeping the flying experience just as good. Basic Economy fares finally closed that gap. What happened next surprised almost everyone: not a single legacy winner, but four carriers converging toward the same narrow slice of the market, while the airlines built to compete on price alone — Spirit and Frontier — collapsed instead. Here’s what the data actually shows happened from 2008 to 2025, and why the messiest merger cost the most share. Posted 3/13/08 A recent…
Read MoreThe story in this blog illustrates several important facets of competition in difficult markets. It demonstrates how market share is gained and lost even while industry leaders think they are competing well. It shows us that in tough markets the primary reason for market share movement is failure by an incumbent supplier. It also demonstrates how a relatively small competitor can become an industry powerhouse, first, by its own innovation and, second, by its competitors’ failures. Posted 3/10/08 Sprint Nextel appears to be in real trouble. A recent Wall Street Journal article offered a…
Read MoreMost of us have not lived long enough to see many dominant industry leaders fall miserably. They do fall, though. In fact, over a longer period of time, many dominant industry leaders fail in leadership. In recent and past years, consider Boeing, Intel, IBM in personal computers, Lotus 1-2-3, Netscape, AOL, Yelp, eBay, RCA and GE in color televisions, Barnes & Noble, Xerox, Blackberry and DeBeers. The market is unforgiving to a company who does not keep up its leadership position. Here is the story of two dominant leaders who failed to keep up. Posted…
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