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.
Does unionization have a promising future in international markets? Unionization in the US private sector has fallen from about 20% 40 years ago to below 10% today. Meanwhile, unionization levels are much higher in Europe and Japan. Their rates of growth and returns on investment are also lower. The US seems on average to hold a distinct edge. The story below offers some issues to consider around unionization. Posted 10/30/08 The steel, automobile and airframe manufacturing industries illustrate three different stages of the evolution of mature markets. The theme is that mature markets…
Read MoreHonda has the most flexible auto plants in the U.S. It does so with simple modifications to the robots and assembly lines used to assemble its products. Of course, this high degree of flexibility is the result of significant investment over many years. Part of this investment included the company’s efforts to ensure that vehicles are designed to be assembled in the same way, even if the parts of the vehicle differ. This flexibility has become a key strategy advantage for the company as the auto market gyrates due to volatile gas prices. Honda has…
Read MoreOvercapacity and Hostility can last a very long time. Here is an industry that was Hostile for more than two generations. Leaders came and went. Innovations brought helpful changes or faded away to irrelevance. Managements tried many approaches to reduce competition and improve prices and returns. Finally, these many market changes had their desired effect. The blog is a short reprise of the story. Posted 10/9/08 For once, the airline industry Standard Leaders, the legacy airlines seem to be improving their positions compared to the Price Leaders, the discount airlines. In our system of analysis,…
Read MoreWild price swings in a market can be scary to live through as a company. They do have one advantage for a management trying to plan its future, they identify the high-cost suppliers responsible for determining current prices. The swings in prices, responding to changes in the demand/supply balance, cause high-cost competitors to expand or curtail production. The low-cost producer always can expand at current prices. The dynamics of pricing in a commodity industry are straightforward. The price of the commodity is the total cash costs of either the next supplier into the market or the…
Read MoreAt one time this inventive and disruptive company led its entire industry. However, industry evolution overtook it as much larger and more aggressive competition displaced it. While it is profitable and growing, every year takes away more of its market share and potential economies of scale. Today, it is in a comfortable niche. Without significant Price competition, it should be able to hold its preeminent position in its niches. The story explains how this all happened. Posted 9/15/08 Over the last two years, eBay has raised its prices to improve its financial performance. Not that…
Read MoreFew companies can sustain a devastating loss to their reputations and still survive. Here is a company who suffered such a loss and continues to stumble even today. It is simply too big to fail. Posted 9/4/08 Boeing and its key union, the International Association of Machinists and Aerospace Workers, are clashing over negotiations for a new contract. The company is enjoying some of the best of times. As a result, the union has unprecedented leverage. So, what do these negotiations tell us? The odds seem stacked on the union side. Boeing is in one…
Read MoreAn industry leader falters in its Reliability reputation at its extreme peril. Consider Sears as a poster example. Here is the story of an industry leader that suffered from a disastrous Reliability performance several years ago. It did manage to halt its market share decline. But, by the time it did so, it had fallen well behind its competition. Its story shows us how difficult it is to recover from just a couple of years of very bad performance. Posted 8/16/08 Recently, United Airlines announced that it would reduce its service to some of the…
Read MoreHow does an industry become attractive? In some industries, increased government regulation provides significant benefits to the industry’s largest competitors. If these industry leaders control the turnover of their largest customers and maintain pricing discipline, returns can be both stable and high. Here is an example of these rules in action. Posted 8/7/08 The leading waste management company, Waste Management Inc., has just offered to buy the number three ranked competitor, Republic Services. This offer preempts Republic’s offer to purchase the number two competitor in the industry, Allied Waste Industries. Before these acquisitions, the waste…
Read MoreGM, this once great company and clear industry leader, is slowly fading away. Management might have a small chance of reviving the fortunes of the company…but can they get their unions to join in the effort? Reread the 2022 blog update for a hint. Posted 8/4/08 You have to feel sorry for the beleaguered leaders of General Motors. The company is suffering through a perfect storm. Automobile sales this year will be fourteen million units, down from the sixteen million the company had expected. Down even more are sales of large SUVs and trucks, on…
Read MoreEconomies of scale should exist in every industry. The industry’s largest competitors are those most likely to benefit from economies of scale. Surprisingly, in many industries the market leaders earn returns below those of some of the industry followers. As one of my clients pointed out to me many years ago: economies of scale don’t just happen, you have to create them. How can we see economies of scale at work? More importantly, how can we measure and manage them? Here are some thoughts on that important question. Posted 7/31/08 Economies of Scale are important,…
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