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.
The steel, automobile and airframe manufacturing industries illustrate three different stages of the evolution of mature markets. The theme is that mature markets with strong unions eventually end up with the workforce as the only true stakeholder in the business. Everyone else is secondary, and as a result, the workforce is at real risk of permanent job losses over a period of time. The story of Bethlehem Steel illustrates the end game in this evolution. Through most of the 80s and 90s, Bethlehem lobbied Washington to protect its business against the import of foreign steel,…
Read MoreCogent Communications sells inexpensive, all purpose, digital connections to the business community. Today it carries 17% of all internet traffic. This is comparable to companies like AT&T, Verizon and Level Three Communications. Its revenue this year is on pace to grow by 19%. That all sounds good until you realize that the company expects to lose $25 million this year on the $220 million in revenue it expects. What is the problem? Cogent is a low-end competitor. (See the Symptom & Implication, “Low end products are gaining share of the market”, on StrategyStreet.com.) We have…
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 MoreWould you like to compete in a Fast-Growing Market? Many would say yes because it seems so much less competitive. As Lee Corso used to say, “not so fast, my friend. Here is a story of a Fast-Growing Market. Over the years, the market has had several different leaders. Most of them are gone now. The market should get easier now, right? Still not so fast. Today’s market offers still more competition And a difficult future. Posted 10/6/08 Recently, Nokia announced that its market share was likely to fall off somewhat in the future…
Read MoreThis high-end competitor, with the industries highest prices, has done the implausible, if not the impossible. It has held off large, capable competitors who have offered much lower prices. Despite setting a very high price umbrella, this market leader has achieved the highest market share and the lowest cost in the industry. This company is a rare bird indeed. Posted 9/29/08 In 1903, Horatio Nelson Jackson did something remarkable. He made the first automobile trip across the United States, from San Francisco to New York City. His trip took 64 days. This time includes the…
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 MoreSome product innovations have more power to move market share than others. No benefit can move market share unless it is unique, a one-of-a-kind. Successful Function and Price innovations are powerful attractants for customers. They are so powerful that competing suppliers feel forced to copy them. Other innovations like Reliability or Convenience benefits move market share, but often slowly. They tend to have longer lives as unique benefits. Here is an example of those forces in play. Posted 9/2/08 Recently General Motors decided to provide a bumper-to-bumper full warranty for one year or 12,000…
Read MorePosted 7/7/08 We have two domestic industries in overcapacity: the automobile and the airline industries. We call these industries Hostile markets because returns for most of the players in the industry are low and price competition is intense. Over the last twenty years, we have studied and worked in many of these Hostile markets. In about three-quarters of the cases, market hostility is caused by the expansion of industry competition, especially expansion by low-cost competitors. Hostility in both the airline and automobile industry is the result of expansion by competitors. In autos, the expansion of…
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