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.
Ever since deregulation, the airline industry seems to have been in overcapacity and Hostility. Masses of low-cost carriers entered and challenged the legacy airlines. It has been a 40-year war. There have been apparently good companies come and go. Many original carriers failed and disappeared. But it appears that the war has ended. There are four major players who have survived: American, Delta, Southwest and United. Every day, Southwest, the leading low-cost carrier, looks more like the three other legacy airlines. That should not surprise us given how well the three legacies have climbed to…
Read MoreEver since deregulation, the airline industry seems to have been in overcapacity and Hostility. Masses of low-cost carriers entered and challenged the legacy airlines. It has been a 40-year war. There have been apparently good companies come and go. Many original carriers failed and disappeared. But it appears that the war has ended. There are four major players who have survived: American, Delta, Southwest and United. Every day, Southwest, the leading low-cost carrier, looks more like the three other legacy airlines. That should not surprise us given how well the three legacies have climbed to…
Read MoreCan an industry leader remove capacity in order to induce a price increase? Many people believe that they can. Here is a story where it seemed to work. It didn’t work for long. The industry leaders were unable to prevent others from stepping in where they had withdrawn. A trend we have seen in many industries. Posted 6/26/08 I am surprised and confused by the airline industry today. All the legacy airlines have announced substantial capacity reductions, in some cases by more than 20% of capacity. For example, United Airlines plans to ground 100 of…
Read MoreA leader may be dominant in its industry and still fail. There have been many examples in recent years, including Sears and GM. The RV industry has seen a dominant leader, doing many things right, fail outright. Fortunately, a new set of leaders emerged who did even more things right. Here is the tale. Posted 6/9/08 The RV market is in hostility. A hostile market sees low returns on investment, even for the industry leaders. One of the largest players in the market, Fleetwood Enterprises, has seen five straight years of losses. Another leader, Winnebago…
Read MoreTwo strong industry leaders, both highly successful in other markets, decide to combine their subsidiaries in one market in order to gain market share and improve economies of scale. This made some good sense a few years ago. It didn’t turn out quite the way they hoped, though. We cover the story and four separate blogs, numbers 23 – 26. Posted 6/4/08 This entry is the last in our series of four entries on the HP/ED deal. The Setting Hewlett Packard has proposed a take-over of EDS, in order to improve its services, revenues and…
Read MorePosted 5/1/08 Low-end competitors don’t think like industry Standard Leaders. As a result, they often blow big holes in the leader’s plans. For twenty-five years, from the early 70s until the late 90s, the color television manufacturing market was one of the worst places on Earth to compete. Those companies who did survive, and there weren’t many, became hard-bitten competitors with no illusions about the inevitability of success of even the largest companies. The two largest U.S. competitors, RCA and Zenith, are now nearly-forgotten names. GE was another titan victim of the inexorable pressure of…
Read MorePosted 4/28/08 The automobile insurance market has seen price declines since 2006. During this declining-price period, Allstate has done well, gaining market share by offering innovative pricing. The company instituted a program called “Your Choice Auto”. It launched this program in 2005, just before industry prices started to fall. This Your Choice program offers drivers a specific benefit in return for a slight premium in the cost of their insurance policies. One option in Your Choice offers a 5% rebate on premiums paid by drivers who remain accident-free during the term of the insurance. A…
Read MorePosted 4/10/08 After thirty years of unmitigated success in the airline industry, the smaller discount airlines are starting to fall by the wayside. Aloha, ATA and Skybus recently shut down. Others are likely to follow. Even Southwest is feeling the pressure. None of these discounters is able to fully recover the burgeoning cost of fuel. What does this really mean? It means that the legacy carriers have finally reached the point where their cost structure is low enough that the prices they charge are very difficult for the discounters to get a substantial discount against.…
Read MorePosted 4/7/08 10-The Company Did Not Get an Invitation Remember the grade school experience when you learned of a party to which you did not receive an invitation? For most of us, that was a hurtful experience. But the failure to receive an invitation can cost real money in the business world, both now and in the future. In our research, we have found that there are two sources of failure when a new piece of business becomes available. The first is an invitation failure. A company did not get invited to bid. The second is evaluation failure. A…
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 Commissioner asked Allstate to…
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