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.
Enterprise Rent-A-Car is an astute, well managed company. They have grown to the number one position in automobile rental by using their management skills to beat the likes of Hertz, Avis and National. Now they are starting to close the door on a growing low-end, Price Leader, set of competitors. A Price Leader is a competitor or product that offers below industry-standard performance for a very low price. More than 50% of a Price Leader competitor’s total unit volume is usually sold at price points below the Standard Leader product. This low-end, Price Leader, part…
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 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 MoreFrom 2008 Hyundai has announced that it will offer a luxury sedan in the U.S. market this Fall. The new model, the Genesis, purports to offer Lexus and BMW quality for a price 35% less than those competitors. This is quite a leap for Hyundai. Its reputation in the domestic market is that of a Price Leader competitor selling primarily smaller cars. Its larger, Standard Leader, products, such as the Sonata, sell slowly in the U.S. (See the Perspective, “Why do Leaders Lead?” on StrategyStreet.com for more insight.) The company is making a classic low-end…
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 MoreIn virtually every industry, Reliability is the hard road to success. A Reliability reputation is difficult to achieve and maintain and far too easy to lose. Many competitors will not spend the time and effort. It seems too slow and the payoff too distant. Those that do so, however, often attain high status with customers, sometimes even more than they deserve. Here is an industry where Reliability reigns. The current and emerging Reliability leaders enjoy structural benefits in the industry. Their market shares are also strong and rising. Posted 8/28/08 The domestic auto industry has…
Read MoreIs an unusual environment when a a set of higher priced competitors are able to attack entrenched industry leaders commanding the middle of the market as well as significant shares of both high- and low-priced products. Here is an example of this unusual case. It has not ended well for the industry leaders. It went on too long and cost too much market share. Posted 8/25/08 “Schlitz, the beer that made Milwaukee famous.” The older baby-boomers among us may remember that advertising slogan. It was all over the media in the 50s and the 60s.…
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 MoreHighly cyclical industries can be very difficult places to compete. The US housing market is a cyclical industry. It is also growing slowly. How does a company thrive in that kind of industry? Well, it helps to have solid underlying demand. But the real secret is to increase your market share to create and exploit economies of scale that your smaller competitors simply don’t have. These economies of scale provide you with opportunities for both attractive products and pricing for customers and attractive returns for your shareholders. In this blog, you can see that secret…
Read MoreWhat product Price Point would you like to specialize in during a Hostile market? Sometimes, it seems like competitors offering premium products are in the best situation. Their product prices and profits seem high and comfortable. Think of the high-end of the automobile business in the 90s. In other markets, it seems like the low-end competitors have a long-term advantage. Think of the airline business in the 2000s. In most markets, the middle reigns. There are four typical price point competitors in an industry. Here is an illustration of how three of them compete in…
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