Quotulatiousness

September 8, 2013

Sometimes the worst possible thing for you is to dominate your market

Filed under: Business — Tags: , , , — Nicholas @ 10:53

Charles Hugh Smith on the dangers of being too big in your own market:

Microsoft is a case study in dominance leading to incompetence and catastrophe. Within the moat of near-monopoly/dominance, competence dwindles to the ability to keep doing what worked spectacularly well in the past, and keeping bureaucratic infighting and divisional rivalries down to a dull background erosion of initiative and talent.

Doing more of what succeeded spectacularly in the past works until it doesn’t, at which point doggedly pressing on with the old formula of success leads to catastrophic failures.

Nokia and Blackberry are recent case studies, but the rise of Google Chrome and smart-phone/tablet computing is beginning to threaten Microsoft’s core business of being the utility monopoly in the PC space.

Dominance means leaders and employees alike lose the ability to experience risk. The customer will take what is delivered, regardless, for the simple reason that alternatives are either unavailable or cumbersome.

[…]

Dominance in any space breeds complacency and enables the luxuries of political squabbling, sclerosis and loss of focus. Competence becomes incompetence, and the infrastructure that fosters creativity and flexibility — that is, a keen appreciation of risk and spontaneity — is slowly dismantled.

That applies not just to corporations but to governments, nations and empires.

H/T to Zero Hedge for the link.

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