Re: Sustainable competition LO1729

Doug Blair (dblair@ix.netcom.com)
Wed, 21 Jun 1995 17:01:54 -0700

Replying to LO1682 --

>From Jack Hirschfeld's L01682:

>Indeed, many successful family businesses have grown to be very large
>companies only to perish when the families involved refused to expand
>further, since that would have meant external investment (going "public")
>and dilution of family ownership/control.
>
> ... I know assertion does not make it so, but I have never met
>a businessman who sought stability by denying growth.

Agreed, completely. Now we're back to learning organizations - I knew we'd
get there eventually. :)

I'm wondering if the drive to grow and the drive to compete have a common
denominator. (Of course I suspect they do, otherwise why bring up the
question?) So if we see a company that *apparently* perished because they
refused to expand, could it be they *really* perished because they did not
have the drive (or talent) to compete and protect their own turf?

For example, consider two chains of grocery stores that wants to stay
regional one on the west coast, and one on the east. Then a national chain
tries to move in. (To keep it simple, let's assume that the regional
chains are large enough to have the same economies of scale and
capitalization per store.) Can the regional chains stay in business
without growing?

Well, Regional-West doesn't want to grow. But gosh darn it, they are not
going to cave in to those big national bullies. They have the creativity,
talent, and drive to do whatever is necessary to keep the nationals out.
Valet parking, deliveries, fresh barbeque on the pit during summer, fresh
advertising, local fun runs, corn-fed beef with no steroids, French wines,
and a Starbucks-run coffee bar.

Now Regional-East never really wanted to grow. They stick to business as
usual - if it was good enough for the 50's, it's good enough today.
They're sure their customers will stay loyal. Whoever heard of putting a
bank branch in a grocery store for heaven's sake?! Yeah, right.

Who's the learning organization that stays in business?

This is almost a chicken/egg situation. Does one grow in order to compete,
or compete in order to grow? I propose that the two attitudes are so
interconnected we often don't notice them as separate traits. Hence we
assume companies fold because they did not grow, when in fact they simply
didn't learn to compete.

(Of course the capitalization/economies assumption above is a huge
assumption. But if we get into that, it's not longer an issue of growth,
but one of funding. That sounds like a different discussion group.)

Possible?

Take care,

--
Doug Blair    dblair@ix.netcom.com