11/1/2007

Cutting Their Own Throats1

Filed under: — Bravus @ 11:03 am

This article from Salon’s ‘How The World Works’ is a nice example of the phenomenon I want to talk about. It talks about the American car industries long and stubborn fight against government mandated standards for emissions control and fuel efficiency of vehicles. The article makes the point that it’s a losing fight: while the American car makers fight to keep building big, fuel-guzzling, inefficient vehicles, the Japanese manufacturers build smaller, better built, more efficient vehicles… and the drivers of America buy them. Ford and GM run losses and lose sales… and keep fighting hard for the ability to do so. If they had started working on actually building fuel effecient vehicles sooner – in response to government pressure, or even better before such pressure was needed – they’d be more competitive now.

The other example is the recording industry: if they’d started using and building and improving web-based delivery for music from the beginning, rather than fighting it tooth and nail and trying to stick with CDs as the only medium of music delivery, they’d be in a far different and better position now. In this instance Steve Jobs, iPod and iTunes may have saved their bacon, but being more agile in the first place would have been a much smarter business decision.

Are there lessons here for other industries, such as, oh, I dunno… electric power generation?

  1. This post is named in honor of Terry Pratchett’s fictional salesman of dubious sausages-in-a-bun, Cut Me Own Throat Dibbler. His name comes from his claim that “I’m cutting me own throat at these prices”.