It is a real pity (but perhaps natural) that large companies, companies which have been successful for some time, and governments which have been in power for a long time, become complacent. So used to being leaders that they no longer pay attention to their customers, the changing market or other companies. The peril of long incumbency is also that these bodies are usually behemoths, so they cannot adapt quickly even when they realise there is a problem.
I often think of Marks and Spencer as epitomising this syndrome. They were so used to being the place everyone in Britain went that they did not notice or care about the changing high street or the upstart companies coming up behind them. Once they noticed this, they were like an enormous oil tanker which needs huge amounts of both time and space to stop and even more time and space to turn. No matter how many experts or new top executives they brought in, they could not get their customers back. These customers were going to TopShop, H and M, Oasis, Primark – you name it. When they stayed staid, the lost young customers. When they went trendy they lost their traditional customers. They have experimented with price points too, without much luck. People who want expensive undies are probably still going to go to La Perla rather than Marks and Sparks.
Other examples of this were Tony Blair’s government, which spent so much time trying to attract middle-class voters that they alienated their long-term working class base by ignoring them and taking their loyalty for granted. Or Sweden’s Social Democrats who were so used to being in power that they ignored both their voters and up and coming parties who were profiling themselves as the ‘new’ workers’ party. Seven years later, they still have not regained lost ground, despite having several new party leaders.
Another example of this could perhaps be Filofax which responded to the increasingly digitalised planning world by ignoring its loyal core of die-hand planner users and going high fashion, with hugely overpriced designer collaborations. They have abandoned quality inserts in favour of churning out fashionable binders. As hard as they now seem to be trying to reverse plunging sales and listening to their customers, is it too late? They have ongoing ring quality problems but given the scale in which they are produced, is it too late to change manufacturer? Gillio is a small pricey brand but many Filofax users willing to pay for quality and individual service have transferrred some if not all their affections to Gillio, willing to pay more for a good product. They are not likely to make a dent in Filofax profits but Filofax should keep an eye on them.
One example of a company which seems to have been in this position and successfully rebranded itself is Fujifilm. When the digital age took the whole market out from under them, they branched into the unlikely field of skincare – using photo development technology to make revolutionary skincare. Their Astalift range is now the number one bestselling beauty product in Japan. They managed to respond to change quickly and successfully.
Another interesting company is H&M. They started out copying fashion trends but then employed all in-house designers who actually create fashion. They have branched out into home furnishings (H&M home), higher priced fashion (COS), denim (Cheap Monday, Weekday and Monki), and & other stories, which does not really fit any particular category. They started the whole trend of designer collaborations with a collection by Karl Lagerfeldt. Its huge success led to further collaborations with Matthew Williamson, Stella McCartney, Versace, Jimmy Choo and Victor and Rolf among others. They even did very off the wall collaborations with Maison Martin Margiela and Comme des Garçons. They move so quickly that it is hard to imagine them falling into the M and S syndrome, but who knows?
I am really interested to see if Apple will keep their dominance in the phone market, given that Samsung seems to have come out of nowhere to challenge the crown.
