All perfectly good questions for Sony.
My point isn't about doing post-mortems per se - they can be quite useful and in so far as you can analyse business failure post-hoc they are a useful tool but it's a bit trite to say the business fails because people were lazy and complacent. I was just pointing out that there can be many reasons why good businesses get outcompeted - and it's not my view that they should be derided for it.
For example, your point about Borders is quite instructive. I don't believe that you believe this for a moment but in essence you're saying that that one single issue alone killed Borders. In fact Amazon started with one huge advantage - no need to maintain real-estate, retail workforce etc etc and your purchase doesn't attract sales tax at source. Borders couldn't have just decided to say close all their retail stores one Saturday afternoon and go online only to compete with Amazon - even had someone wanted to.
Quote:
|
For instance, I believe that the origins of Borders' failure lie in the crazy decision to outsource the web sales business to their direct competitor Amazon. Saved a few million in the short run, brought down a company worth hundreds of millions - in the long run. That is called a lack of vision.
|
No I'd say that's called lack of a magic crystal ball - or even money. They could have set up their own web-business and cannibalised their store business - that's what B&N do with theirs (lower web prices) but it was reasonable then to think it wouldn't work - plus it may actually have been a smart thing to do a deal with Amazon to take a cut of a sale that probably would have ended up with Amazon anyway even if Borders did have their own webstore. For all I know that deal may have been the only thing that kept Borders going as long as it did.
Anyway, at the time Amazon started up there was plenty of debate about how long it would take to get online retail businesses working and a lot of debate about whether bricks and mortar was a blessing or a curse. Blockbuster tried to integrate both and lost to Netflicks - but at the time Netflicks was starting up it wasn't the received wisdom that people would want to watch a movie and then would wait 3-5 days for it - so Blockbusters plan to mix retail and online stores was reasonable - but meant a much more costly option - plus there was B&N in the retail field to compete with too.
As for Sony, seeing as the verdict here is that they have already failed in the eReader market - and I'm not trying to defend anything they have said or done recently - it may well be the case that as a corporation they are just dysfunctional and can't join the dots. I've seen that many times. That said though I'll make the following points just for perspective.....
a) The market for eBooks is still in the process of being established - in much the same way as the market for online music is. That means that issues relating to distribution, revenue sharing, copying etc etc all remain to be resolved by the market. Anyone who really thinks right now that they know how to make that business work - it's a golden opportunity to get in - there's lots of venture capital waiting for you.
b) E-Reader tech is just getting to the point where it provides an experience similar to a book - the technology is still developing and is still under some threat from lcd screens - it's by no means certain that it will continue to advance sufficiently to replace books or justify purchase of a device in addition to a computer/tablet. Could well end up a niche technology.
Personally I wouldn't assume that Sony have ceded the market just yet - I don't think the market is mature yet. After all, Apple sell books too and they're betting big on the iPad.
Finally.... Imagine Apple came out with an iPad with a combination colour pearl e-ink screen and lcd retina display in a package around 16oz or less. How many people would be looking for black and white e-readers then?
I'm off to do something more useful
Cheers!