Repositioning during Troughs?
My reponse to 3/18 WSJ article on How to Innovate in a downturn: For an existing business, the key to survival and capitalize on a downturn is repositioning. It requires ingenuity, creativity, vision and most of all guts to take the plunge. Unmet needs can not be quantified in a spreadsheet and a business plan. An IPOD, a PC or a cell phone could never have been justified in a business plan. But of’ course for every success like the IPOD or a cell phone, there are numerous failures – the path to success is littered with creative destruction. An eco-system that fosters this creative destruction is what fosters growth in a innovative economy like the US.
IPOD was a major reposition for Apple, the cell phone was a major reposition for Nokia. Dell filled the unmet need in PC space and Intel’s repositioning to focus on the micro processors instead of the DRAMs was a stroke of genius. As Mr. Grove put it – only the Paranoid Survive.
Moving forward, the macro economic landscape has changed. The de-leveraging will cause the US consumer to retrench and will no longer be the driver of world economy (about $10 Trillion of the $40 Trillion world GDP was the US consumer I think – 75% of the $14Trillion US GDP).
How can the US consumer learn to live within means, save and not leverage excessively and still maintain a good standard of living? I believe this is where the unmet needs are in the coming decade. Perhaps a reverse process where the savings glut in the US is invested in the consumers of Chindia? Just a thought.
$3 billion people (close to 50% of world population) entering middle class with huge savings, should at some point cause tectonic shifts in the world dynamics (it has been happening, but I suspect this de-leveraging process will speed up the process).
Shaker Cherukuri
Principal
Process Improvement Solutions Inc
317 258 3552
One Response to 'Repositioning during Troughs?'
Leave a Reply
You must be logged in to post a comment.
on May 25th, 2009 at 10:28 pm
I agree with your comment about not being able to rely on the US population to prop up the world GDP like we have in the past. I also agree that China and India growth is going to be a near-term opportunity, but I am also thinking about what kind of roll Africa or South America could play in our future. In all these situations, the US is not competitive in supplying goods to these parts of the world due to the natural and human resource advantages held by these countries. I think the real question is what does the US have to offer these growing economies?