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A Look At Some Corporations That Are Doomed and Some That Will Thrive Into The Future

15 December 2008 2 Comments

So many companies and industries are in the news these days, and it seems that if they are in the news, it’s a bad thing.

Corporations / Businesses of the Past

The Big Three: GM, Ford, Chrysler

These three companies represent the old business model of manufacturing that simply cannot work anymore.  With increased global competition and more and more entitlement/legacy costs weighing down the companies, it is simply a flawed business model.

Add to the equation a lack of long term strategic vision and poor management and you have a disaster of an auto industry.  Are we surprised that they continually need government assistance?  What a joke.  People regard the Chrysler bailout years ago as a success because it “turned the company around”.  Really?  What if the government let them go down.  Would the result be a better auto company in its place or even a better, efficient Chrysler?  Maybe.  Either way, these companies are doomed unless the entire model and structure is significantly altered.  Don’t count on it happening, however.

The Cable Industry

Does any other young person find it interesting that we still need a giant, ugly box next to our TV in order to watch TV?  It seems the cable industry is either destined for a serious innovative leap or perhaps a disintegration as other services like internet-based television or satelite television move forward?

My local provider, Brighthouse, in Florida actually required me and my roommate to both appear in person at a local office in order to switch the account into his name.  Talk about customer service!  We had to fight traffic, leave work and appear before a completely incompetent customer service representative in order to switch a name on a stupid account!  Talk about archaic.  At least with DirecTV, which I use now, the customer service is fantastic and the technicians are brilliant.

Newspapers

Talk about a dead industry.  The New York Times is broke, so they are mortgaging their real estate.  The Tribune is about to go bankrupt and countless other major newspapers across the country are either broke or bankrupt.  Again, in the internet age, this is a flawed business model.  People want their information faster and they want it free.  As for classifieds, newspapers are dead with the rise of Craigslist, eBay, etc.

The 21st Century Corporation

Google and Apple

Google: What an amazing company.  They basically resurrected the internet after the dot-com bust through their innovative, transformative advertising platform.  Also, Google allows their employees to spend 20% of their work week working on whatever project they want in Google.  This fuels company moral and innovation.

Tied with Google in the innovation department is definitely Apple.  Let’s see, Apple continues to take market share in the PC arena, completely transformed the music industry to the dismay of record companies, became the #1 retailer in terms of volume of music (ahead of Walmart), became the #1 retailer in terms of sales per square footage (ahead of Tiffany’s) and now is the #1 seller of smartphones by revenue.  Uh, hello?  Do you still not own Apple’s stock?  Even at these levels?

Wal-Mart

When it comes to global supply chain, Wal-Mart stands alone (sorry Dell).  If you haven’t read or watched a show about the Wal-Mart distribution methodology, you need to do it.  It will blow your mind.  Their incredible distribution network allows them to offer lower pricing on products than any of their competitors.

While, they have received some bad press over not paying their employees enough, I think this is ridiculous.  The American public should be happy that Wal-Mart provides as many jobs as they do.  Did you know their executives share hotel rooms with eachother at the cheapest motels when they travel for business?  Picture the CEO and COO splitting a $49 a night room on business.  A little different than AIG, yes?

Accenture

This is a company that I have first hand experience with: I used to work for them.  This company is leading the way in making companies more efficient and better run.  Through innovative information technology, Accenture is helping companies become transformed into 21st century corporations.

Since companies pay Accenture to help them with their businesses, you would expect Accenture to be pretty lean and efficient themselves when it comes to Accenture internally.  Well, that would be correct.  Accenture has fantastic internal systems such as a Knowledge Exchange in order to share ideas across the thousands of consultants around the world.  Encounter a problem on a project over in China, check the Knowledge Exchange and you might find the solution from a colleague in San Francisco.

Also, Accenture has a system that allows its employees to reserve office space at the local Accenture office no matter what city they are in.  No matter where I go, I can get a great work space in the Accenture office.  Similarly, many of the non-consulting workforce of Accenture, such as HR, work from home which allows increased flexibility for employees and less Corporate office space needed.

Why Analyze These Companies?

It is worthwhile to recognize the successes and failures of these big American companies for a number of reasons.  For one, perhaps you are looking for a job and you want to apply at some of the cutting edge, globally competitive companies. There is a reason that MBAs are flocking to companies like Google instead of the traditional MBA path of the past such as investment banking and management consulting.

Or, perhaps you are an entrepreneur and you want to borrow some of the ideas that these companies are implementing.  Lastly, you might be an investor looking to own great companies for the long haul.  If so, definitely stay away from the archaic business models of the old American corporations and look to the 21st Century Corporations like Google, Apple, Wal-Mart and Accenture.

2 Comments »

  • jimbo jenkins said:

    Kevin,

    You bring to light that more MBA’s are going to companies other than the investment firms. what do you think is the future of the investment banking and financial services sector?

  • J.Walker said:

    Hopefully these successful companies are not bogged down by the incoming Socialist party.

    There are comparisons to be made with companies(only to be turned in to state owned companies) that existed in the Socialist Soviet Union and the politicians that want to bail out the private sector banks and auto.

    What kind of model do we show young Americans when private companies millions in debt are borrowing from our Gov’t, which is trillions in debt. The Gov’t has no fiscal accountability, they have no customers to serve in order to keep their cash flow…all they have to do is tax more.

    How would you spend your money if you had a constant flow of cash with no effort? Probably very irresponsibly.