Harvard Business Review
• Shortsighted managements often fail to recognize that in fact there is no such thing as a growth industry.
By Theodore Levitt Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very mueh in the shadow of decline. Others whieh are thought of as seasoned growth industries have actually stopped growing. In every case the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management. business. The reason they defined their industry wrong was because they were railroad-oriented instead of ...view middle of the document...
The exeeutives responsible for it, in the last analysis, are those who deal witb broad aims and policies. Thus: C The railroads did not stop j^rowing because tlie need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because the need was filled by others (cars, trueks, airplanes, even telephones), but hecause it was not filled hy the railroads themselves. They let others take eustomers away from them because they assumed themselves to be in the railroad husiness rather than in the transportation
Harvard Bushiess Review
not limited to the railroad business as sucli (though in my opinion rail transportation is potentially a much stronger transportation medium than is generally believed). What the railroads lack is not opportunity, but some ol" the same managerial imaginati\eness and audacity that made them great. Vxcn an amateur like Jacques Barzun can see what is lacking when he says: "I grie\e to see the most advanced physical and social organi/ation of the last ecnturx go tlowii in shabb\ disgrace for lack of the same comprehensixe imagination that built it u|i. jWhat is laekiiig is I tlie \^i\ ol' tlic companies to sur\i\e and to satisF\ the puhlic l)\ inventiveness and skill."'
had decimated the old movie companies and toppled the big movie moguls. There arc other less ob\ious exainjiles of industries that have been and are now endangering their futures by improperly defining their jiurposes. I shall discuss some In detail later and analyze the kind ot" policies thiit lead to trouble. Right now it may help to show what a thoroughly customer oriented management can do to keep a growth industry growing, even alter the (ib\ioiis opportunities have been exhatistcd; nvn] here tlicie are two examples that have been around for a long titne. 1 hey are nylon and i^lass — spccilically, E. I. duPont dc Nemours & Company and Corning Class ^\•^)rks: Both companies ha\e great technical compctenL-c. Their product orientation is uinjticstionetl. lUit this alone does not explain their success. Alter ail, who A\as more pridcfully protluct-orientctl and proiiuct'Conscious tliaii the crstwliile Xcw l-'ngliintl textile companies that lia\c been su thoroughK massacred? The Dul'onts and the Comings liii\e succeeded not primarily because of their product or researeh orientation but because the\ lia\c been thorotighK eusLojiicr-orieiitcd also. Tt is eonstant watelifLibiess for ojiporttuiities to apply their teehiiical Kno\-how to the ereatioji of eustuiiier-satisfyiiv^ uses which accounts I'or their prixlif^ious output of SLiccessfiil new |n-ocliieLs. WMlJioul a ver sophistieatcd eye on the custiiiner, most itf their new protiuets Jiiight liaxe been wroivj, tlieir sales methotis useless. Aluminum lias also eontinuetl Lo be a j^rowlh industry, thanks to the cfTorls of two wartimecreated com|ianies wbich deliberately set abont creating new custonicr-salisfying uses. \A itliout Kaiser .Aluminum & Cbemica!...