Title: Orlando, FL – February 6, 2012
Location: Orlando, FL
Archive for January, 2012
Posted by Nick on January 24th, 2012 | Permalink
Posted by Dennis on January 20th, 2012 | Permalink
You have probably heard the “Boiling Frog” analogy. It goes like this: If you put a frog in boiling water it will jump out, but if you put the frog in cold water that is slowly heated the frog will not perceive the danger, and will eventually die.
In this case the Frog was Kodak, and the water slowly coming to a boil for the last twenty years is the digital age where our photos are images and our cameras are phones.
Kodak failed to interpret the changing marketplace, innovate their product offerings, or adjust to new markets. They had a critical failure, and it can happen to every one of us who “entrepreneur” for a living, so watch out.
Some amazing stats to consider
Kodak was founded in 1880 and it was considered a technological marvel of its time. They enjoyed complete dominance and by the mid 70’s Kodak sold 90% of the film, and 85% of cameras in America.
Until the 1990’s, Kodak was regarded as one of the world’s top five most valuable brands.
Ironically, it was Kodak that made the first digital camera in the 70’s, but they were unable to adjust to what the digital camera marketplace would do to them. For a long time Kodak had a great working model – selling cheap cameras and expensive film.
Digital technology eliminated most film sales, and smart phones have taken oven cameras – how did Kodak not position themselves as a partner for all these smart phones? How come Kodak didn’t become the equivalent of “Intel Inside” to the smart phone companies?
Fuji, Kodak’s main rival didn’t get crushed, they found new markets to make money in, and only 11 years ago film made up 60% of their revenue – now it accounts for next to nothing. Fuji diversified into cosmetics, and optical films for LCD flat screens – they enjoy 100% market share.
McDonald’s to McCafé
McDonalds is a great example of a big company getting it right. I live in Canada and McDonalds spent CDN 1 billion remaking many of their restaurants into an up branded, more “coffee shop” feel. Gone are the cafeteria seats; in are couches, comfortable chairs, softer colours. Everything says “Be our guest.”
They know that their market place has changed – they are not the dominate player anymore. In the 70’s your fast food options were McDonalds and maybe Burger King and back then it was generally understood that only freaks and weirdoes went there.
Fast forward to 2011/2012 and if you walked into a McDonalds in Canada (and I read Australia) you’d fall over.
McDonalds has moved to delivering a more relaxed experience – they know that the entire backdrop of business in general has shifted to delivering a more enjoyable, client-first experience and they will not be left behind.
They want you to come in, sit down, and stick around. They obviously figured out that there is a lot of profit in coffee and they want to pick up some of that and to that end they are becoming more of a coffee house than a fast food joint.
McDonalds is again the pioneer and all the other “burger joints” are going to have to move quickly to catch up. When you are playing catch up, you often lose. Too much demand on energy, money and time is spent and the spiral begins.
I keep wondering if one day Microsoft will announce they bought a company like Maytag or Kenmore or some other major home appliance maker. We know that sooner or later our refrigerator is going to tell our smart phone that we need more eggs, and then it’s going to complain to the toaster about how we can be distant and non-communicative. Oh sorry, that’s the espresso maker.
All jokes aside this idea of Microsoft buying a home appliance maker is a perfect example of strategy extension, and it’s also a perfect example of what Kodak failed to do.
My point is – the world is wondering when Microsoft is going to solve the smart phone issue, and I bet they have moved on. They’ll make some money in smart phones but I bet they are looking further down the field than that.
So how warm is your water?
In the 1980s financial advisors sold products, in the 1990s it was specific interest and today its experience. You are still in the business of making money grow, but now the expectations of the market place is that it will be a pleasant, unique, and very personal experience.
In short – it’s no longer a cute idea to evolve into an experience driven financial planning practice, its completely necessary to your survival. Anyone can get anything – products, information, absolutely anything, online in less than a minute and that isn’t a lie.
What do your clients need now? You should have known that yesterday, the question is what do they need tomorrow?
Is it getting warm in here?