Every major industry was once a growth industry and every business at one time or another showed growth potential. So why have we seen so many industries slow down and so many businesses fail?
Theodore Levitt, a lecturer in Business Administration at Harvard, pondered on this question and wrote the now famous "Marketing Myopia" article to give his ideas as to why this is happening.
One of the main points raised is that in every case the reason why growth is threatened, slowed or stopped, is not because the market is saturated but because there has been a failure in management.
A very good example would be the railways. The railways did not stop growing because the need for passenger and freight transportation declined (that, in fact, grew) railways are in trouble today not because the need was filled by others but because it was not filled by the railways themselves.
They assumed themselves to be in the railway business rather than in the transportation business.
By improperly defining their purposes many businesses are in danger. Levitt believes that there is no such thing as growth industry, only companies organised and operated to create and capitalise on growth opportunities. Businesses that assume themselves to be riding some automatic growth escalator invariably descent into stagnation.
Why do we see businesses fall into this trap?
. Many businesses believe that growth is assured by an expanding and more affluent population.
. Some believe that there is no competitive substitute for their major products.
. Some tend to over define their area of expertise, leaving themselves no room for change and development.
To avoid this happening businesses must become customer orientated. This will involve far more than good intentions and promotional tricks.
Obviously the company has to adapt to the requirements of the market but mere survival is never enough. The trick is to survive gallantly, not just to smell success, but to see it and feel it in every part of your company and no organisation can do this without a leader with vision that will inspire his workers and his customers.
In order to produce these customers and this overall feeling of success, the whole business must become a customer creating and customer satisfying organism.
The only way this will ever happen is if the managing director or chief executive makes this customer orientation felt in every facet of the business. This must be done with the kind of flair that will excite and stimulate people.
The chief executive has full responsibility for creating this environment. It is he/she who must set the company's style, direction and goals, for without these how can we possibly expect our customers to see us as a worthwhile investment.
We all understand that marketing is certainly a step in the right direction, but what we now need to realise is that marketing is the only way forward for any company. Get that right and the rest will seem easier to tackle.
