But such core strength can sometimes become an

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ways in which computers were marketed. But such core strength can sometimes become an obstacle to seeing the need for change – as proved to be the case when, in the early 1990s, the company moved slowly to counter the threat of networking technologies – and nearly lost the business in the process. Thousands of jobs and billions of dollars were lost and it took years of hard work to bring the share price back to the high levels which investors had come to expect. A common problem for successful companies occurs when the very things which helped them achieve success – their ‘core competence’ – become the things which make it hard to see or accept the need for change. Often the response is what is sometimes called ‘not invented here’ – the new idea is recognized as good but in some way not suited to the business. (A famous example of this was the case of Western Union, which, in the nineteenth century, was probably the biggest communications company in the world. It was approached by one Alexander Graham Bell, who wanted it to consider helping him commercialize his new invention. After mounting a demonstration to senior executives, he received a written reply which said that ‘…after careful consideration of your invention, which is a very interesting novelty, we have come to the conclusion that it has no commercial possibilities … We see no future for an electrical toy’ . 3 Within four years of being invented, there were 50 000 telephones in the United States and within 20 years five million. Over the next 20 years, the company which Bell formed grew to become the largest corporation in the United States.) Sometimes the pace of change appears slow and the old responses seem to work well. It appears, to those within the industry, that they understand the rules of the game and that they have a good grasp of the relevant technological
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developments likely to change things. But what can sometimes happen here is that change comes along from outside the industry – and by the time the main players inside have reacted, it is often too late. For example, in the late nineteethth century there was a thriving industry in New England based on the harvesting and distribution of ice. In its heyday, it was possible for ice harvesters to ship hundreds of tons of ice around the world on voyages that lasted for as long as six months – and still have over half the cargo available for sale. By the late 1870s, the 14 major firms in the Boston area of the United States were cutting around 700 000 tons per year and employing several thousand people. But the industry was completely overthrown by the new developments which followed from the invention of refrigeration and the growth of the modern cold storage industry. The problem is that the existing players often fail to respond fast enough to the new signals coming from outside their industry – as was the case for many of the old ice industry players.
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