How Companies Fall

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We love to preach to our clients: never stop improving. Companies that fail rest on their laurels, becoming apathetic after a successful product launch. Sure, you probably brought in millions from a specific product; but if you don't innovate it further for your clients, your competitor might just do it for you. McKinsey & Company's S. Patrick Viguerie and Caroline Thompson has this explanation on how companies fail:

First, shifts in demand or superior offerings from competitors undercut the leader's value proposition. Second, competitors come along with acceptable substitutes or prices so much lower that the leader's productivity or cost position is undermined.

Viguerie's and Thompson's explains further that unsuccessful companies tend to throw all their eggs in one basket, and seek growth from it unwisely:

Third, the leader makes some radically mistimed or otherwise unsuccessful big bets. Growth only exacerbates these strategic risks.

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Posted on March 16

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