Profits v Growth

I came across and interesting article in the Harvard Business Review, comparing and contrasting the strategies of Microsoft and Amazon.  The former was the gold standard tech company for decades due to the success of their Windows operating system and Office products which were the de facto standards for businesses round the world.  You don’t need too long a memory to remember when Apple were just a tiddler compared to Gates’ baby.  However, there is a theory that their very success has prevented them changing direction quickly enough and thus handing over the baton to Apple who saw and seized the mobile market years before Microsoft tried to get in on the action.  They invented a machine that just made money and they kept feeding it.  It is only now that they have a new CEO that they have begun to change direction, and it looks like Windows 10 will be a much more successful than it’s ill fated predecessor, Windows 8. 

By contrast, another US giant, Amazon, has pursued Growth, and is yet to make a profit, but it believes its momentum will carry it forward and it can be seen that they have been bold in introducing new goods and services and I’m afraid I am one of the many who just keeps using them. 

The argument goes that because Microsoft had so much to lose its strategy was all about protecting the status quo, and thus losing sight of their dynamic roots which gave birth to their golden geese.  Meanwhile Amazon stays much more entrepreneurial, and truer to their vision. 

The lesson is that once you stop changing, and driving change, you are bound to be overtaken by it!

Resources:

1. HBR 

This entry was posted on Thursday, July 2nd, 2015 at 07:00 and is filed under Leadership. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.