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I don’t understand your argument. Netflix, Blockbuster, Motorola and Nokia all pursued growth strategies, yet the latter three (at least) ultimately failed to m

I don’t understand your argument. Netflix, Blockbuster, Motorola and Nokia all pursued growth strategies, yet the latter three (at least) ultimately failed to maintain their lead in consumer facing markets. So how does that explain the need for perpetual growth? It doesn’t seem connected to your points. And, in the case of Nokia specifically, maybe they would still be a significant player in the handset market if they had pursued profit by investing R&D into a smaller number of good handsets, rather than their growth strategy that, if memory serves, resulted in the release of one janky new handset every week. It’s not like what Apple did was magic; it was mostly just hard work and vision. Motorola and Nokia lost their business by being unfocussed and stupid, not because they didn’t pursue growth.

fragmede 4y ago
Apple's iPhone launch included the vertical monopoly that was their magic. It addressed consumer needs like no other and everyone else was left playing catch-up.
arka2147483647 4y ago
Nokia/Motorola/etc tried to compete and research but ultimately failed. This is not a counterargument, but rather underlines the cutthroat nature of international competition. > And, in the case of Nokia specifically, maybe they would still be a significant player in the handset market if they had pursued profit by investing R&D into a smaller number of good handsets, They picked the wrong horse, as the saying goes. At the time it was not so obvious which thing was going to win.
sokoloff 4y ago
It’s not the pursuit of growth that matters, but the achievement of growth. Companies need to grow in places because they will inevitably be shrinking in some places (as customers age or churn out, as competitors come in to compete in segments, as new substitutive goods compete for wallet share). Even if you want to stay the same size, you will have some amount of growth in your strategy (or you’ll fail).
jasode 4y ago
>Netflix, Blockbuster, Motorola and Nokia all pursued growth strategies, yet the latter three (at least) ultimately failed to maintain their lead in consumer facing markets. So how does that explain the need for perpetual growth? You're laying out a cause & effect I didn't claim. I'm not saying "pursue growth guarantees success" -- which is unrealistic. A variation of your scenario is like asking, "Most novelists pursued growth of their audience but most failed so how do those failures explain why novelists want to grow their audiences?" The # of failures is a different subject from the _motivation_ for growth. My reply to gp was to dissect the flawed premise that profits are predictable and stable. It's that flawed assumption that makes it seem like growth is unnecessary. In other words, even if you want to deliberately create a new company with a "no growth" policy, the outside world has its own freewill and doesn't have to cooperate with your goal. New competitors or changing consumer preferences can sabotage your "no growth" idea and erase the steady-state profits.
- doctor_eval 4y ago
  > A variation of your scenario is like asking, "Most novelists pursued growth of their audience but most failed so how do those failures explain why novelists want to grow their audiences?" Not at all. You said, > Why can't Blockbluster Video stop worrying about growth and just pay dividends from profits? Because an upstart like Netflix competed away Blockbuster's rental profits And I simply don’t see the connection. Blockbuster could have done any number of things to prevent their demise but pursuing a growth strategy in the face of an obvious threat to their business was not one of them. And their size - perhaps achieved from a growth strategy - did not protect them. It’s possible that their size, and the blandness that was necessary to get there - actually made them more vulnerable. (We used to call it “Lacklustre Video”) The same for Nokia and Motorola. It’s a strategy of crap products built en masse to drive growth into every segment which makes a company vulnerable. So I think novelists make for a poor analogy. And I think there are plenty of companies that pursue a sustainable profit strategy rather than a growth strategy. It’s just that you don’t hear about them because they aren’t screaming for your business.
  - jasode 4y ago

fragmede 4y ago

Apple's iPhone launch included the vertical monopoly that was their magic. It addressed consumer needs like no other and everyone else was left playing catch-up.

arka2147483647 4y ago

Nokia/Motorola/etc tried to compete and research but ultimately failed. This is not a counterargument, but rather underlines the cutthroat nature of international competition. > And, in the case of Nokia specifically, maybe they would still be a significant player in the handset market if they had pursued profit by investing R&D into a smaller number of good handsets, They picked the wrong horse, as the saying goes. At the time it was not so obvious which thing was going to win.

sokoloff 4y ago

It’s not the pursuit of growth that matters, but the achievement of growth. Companies need to grow in places because they will inevitably be shrinking in some places (as customers age or churn out, as competitors come in to compete in segments, as new substitutive goods compete for wallet share). Even if you want to stay the same size, you will have some amount of growth in your strategy (or you’ll fail).

jasode 4y ago

>Netflix, Blockbuster, Motorola and Nokia all pursued growth strategies, yet the latter three (at least) ultimately failed to maintain their lead in consumer facing markets. So how does that explain the need for perpetual growth? You're laying out a cause & effect I didn't claim. I'm not saying "pursue growth guarantees success" -- which is unrealistic. A variation of your scenario is like asking, "Most novelists pursued growth of their audience but most failed so how do those failures explain why novelists want to grow their audiences?" The # of failures is a different subject from the _motivation_ for growth. My reply to gp was to dissect the flawed premise that profits are predictable and stable. It's that flawed assumption that makes it seem like growth is unnecessary. In other words, even if you want to deliberately create a new company with a "no growth" policy, the outside world has its own freewill and doesn't have to cooperate with your goal. New competitors or changing consumer preferences can sabotage your "no growth" idea and erase the steady-state profits.

doctor_eval 4y ago
> A variation of your scenario is like asking, "Most novelists pursued growth of their audience but most failed so how do those failures explain why novelists want to grow their audiences?" Not at all. You said, > Why can't Blockbluster Video stop worrying about growth and just pay dividends from profits? Because an upstart like Netflix competed away Blockbuster's rental profits And I simply don’t see the connection. Blockbuster could have done any number of things to prevent their demise but pursuing a growth strategy in the face of an obvious threat to their business was not one of them. And their size - perhaps achieved from a growth strategy - did not protect them. It’s possible that their size, and the blandness that was necessary to get there - actually made them more vulnerable. (We used to call it “Lacklustre Video”) The same for Nokia and Motorola. It’s a strategy of crap products built en masse to drive growth into every segment which makes a company vulnerable. So I think novelists make for a poor analogy. And I think there are plenty of companies that pursue a sustainable profit strategy rather than a growth strategy. It’s just that you don’t hear about them because they aren’t screaming for your business.
- jasode 4y ago