Another Way Of Looking At The S-Curve Is Via Focus-Expand-Redefine Cycle

"...the fate of fortune 500 companies in 1994......found that a decade later 153 of those companies had even gone bankrupt or been acquired, and another 130 had engineered a fundamental shift in their core cool business strategy. In other words, nearly six out of ten faced serious threat to their survival or independence during the decade, and only about half of this group were able to meet the threat successfully by redefining their core business.

Why do so many companies face the need to transform themselves? Think of the cycle that long-lived companies commonly go through: they prosper first by focusing relentlessly on what they do well, next expanding on that core to grow, and then, when the core has lost its relevance, by redefining themselves and focusing anew on different core strengths. It seems clear that this focus-expand-redefine cycle has accelerated over the decades. Companies move from one phase to another faster than they once did. The forces behind the acceleration are for the most part well known. New technologies, lower costs and shortened product life cycles. The competition - currently in China and India - shakeup all industries. Capital, innovation, and management talent flow more freely and more quickly around the globe"The average holding period for a share of common stock has declined from three years in the 1980s to nine months today. The average life span of companies has dropped from 14 years to just over ten, and the average tenure of CEOs has declined from 8 years a decade ago to less than five today..."

Chris Zook, 2007

A survey in 2004 of around 260 senior executives found

"...more than 80 percent of them indicated that the productive lives of the strategies were getting shorter. 72 percent believed that the leading competitors would be a different company in five years. Sixty-five percent believed that they would need to reconstruct the business model that served their primary customers..."

Chris Zook, 2007

It has been suggested (Brian Corrigan, 2012a) that technology acts in 3 waves, ie

"...the first discovers something, the next spreads its use and the third takes its availability for granted but uses it in ways that were never originally envisaged..."

Michael Malone as quoted by Brian Corrigan, 2012aSome examples are

For example electricity was developed to run mills but later on it was used to power new inventions like refrigeration and microwave ovens. Similarly, the Internet was first built for military and academic purposes; now it has worldwide applications beyond its initial purposes.

Some organisations become a victim of their own success and size. As their success grows so does the size of the organisation and the thinking changes from innovation to protecting the successful product, services, etc. Some examples include the watch industry in Switzerland, smart phone with Nokia, etc. The organisations become maintainers rather than innovators.

The Swiss watch manufacturers dominated this industry until the 1970s when the Japanese and Hong Kong watch manufacturers produced a cheap, quartz watch designed for the low-end, mass market. Meanwhile the Swiss continued to focus on thier traditionally mechanical watches in the higher end markets, ie they had a 97% share of this market but only 3% of the middle market and virtually zero in the mass market (leaving this entire segment to the Asian competitors). By the 1980s, most luxury Swiss brands were under great financial pressure, when Nicholas Hayek became CEO of SMH (which was a combination of the two biggest Swiss watchmakers). His strategy was to offer brands in all 3 market segments, ie mass, medium and luxury. Launching a new brand in the mass market was considered provocative and risky. Some thought this would cannibalise SMH's brands (Tissot, Certina, Hamilton, Mado, etc) in the middle market and could impact on luxury brands (Blancpain, Omega, Longines, Rado, etc)
Hayek was developing 3 separate, business models which involved giving each limited autonomy, in regard to product, design, communications and marketing decisions, but they were not stand-alone entities despite different organisational and brand cultures. Certainly there were the conflicts and trade-offs between 3 different strategies. On the other hand, finance, manufacturing, purchasing, HR, R&D, etc  were centralised under a single identity serving all SMH's brands, ie strong vertical integration policy in order to achieve scale to handle its Asian competitors. 
This approach resulted in the development of Swatch (a new type of affordable Swiss watch for the mass market). The specifications of the new watch were demanding, ie cheap enough to compete with the Asian offerings but providing Swiss quality plus sufficient margins and economies of scale.
"...This forced engineers to entirely rethink the very idea of a timepiece and its manufacture; they were essentially deprived of the ability to apply their traditional watchmaking knowledge. The result was a watch made with far fewer components. Manufacturing was highly automated; moulding replaced screws, direct labour costs were driven down to less than 10%, and the watches were produced in large quantities. Innovative gorilla marketing concepts were used to bring the watch to market under several different designs...... the new product communicating a lifestyle message, rather than just telling time on the cheap..."
Alexander Osterwalder et al, 2010

Swatch provided of a high quality at a low price for a functional, fashionable product.; 45 m Swatches were sold in 5 years; by 2006, the firm celebrated sales of 333+ m watches sold. Watches are becoming a fashion statement as wrist wear; people have watches for different occasions; ending up with a watch wardrobe. Like fashion, the watch is no longer a necessity for keeping time. In fact there is a crossover with fashion houses like Chanel, Louis Vuitton, Drior, Herme's etc moving into watches as wrist wear. Traditional watch brands see this as an additional market; not as a threat.  For example, IWC has established a relationship with high-end men's Italian leather shoes, Santoni; similarly, Jaeger-LeCoultre has links with a foot-wear firm, Christian Louboutin; Hublot linked with fourth-generation Parisian shoemaker, Berluti, etc. They are all trying to find the perfect balance between the watches dial and the leather strap. In addition, some are linking watches with fashion fabric, eg using hand woven linen fibres as an alternative to carbon fibre with colours coming from natural pigments in orange blue, turquoise, purple and orange. (AFR Magazine, 2016) The next disruptive invention could be i) around "smart watches" using silicon’s unique properties like in smart phone. Companies like Samsung (GearS)

 

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