I found it particularly interesting to think of Japanese manufacturers as an example of how operational efficiency does not necessarily constitute or guarantee profitability, or even sustainability. Thinking of how the manufacturing sector from this island dominated the global market through much of the 1980’s and 1990’s thanks to high-tech technological advancements that eliminated the need for human labor, it strikes me that this same sector was unable to keep up its competitive advantage in the new millenium, and instead, is suffering more and more from rivalry from places from China that – ironically – still utilizes relatively more labor-intensive practices in its manufacturing industry. This paradox seems to be well explained by Porter’s claim that OE is not enough, and that strategic positioning is what ultimately helps a company prevail. China’s manufacturing sector seems to thrive on both a variety and access-based positioning – producing the most basic, least-profitable necessities that customers may not be as brand-conscious about (trash cans, plates, flip-flops) but are necessary to everyday life – to reaching markets that are as yet under-served, such as emerging markets.
“You are a fisherman, your startup is your net and your goal is to catch as many of these fish as possible.
If your net (your startup) isn’t well-built and ready for them, the fish will swim right by you and they’ll never come back. It’s tragic and a huge blown opportunity. It happens to so many startups and you can see it in their traffic.”
It’s worthwhile to go look up your competitors’ traffic.
(Mentioned this in class and Jeff asked me to post it.)
During Monday’s class, we didn’t have a chance to talk about TBD, the local-news site started by Allbritton to compete with The Washington Post. When it launched, some people thought it would cover metropolitan Washington as successfully as Politico covers politics.
What do you think of TBD’s new strategy? And why hasn’t TBD been as successful as Politico?
Robert Allbritton was right in his argument that Politico, as an online venture, did not have as much potential for profit without a paper product. Evidently, without an investor like Allbritton who was willing to continue even after a net operating loss of about $5 million in less than 18 months, John Harris and Jim Vandehei would have regretted their decision to quit their high-profile jobs at The Washington Post. I also think it was a bold, though worthy, risk for them to have initially intended to delve optimistically into an exclusively online venture on the eve of presidential elections when others like Politcs.com and Allpolitics.com had started and failed to last beyond presidential campaigns.
However, Harris and Vandehei deserve credit for tactfully assembling a high-profile team that gave Politico a remarkably high startup audience and a monthly average of 3 million unique visitors within months of startup. Unfortunately, the website with a much larger readership accounted for only 40% of Politico’s ad revenue as opposed to the newspaper which brought in 60%. One is tempted to think that an Allbritton-type investor would be indispensable to the success of one’s media business.