Posted on Thursday, September 10, 2009
Title insurance is such a weird beast. While health insurers pay claims that equate to 90-plus cents of every dollar of premiums they take in and property and casualty insurers pay out some 65 cents on the dollar, title insurers pay four-tenths of a cent, according to a major study conducted by the California insurance commissioner. Yet title insurers are heavily protected by archaic laws and regulations that make it hard for consumers to see how little they’re getting for their premiums and that deter competition.
Posted on Tuesday, August 4, 2009
But the fact is that the Internet is wreaking real havoc in some areas, and organizations sometimes have their head in the sands. As we put it in “Billion-Dollar Lessons,” they have adopted a strategy of Staying the (Misguided) Course.
The latest example comes from a recent report from the U.S. Government Accounting Office about the U.S. Postal Service.
Posted on Monday, August 3, 2009
Just because something is in bad shape apparently doesn’t mean it can’t get worse. Having reported recently that big music labels are losing new singers and bands to Internet-based businesses, the New York Times now speculates that the music business will pretty much just go away. As this article asks, why pay for music at all if you can just stream it to your listening device free?
There’s a lesson there. Many companies can’t bring themselves to imagine Armageddon. They can maybe foresee a bad year or two, but not a scenario that would wipe out their core business. Yet Armageddon is possible.
Posted on Wednesday, July 22, 2009
An article by Brad Stone in yesterday’s NY Times provided evidence of another inexorable, Internet-fueled trend that threatens a long-dominant business model. The victims this time are the major record labels, which have had a long hold on the making and milking of recording stars.
It’s no secret that the Internet’s mix of free and cheap individual tracks is killing physical album sales (which fell 20% last year). In addition, established stars like Radiohead, the Beastie Boys and Barenaked Ladies have been using the Internet to go direct to music buyers, cutting traditional record labels out of the process and keeping a much larger share of the revenue.
Posted on Monday, July 20, 2009
We’ve updated “Perfecting the Art of the Deal,” a working paper that applies our research to potential mergers and acquisitions. Read the introduction below and click to download the entire article in PDF form.
Posted on Monday, March 30, 2009
We’ve finalized two working papers that apply our research to today’s business challenges. The first, “Beyond Fear and Greed,” is an overall look at current strategic opportunities and pitfalls. Read the paper here, or download it in PDF form. The second paper, “Perfecting the Art of the Deal,” applies our research to potential mergers and acquisitions and is available in a separate blog entry.
Beyond Fear and Greed:
Capitalizing on Opportunities in the Current Crisis
By Paul B. Carroll and Chunka Mui
Warren Buffett says his guiding principle is to “be fearful when others are greedy and greedy when others are fearful.” There’s certainly plenty of fear out there, and thus plenty of opportunities to get greedy. Greed, however, does not necessarily translate into wealth. In this article, we draw on our two years of research into more than 2,500 major corporate failures and our related consulting work to describe the landmines that companies are mostly like to hit as they try to capitalize on today’s market turmoil. We also lay out a process for ensuring that greed does not send you down the wrong path–increasing the chances that you’ll pick a prosperous road.
Posted on Thursday, October 9, 2008
Netflix’s recent announcement that it will sell Disney and CBS television exemplifies how Netflix is avoiding the major strategic error that can occur when a company stays the course in the face of a serious threat.
In Netflix’s case, that threat is easy to see: At some point down the road, we’ll all stop getting our movies in the mail in little red envelopes. Instead, we’ll download our movies directly onto personal computers, televisions or mobile devices such as an iPod or a phone.
The temptation for Netflix is to hang onto DVDs and little red envelopes as long as possible.