| What does the following list of companies | | | | destinations and expansion resulted in many |
| have in common?A&P | | | | regional carriers (Republic, Piedmont, etc.) |
| | | | being gobbled up by the majors. Out of the |
| Hudson Motor Car Co. | | | | changing landscape for air travel Mr. |
| | | | Kelleher saw opportunity.Mr. Kelleher created |
| Montgomery Ward | | | | and launched Southwest Airlines to address a |
| | | | gaping need. Southwest utilized a business |
| TWA | | | | model that reflected the changing landscape |
| | | | in providing air service. The major carriers |
| Horn and Hardart | | | | utilize complex pricing models that try to |
| | | | maximize seat yield revenues. Southwest |
| Studebaker | | | | posted one low price for every seat on a |
| | | | flight. The major airlines were totally union |
| Indian Motorcycle | | | | shops. Southwest was non-union. The major |
| | | | carriers flew a mix of plane types. Southwest |
| Bonwit Teller | | | | flew only the Boeing 737 (this streamlined |
| | | | service and parts expense).Very quickly the |
| Woolworth | | | | flying public recognized that a Dallas to |
| | | | Phoenix flight that was $579 on American, and |
| Bethlehem Steel | | | | $149 on Southwest, was a no-brainer. |
| | | | Southwest remains ahead of the curve with |
| Polaroid | | | | standardized policies, simple restrictions, a |
| | | | feel good fun loving staff, hedging contracts |
| LTVThese Companies were successful, | | | | for jet fuel purchases and the promise of |
| recognizable brands in their respective | | | | value for money on each flight.Southwest |
| categories. They were publicly traded and a | | | | capitalized on the changes it recognized was |
| number were in the Nifty Fifty in the 1970's | | | | coming in the air travel universe. Today, |
| and/or the Dow Jones Industrial Average. The | | | | there are a number of airlines utilizing some |
| element they all have in common (and with | | | | or/all of the Southwest model and virtually |
| hundreds of other equally recognizable names) | | | | all are successful. Easy Jet, Jet Blue and |
| is that they did not innovate. They created a | | | | Ryan Air in Europe are booming while the |
| static business model and did not anticipate | | | | old-line giants all over the world are in |
| that there were newer, better ways to | | | | desperate straits.Proctor and Gamble is a |
| implement new technology and strategies.Let's | | | | wonderful example of an old alpha enterprise |
| look at two old, established retail | | | | that is constantly re-inventing itself to |
| categories and how the ability to innovate | | | | reflect changing market conditions. Dell |
| has determined contemporary success or | | | | Computer, MicroSoft, Intel, Research in |
| failure.Music Stores | | | | Motion, Nokia and many more are examples of |
| | | | businesses (all little more than 20 years |
| Recorded music retail has always been a | | | | old) that innovate, change, anticipate and |
| competitive market. Tower Records followed | | | | succeed. They were all small startups only a |
| the national chain concept, offering a broad | | | | few years ago.For entrepreneurs, the ability |
| range of music styles and competitive | | | | to innovate and keep ahead of the field is |
| pricing. Mass marketers such as Target and | | | | crucial. When analyzing the potential for a |
| Best Buy offer music as well, typically only | | | | successful market placement the ability to |
| the more popular artists, narrow and deep. | | | | create a cutting edge business model is so |
| Every city had a local shop, sometimes | | | | important. If your goal is to open a male |
| specializing in a specific area of musical | | | | clothing shop and one already exists in the |
| taste. The underlying similarity was that a | | | | area you have chosen, you have a problem, |
| customer came into the store, made a | | | | unless you can differentiate your unique |
| selection and the purchased the disc.Then | | | | selling proposition. Maybe this can be |
| along came the inter-net. The ability to | | | | accomplished by offering a tailoring |
| protect trademarks and copyrights was | | | | operation for hand cut suits, or specializing |
| believed to trump this technology. Artists | | | | in formal wear.Whatever your product or |
| and record companies believed that legal | | | | service, define a business model that |
| protections would enable them to continue as | | | | separates you from your head to head |
| always: selling an album, with one or two | | | | competition. Do not play the price game. |
| hits, for $20 to $30. Software was written | | | | Lowest price is almost always a temporary |
| enabling the music consumer to cheaply, or | | | | benefit, someone will come along that can |
| for free, download specific hit songs while | | | | produce cheaper, faster, better. Your goal |
| avoiding the filler cuts. The Napster effect | | | | should be the offer of a benefit that the |
| has revolutionized the music industry.Napster | | | | customer will value, desire and not find |
| is a disruptive technology. The world of | | | | immediately available. Then back up the |
| music retail was stood on its head. Legal | | | | benefit with superior service and the promise |
| fights and challenges are still being fought. | | | | of continued new cutting edge innovation. |
| However, chains like Tower Records are gone. | | | | Innovate or die!Geoff Ficke has been a serial |
| The marketplace did not allow for a rigid | | | | entrepreneur for almost 50 years. As a small |
| system to thrive in the face of innovation. | | | | boy, earning his spending money doing odd |
| Tower did not stay flexible, anticipating | | | | jobs in the neighborhood, he learned the |
| technology advances and changing tastes. | | | | value of selling himself, offering service |
| Trying to sell albums with 15 cuts, when the | | | | and value for money.After putting himself |
| consumer only wants to hear and pay for two | | | | through the University of Kentucky (B.A. |
| hit songs, is an obvious loser.Airlines | | | | Broadcast Journalism, 1969) and serving in |
| | | | the United States Marine Corp, Mr. Ficke |
| Until the late 1970's the airline industry | | | | commenced a career in the cosmetic industry. |
| was protected by Federal Government | | | | After rising to National Sales Manager for |
| regulation. This enabled the airlines to | | | | Vidal Sassoon Hair Care at age 28, he then |
| artificially inflate fare pricing. Hub and | | | | launched a number of ventures, including |
| spoke systems were created. Each major | | | | Rubigo Cosmetics, Parfums Pierre Wulff Paris, |
| carrier had a geographic area of strength | | | | Le Bain Couture and Fashion Fragrance.Mr. |
| (Delta the southeast, USAir the middle | | | | Ficke and his consulting firm, Duquesa |
| Atlantic, American the mid-west and Latin | | | | Marketing, Inc. ( has assisted businesses |
| America, etc.) that they dominated. Unions | | | | large and small, domestic and international, |
| were aggressive and the carriers were | | | | entrepreneurs, inventors and students in new |
| profitable so the need to squeeze costs was | | | | product development, capital formation, |
| not urgent.When de-regulation occurred in | | | | licensing, marketing, sales and business |
| 1978 the major carriers did not anticipate | | | | plans and successful implementation of his |
| the radical disruptive innovation that was | | | | customized strategies. He is a Senior Fellow |
| just around the corner. An aviation pioneer | | | | at the Page Center for Entrepreneurial |
| in San Antonio named Herb Kelleher did. He | | | | Studies, Business School, Miami University, |
| watched as fares plummeted without government | | | | Oxford, Ohio. |
| regulation protection. Competition for gates, | | | | |