Recently in Management Category

How a 1930's theory explains the economics of the internet: Ronald Coase discovered “transaction costs” in the 1930s and it looks like his insight explains the extraordinary success of firms that take advantage of the Internet in their business model.

Clay Shirky in his recent post "The Collapse of Complex Business Models", describes a well known business concept: substitution  Companies always face the threat of substitute products and this is what is happening in media.  Substitution, as Michael Porter describes in his book "Competitive Advantage: Creating and sustaining superior performance" is one of the "five competitive forces determining the profitability of an industry." A complex business model is unsustainable in an environment in which the economics have changed so completely.  We have created a new delivery infrastructure for media and traditional media companies need to asses how big a threat YouTube and other delivery channels are to their current business.

I suggest that those interested in this change in customer behavior, reread Michael Porter to become familiar with "relative value" of products, the "changing role of the user", the buyer's propensity to substitute" and the S-shaped substitution curve, for greater insight into how industry changes and how competitors succeed or fail when challenged. Ten principles for a Black Swan-proof world �� this is an excellent article on how to fix this financial system by not resorting to the solutions of the past which failed.  It makes perfect sense but is largely ignored.

Jeff Bezos worked in Amazon's distribution center in  Kentucky for a week recently.  This was not a press stunt; he actually worked with the hourly employees.  Bezos is reportedly a micro-manager and the company culture is fast lean and frugal.  But, he is able to achieve good results by paying attention to details.  I am sure he was find new opportunities for improvement which is especially important in a recession.

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