Thursday, February 07, 2008
Digging In
I spent most of yesterday plowing through documents related to a company headquartered outside the US. It was interesting. There is an amazing amount of data and a fascinating story. However, in the middle of stitching together facts, the realization of how little I know became apparent. I don't have a grasp on the country's culture or on the way consumers think about the company. It is unlikely I ever will understand their view, but it might not be a barrier to telling the company's story.
I have been researching as well a company in a commodity industry in the US. Although I don't have worries about cultural distinctions, perhaps I should. The pressure of competition on a company that makes a product without differentiation is fierce. Employees think differently. Managers approach the market with fanatical attention to costs. Saving a penney is a win with long production runs. Penneys add up. This company's story is also interesting, but it will be difficult to tell. What is there new to say about an industry in which there are few innovations and in which the difference between winners and losers is efficiency? The answer to that is to keep digging. The inside story of the industry may reveal missing angles.
The lesson from both these companies is there is no substitute for homework, but homework is never enough. Elements are always missing. Sometimes they are critical, sometimes not, but it is hubris to think one ever knows.
I have been researching as well a company in a commodity industry in the US. Although I don't have worries about cultural distinctions, perhaps I should. The pressure of competition on a company that makes a product without differentiation is fierce. Employees think differently. Managers approach the market with fanatical attention to costs. Saving a penney is a win with long production runs. Penneys add up. This company's story is also interesting, but it will be difficult to tell. What is there new to say about an industry in which there are few innovations and in which the difference between winners and losers is efficiency? The answer to that is to keep digging. The inside story of the industry may reveal missing angles.
The lesson from both these companies is there is no substitute for homework, but homework is never enough. Elements are always missing. Sometimes they are critical, sometimes not, but it is hubris to think one ever knows.
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