Marketing Myopia - Defining Business Strategy

One of Levitt’s most prominent examples is the railroad industry. In the early days of the railroad industry, businesses were overly focused on developing and expanding their railroads that they failed to see the potential of the automobile and other modes of transport. As a result, the railroad industry missed out on a major market opportunity and could not recover. Levitt attributes this to a management failure because they defined their business around railroads rather than the more significant objective, getting from point A to point B; transport.

This perspective is quite interesting. When one comes to terms with the idea, it seems rational in the truth that businesses are conceived because they feel they can satisfy a consumer need, and if that need is no longer required, there is no longer business. As Levitt stated, “If a company’s own research does not make a product obsolete, another’s will” (Levitt, 36). What Levitt attributes this failure to is not that they are not attempting to sell more but rather that their service portfolio is misaligned with current and future market demands. Businesses tend to fall into the logical fallacy of thinking that because they began operations in times of demand for a particular offering, this demand will continue to persist and that their old ways of marketing will continue to draw in business growth. What they miss out on is that the business dynamic is fast-paced and ever-changing under the laws of ruthless market norms.

Levitt made a fascinating point when it came to the automobile industry. He used gas stations as a metaphor for tax collectors- no matter how refined the marketing is, the principal values are disliked. No matter how you look at it, oil is oil. He indicated that with the advent of methods of transport that eliminate the need to interact with gas stations, consumers would flee. This is precisely what is happening with the inception of electric vehicle manufacturers such as Tesla, whose very USP lies in the very fact that customers do not have to deal with oil and people who want to take their money [1].