By Phillip Chichoni
When Henry Ford introduced the Model T in 1908, the world of motor vehicles changed drastically. The design of the car was brilliant and beautiful. The price was affordable, not only to the very rich as cars were before then, but also to the middles class and ordinary people. His assembly line system enabled mass production, which resulted in more cars being made and at a lower cost. Within a few years, Ford Motor Company had become the biggest car manufacturer in the United States, with over 57% market share. The ubiquitous black Model T Ford replaced the horse-carriage from the nineteenth century. It opened travel to middle-class America and people loved it.
However, as years went by, Ford started losing market share to competitors like Chrysler and General Motors. The main reason was that Henry Ford refused to change his prized Model T. While other firms introduced better engines, transmissions and balloon tyres, the Model T remained with its underpowered, noisy engine, horse-buggy planetary transmission and clincher type tyres which required much higher pressure than balloon tyres.
Customers moved on to other models. By 1927 Ford had lost its majority market share. It started making losses which went on for fifteen years.
What went wrong?
Henry Ford thought the Model T was perfect. He believed there was no way you could improve upon perfection. Unfortunately, he refused to listen to his managers who came up with new improvements. He didn’t look at what competitors were doing. He was not interested in customers’ opinions.
Some businesses today are suffering, not because of the current economic difficulties, but because they are not changing and improving. Even in good times, a business that does not improve continuously gets overtaken by competition. With today’s fast moving technological advancements and highly competitive entrepreneurs, your star product or service can easily become obsolete.
One entrepreneur who has kept on top of her game amidst tough competition from big and established businesses in the security industry is Mrs. Divine Ndhlukula, founder of Securico. Read about her entrepreneurial journey, from starting in a cottage to becoming one of Africa’s most influential entrepreneurs, in the August issue of BusinessLink magazine. See http://smebusinesslink.com/magazine for details of our special offer if you subscribe by Friday 8 August.
Please email me your thoughts.
If you liked this post, please share it with your friends and connections who might benefit from the information.
Follow the BusinessLink page on LinkedIn to get regular updates by clicking the link below