By Theodore Levitt
Every major industry was once a growth industry.
But some that are now riding a wave of
growth enthusiasm are very mueh in the shadow
of decline. Others whieh are thought of as seasoned
growth industries have actually stopped
growing. In every case the reason growth is
threatened, slowed, or stopped is not because
the market is saturated. It is because there has
been a failure of management.
Fateful Purposes
The failure is at the top. The exeeutives responsible
for it, in the last analysis, are those
who deal witb broad aims and policies. Thus:
C The railroads did not stop j^rowing because tlie
need for passenger and freight transportation declined.
That grew. The railroads are in trouble
today not because the need was filled by others
(cars, trueks, airplanes, even telephones), but hecause
it was not filled hy the railroads themselves.
They let others take eustomers away from them
because they assumed themselves to be in the railroad
husiness rather than in the transportation
business. The reason they defined their industry
wrong was because they were railroad-oriented instead
of transportation-oriented; they were produetoriented
instead of customer-oriented.
e Hollywood barely escaped being totally ravished
by television. Actually, all the established
film companies went through drastic reorganizations.
Some simply disappeared. All of them got
into trouble not because of TV's inroads hut because
of their own myopia. As with the railroads,
Hollywood defined its husiness incorrectly. It
thought it was in the movie husiness when it was
actually in the entertainment husiness. "Movies"
implied a specific, limited produet. This produced
a fatuous contentment which from the beginning
led producers to view TV as a threat. HollywootI
scorncxi and rejected TV when it should have welcomed
it as an opportunity — an opportunity to
expand the entertainment husiness.
Today TV is a bigger husiness than the old narrowly
defined movie business ever was. Had HolKvvood
heen eustomer-oriented (providing entertainment),
rather than product-oriented (making movies),
would it have gone through the fiscal purgatory
that it did? I douht it. What ultimately saved
Hollywood and accounted for its reeent resurgence
was the vvae of new young writers, producers,
and directors whose previous suecesscs in television