Sony’s dominance and Dressbarn’s implosion is a tale of two giants that says a lot about how to run your small business.
Growth is the key to sustaining any small business.
In a world where capital is consolidating at the top, you’re either gaining ground or losing it, and big corporations can teach the little guys a lot about how this ruthless game is played.
On the cautionary side of this story: this week Dressbarn announced it will be shuttering operations.
CEO Gary Muto said in a statement the once mega women’s clothing outfit, which opened its doors in 1962, will have to shut down its some 650 brick and mortar locations.
It’s no secret in 2019 shoppers don’t want to go to physical stores, and they certainly don’t want to go to barns.
But whether barns or more noble facilities, retail outlets of all sizes are being swallowed alive by Amazon and other online-only merchants.
When companies like Dressbarn, or even American Apparel, who filed chapter 11 bankruptcy in 2015, aren’t able to convince customers to meet them on the web, it’s lights out.
That’s a good lesson for any small business who rightly sees itself operating as a microcosm of corporate America.
Why adaptability is the core of business success
For listeners of the excellent Business Wars podcast, the infamous battle between Blockbuster and Netflix for dominance of home video was closer fought than one would think.
But in the end, it came down to which company was best able to meet changing consumer tastes.
To recap, Blockbuster had all the advantages. They had all the cash, all the customers, their personal info, and all the name recognition.
But they simply held onto all those blue and yellow stores for too long and didn’t invest in technology soon enough.
Blockbuster was so used to being a destination they didn’t realize that business in this era is about meeting your customers where they are – at home mostly.
That means planning ahead before your customers get there, and your competitors too.
A big business case study for small business growth
Sony is a company that knows where consumers are going as well as anyone, and how to be there wating: innovation.
The Japanese tech giant has raced ahead of competitors with sublime smart TVs and the best consumer/professional camera systems in the world.
However, they also just posted a nearly one billion dollar loss in their burgeoning smartphone business, according to Reuters.
Sony, of course, says it will make their tablet-phone business profitable by next year. (They all say that.)
But, Sony actually has the cash on hand to sustain these losses. So it comes down to the difference between investing capital and bleeding cash.
That can be a fine line.
Sony isn’t making the Blockbuster mistake. Or the Dressbarn mistake.
Sony gets that just because things are good now, that’s no guarantee on the future
Their customers may not want gigantic $5,000 TV sets forever, no matter how much 4k HDR goodness they pack into that slender design.
Gen Y is racing to consumer maturity. They’re gaming and watching Netflix and Youtube (and Sony Pictures films) on their personal devices. And of course, a TV can’t follow you around all day tracking your every move to sell to the highest bidder.
If Sony is going to maintain itself as a leading hardware company, it needs to be competitive manufacturing the one piece of hardware that matters most.
The Sony keys to success for your small business
Despite massive losses on their smartphones, Sony has room to invest in the future largely because of their success taking down Cannon as the top camera manufacturer.
In Japan, a single camera from Sony’s wildly popular ‘Alpha Series’ has outsold all similar offerings from Canon and Nikon combined.
Sony did this by listening to consumers long-ignored by Canon. And then, with the customer in mind, they made a huge investment in innovation.
Their massively popular Alpha cameras are now smaller, more powerful – and often cheaper than their rival’s products too.
Small business success doesn’t always mean being first, just being best.
Whether or not Sony can do with smartphones what they did with cameras is anyone’s guess. Apple and Google and others have a massive headstart.
But so did Blockbuster. And no one is too happy the iPhone now routinely costs more than $1,000.
What matters here is the principle of leveraging assets to meet a demand that’s peaking its head out just around the fiscal corner.
Dressbarn didn’t do this. Blockbuster didn’t do this. Those ships were too big and too immobile to steer away from the giant icebergs on the horizon.
Small businesses shouldn’t have this last problem. Mobility is a core strength of entrepreneurs. But the fortitude to take a risk, to bet on yourself, and get to where customers are headed, not where they’ve been, is what separates winners from losers.
This is more important than ever in an economy that increasingly only has room for one of these two groups.