“There’s no such thing as a permanently great company or a permanently great industry. All industries rise and fall as do companies. However, there are permanently smart strategic moves” —W. Chan Kim & Renée Mauborgne
All businesses are subject to the unpredictable evolution of the market place. The danger you face is of misjudging or ignoring trends that can make your business become obsolete. Previously I have cited the story of ancient Pompeii “Will Your Business Be A Volcanic Casualty?” as inspiration for businesses to continuously scan their horizons for both opportunity and danger. Today I highlight the observation that there are no permanently great industries using the example of mighty power plants.
There are 3,200 utilities that make up the U.S. electrical grid, the largest machine in the world. These power companies sell $400 billion worth of electricity a year, mostly derived from burning fossil fuels in centralized stations and distributed over 2.7 million miles of power lines. Regulators set rates; utilities get guaranteed returns; investors get sure-thing dividends. It’s a model that hasn’t changed much since Thomas Edison invented the light bulb. And it’s doomed to obsolescence.
[Image via Businessweek.]