Why market leaders lose out to innovators?

From Josiah Go article at Inquirer Market Pulse

From Business Inquirer

Why as Cebu Pacific wrested the market share from PAL, Asias first  airline when it had the resources to launch such service, segment the market?  Or why has The Generic Pharmacy now outnumbered Mercury Drug outlets 2:1

Some answers:

1.  Company needs to protect financials.  Many see PHP spent on innovation as potential loss rather than potential profits;  (in gestation period, the new business can experience losses:

2.  Culture of complacency Success is the greatest enemy;  it breeds complacency

3.  Limited knowledge and methodology;   lack of understanding  of business model and see anything new as innovation

4.  Arrogance and pride (Pride goeth before the fall (hubris)

5.  Lack of strategic thinking

6.  Slow response to technological changes (lack of speed)

7.  Lack of idea channel (suggestion system bottoms up communication

8.  Internal inefficiency;  not process oriented lack of quality, or even squabbles that hinders the growth

9.  Lack of marketing talent in the team

10.  Inability to be a visionary to see the big picture.  While focusing now and operational efficiency, the future, the direction of the company is forgotten

DOTR, DPWH BCDA projects can spur further economic development

Every generation needs a revolution - an entrepreneurial revolution

Rizal Philippines
November 3, 2016

From Inquirer

The four secretaries:  Mark Villar of DPWH, Arthur Tugade of Department of Transportation, Sec. Pernia of NEDA, and BCDA chief Dizon conducted a press con a Malacanang that highlighted the DU30 effort to ease transportation woes (decongest MM) speed up mobility throughout the nation

Some of the projects mentioned: (approved by NEDA board all ready)

DPWH

1.  Linking NLEX and SLEX - this will help decongest EDSA
2.   Viaduct in Ateneo  to ease Katipunan traffic
3.  Bridge linking Cebu and Iloilo

DOTR
1.  BRT in EDSA  (P37.8 billion project)
2.  Fast train between Clark and Manila
3.  600 km train line up to Sorsogon
4.   The Cargo train line from Clark to Subic

BCDA
1.  Development of Clark into a world class international airport by 2018
2.  Green City in Clark
3.  Corroboration with DOTr with regards to BRT and the Clark Subic cargo train project.

They said they have been keeping quiet on these projects as medium and long term solution to the traffic problem,  MM will be decongested and progress will be relocated to CL (Region 3) as  the cargo hub that connects Clark Intl Airport and Subic port will mean cargo will be flowing between Clark and Subic.  Thus Central and Northern Luzon will have their own logistic hub instead of going to Manila Port

Who is afraid of OPM/leveraging - using UOPM (Using Other Peoples Money) to the max!

Every generation needs a revolution - an entrepreneurial revolution

The advice of my late mother in business is to avoid debt as much as possible.  It is like the Dutch philosophy in business - to grow business like a tree slowly but surely.  Avoid the path of mushrooms which grow overnight and be gone the following the day.  Dont be like a meteor that burns itself out.

She even hid from me a Title to large commercial building at the heart of the town because she was afraid I will hock it to the max (despite the fact that I helped her build her little fortune by my strategies.)

Lately, I came across captains of the industry in chemicals, education, and  finance.  The strategy is all about leveraging.  Borrow borrow to grow.

1.   A school purchase I witnessed involves the hocking of the property to be bought using their own real estate holding company.  The monthly amortization for ten years will exceed the monthly cash flow of the loan.

2.  They are to pay off a personal loan of a principal.  Strategy involves transferring the TCT to the corporation, borrowing against the property P100 which is worth P200 million .  The P100 million will be used to pay off the loan which could be settled at P70 million and P30 million to start the development of the property.

3,  To clean the credit of a principal, they will do the same.

And so