The pencil maker vs. the video store: Who is the best fit for this digital age? ~ Brand Mix

Wednesday, September 22, 2010

The pencil maker vs. the video store: Who is the best fit for this digital age?

The pencil wins! After struggling for years, Blockbuster has officially declared bankruptcy. Meanwhile, Faber-Castell continues to do well, selling over 2 billion pencils last year with a product that's changed little since it was first launched in 1761.

You might have expected a different result. Who needs a pencil in a paperless world? Aren't people still renting movies? But, as it happens, people still need a pencil or two, especially children and especially children in emerging markets. Whereas, it's much more convenient to order movies online or through Netflix than drive to the store and find out that there are no copies left of the movie you wanted.

Both Blockbuster and Faber-Castell followed the same strategy--perfecting their existing business and beating competitors offering the same thing. That's turned out OK for Faber-Castell and horribly for Blockbuster. Sometimes a narrow focus pays off, sometimes it doesn't.

It's easy, after the fact, to identify businesses (newspapers, bookstores, camera film manufacturers etc) that failed to react to disruptive change. More difficult to see it ahead of time and very tough to change direction before it's too late.

Pencil Photo by Pink Sherbet Photography on Flickr


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