Avoiding Myopia. To keep from suffering myopia, Sonic can follow the actions suggested by Levitt.
What 3 actions, found in the Levitt article, can Sonic do to keep from suffering myopia?
According to Levitt there are many reasons that cause myopia but there is one major reason. The major reason for a decline in industry growth is because there has been a failure of management (Levitt, 139). This failure comes from the top where organizations are more product oriented instead of customer oriented. One example is the railroad business. The railroad business is currently in trouble. They are in trouble not because there is less customers but because of management decisions. Instead of labeling themselves as being in the transportation business they said they are only in the railroad business. The railroad business was product oriented instead of customer oriented. Hollywood was another industry that faced problems. Television changed the way Hollywood and other companies operated, many companies disappeared. Hollywood defined its business incorrectly by thinking it was in the movie business (product oriented) rather than the entertainment business (customer oriented). Hollywood in the beginning did not want to do anything with TV. After a while it changed and now Hollywood is a big success. Young writers, producers, and directors who have worked previously in the TV business were the once who changed Hollywood. Without the change Hollywood most likely would have gone bankrupt like some other companies because now TV business is much larger than the movie business. Levitt maintained that industries endanger their futures by improperly defining their purposes (Levitt, 139).
Customer oriented management can keep an organization growing even after the obvious opportunities have been exhausted. DuPont and Corning are two companies that have been around for a long time. Though both companies have great technical competence and product orientation this was not the primary cause of their success, they are successful because they have been thoroughly customer oriented also (Levitt, 139). Another two wartime created companies that deal with aluminum have been doing a great job in inventing new customer satisfying uses. The two companies are Kaiser Aluminum & Chemical Corporation and Reynolds Metals Company. Because of these two companies there is enough aluminum for everyone.
There are companies that are labeled as mass production industries. These companies have a goal to produce as much as they can. The benefit to mass production is that there is declining unit costs the more a company produces. There are big profits with mass production. There is a negative, these companies neglect marketing. These companies will be focus on selling the products and not marketing them. Selling meets the need of the mass production industries, while marketing on the needs of the customer. In mass production industries the companies determine what is sold while a company that focuses on marketing determines what the customer wants and designs according to their wants. Detroit automakers are in the max production industry. They are also in an industry that has the biggest impact on consumers. The automakers every few years make a model change which should involve customer wants. Detroit spends millions of dollars on research but its not the right kind of research. Detroit made the mistake in not researching customer wants but preferences between options that Detroit companies came up with. Detroit automakers thought that consumers do not want anything that is much different than what they have been getting in the past. Consumers also complain about the ways the cars get serviced after the sale. Illustrative of Detroit's arms-length attitude is the fact that, while servicing holds enormous sales-stimulating, profit-building opportunities, only 57 of Chevrolet's 7,000 dealers provide night maintenance service (Levitt, 145). And even though companies complain nothing is done about it. If the automakers do listen its when they can sell more products though mass production. Because of this Detroit automakers have lost millions of sales. This was not the case when Henry Ford was around. Henry Ford invented the assembly line which brought mass production. And even though Henry Ford only offer customers a black car in the beginning at the same time he cared about customers wants. Henry Ford had a production policy that focused on customers needs. Most people know him for production genius but he was in fact great in marketing. Henry Ford wanted to meet the wants of customers by lowering the price of the car to 500 dollars. To meet the want he invented mass production. Even though Henry Ford said this numerous times many companies ignore the lesson.
To keep from suffering myopia, Sonic can follow the actions suggested by Levitt. Sonic must first recognize that the organization begins with the consumer and their needs or desires, not with a patent on PDA or selling skills for the product. Sonic must think of itself as a company that makes people want to do business with it because of the things Sonic does for the consumer and not focus on the goods and services it produces. To take advantage of growth opportunities Sonic must define the organization broadly through effective positioning and strategic brand management (Levitt, 2004, pg. 138-149). Sonic must also not focus mostly on production. Sonic does have a large goal in sales especially for the first year. But it must not only focus on the sales but also on providing wants for the customers though marketing. Sonic must take Henry Fords lesson to always meet customer wants. With this strategy there will be a smaller chance that Sonic will suffer from myopia.
Levitt, T.(2004). Marketing myopia. Harvard Business Review, 82(7/8), pg. 138-149.