How Traditional Retailers Are Winning Back Customers from Ecommerce Startups — Peter S

Goliath Strikes Back How Traditional Retailers Are Winning Back Customers from Ecommerce Startups — Peter S. Cohan GOLIATH STRIKES BACK HOW TRADITIONAL RETAILERS ARE WINNING BACK CUSTOMERS FROM ECOMMERCE STARTUPS Peter S. Cohan Goliath Strikes Back: How Traditional Retailers Are Winning Back Customers from Ecommerce Startups Peter S. Cohan Management Division, Babson College, Wellesley, MA, USA ISBN-13 (pbk): 978-1-4842-6518-5 ISBN-13 (electronic): 978-1-4842-6519-2 https://doi.org/10.1007/978-1-4842-6519-2 Copyright © 2020 by Peter S. Cohan This work is subject to copyright. 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Contents About the Author��vii Acknowledgments ��ix Preface��xi Part I: Exploring Strategic Mindset by Industry��1 Chapter 1: Introduction �� 3 Chapter 2: Consumer Electronics ��17 Chapter 3: Video Entertainment��33 Chapter 4: Newspapers ��51 Chapter 5: Groceries ��71 Chapter 6: Furniture��89 Chapter 7: Logistics ��109 Part II: Implications for Leaders ��127 Chapter 8: Leading Through Strategic Mindset ��129 Appendix A: Notes��153 Index ��171 About the Author Peter S. Cohan is Lecturer of Strategy at Babson College where he teaches strategy and entrepreneurship to undergraduate and MBA students. He is the founding principal of Peter S. Cohan & Associates, a management consulting and venture capital firm. He has completed over 150 growth-strategy consulting projects for global technology companies and invested in seven startups – three of which were sold for over $2 billion. Peter has written 15 books and writes columns on entrepreneurship for Forbes and Inc. Prior to starting his firm, he worked as a case team leader for Harvard Business School Professor Michael Porter’s consulting firm. He has taught at MIT, Stanford, Columbia University, New York University, Bentley University, the Vienna University of Technology, Tel Aviv University, and the University of Hong Kong. Peter earned an MBA from Wharton, did graduate work in computer science at MIT, and holds a BS in electrical engineering from Swarthmore College. Acknowledgments This book would not have been possible without the help of many people. My colleagues at Babson College – including Nan Langowitz, Danna Greenberg, JB Kassarjian, Allan Cohen, Sam Hariharan, and Keith Rollag – provided me with very helpful support and suggestions for improvement. I am also grateful to the many people who offered me their views on the top- ics discussed in this book including Harvard Business School Associate Professor, Laura Huang; Stanford Business School Professor, Charles O’Reilly; Yale School of Management Lester Crown Professor of Leadership Practice, Jeffrey Sonnenfeld; Academic Director of Wharton’s Baker Retailing Center, Thomas S. Robertson; MIT Sloan School Senior Lecturer, Sharmila Chatterjee; Northeastern University Associate Professor of Journalism, Dan Kennedy; Director of University of Colorado Boulder’s News Corp, Chuck Plunkett; and author Marc Levinson. Many analysts were also very helpful. These include Tory Gundelach, VP of Retail Insights at Kantar Consulting; Charlie O’Shea, retail analyst at Moody’s; and Jonathan Matuszewski, analyst at Jefferies. Executives and investors – including Chris Lynch, CEO of AtScale; Ben Gordon, Managing Partner, Cambridge Capital; Michael Greeley, General Partner, Flare Capital Partners; and Santi Subotovsky, General Partner, Emergence Capital – also shared their valuable insights. Finally I deeply appreciate the help of Rita Fernando and the team at Apress for ably bringing this book to fruition. Preface I wrote this book to answer questions that have puzzled me for decades: why do so many successful companies cling to the past instead of creating the future? Are all such incumbents doomed to stagnate, decline, or implode because they can’t adapt effectively to the threats and opportunities created by changing technology, upstart competitors, and evolving customer needs? If not, what can incumbents do to grow faster? I explored these questions in two of my earlier books, but I now realize that until about 20 years later, I was missing a critical piece of the puzzle. For example, in The Technology Leaders1 – inspired by my first consulting project aimed at answering these questions for the R&D department of a leading Asian telecommunications company – I studied companies that had prevailed in more than one wave of new technology. Four specific organizational attributes distinguished them from other companies: • Entrepreneurial leadership: The ability to hire and motivate entrepreneurs to work for the company • Open technology: A willingness to develop technologies from sources other than a company’s own R&D department – for example, through acquisitions or partnerships • Boundaryless product development: Developing new products by coordinating functional departments such as engineering, marketing, manufacturing, and sales – to collaborate with early-adopter customers • Disciplined resource allocation: Shifting resources from unsuccessful projects to more promising ones in a disciplined manner Looking back on this framework, I now realize that I missed an important point – the CEOs of the most successful high technology companies had very different mindsets than the less successful companies. For example, Microsoft at the time was led by Bill Gates, a CEO who had founded the company, and Cisco Systems’ CEO, John Chambers, excelled as an acquirer 1Peter S. Cohan, “The Technology Leaders: How America’s Most Profitable High-Tech Companies Innovate Their Way to Success” (Jossey-Bass, 1997). xii Preface of new technologies that the company’s customers wanted to buy. Simply put, when I wrote The Technology Leaders, I was under the illusion that to persuade leaders to adopt these organizational attributes, it would be suffi- cient to provide case studies of how these principles led

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