Apple, Google, and Amazon

By Steve Denning via   Article

Apple, Google And Amazon: How To Understand Capitalism’s Future

“… Apple and Google, have adopted different approaches in deciding what to do with the huge amounts of cash they have generated over the last decade. … the possibility of a third way: plowing gains back into new, market-creating innovation.

Although Apple built its fortune under Steve Jobs as a design-based customer-focused firm, in recent years it has gone along with Wall Street’s demands to extract value for shareholders, while losing ground to competitors in fields it once dominated, such as high-end PCs, voice-operated hardware, video software.

By contrast, Google has opted to keep control by its founders and executives. Yet despite vast expenditure on a host of initiatives, Google remains a one-trick pony. Its combination of search and ads generates vast amount of money. But since then, none of its other experiments have had a comparable impact. …

Yet neither Apple’s shareholder-centric approach nor Google’s founder-centric approach offers a coherent way forward. Both Apple and Google are living off their former glory.

The true future of the economy is the customer-centric approach. It’s not new. It was propounded by Peter Drucker back in 1954: ‘There is only one valid purpose of a firm, to create a customer.’ If you want a single exemplar to the customer-centric approach, you need look no further than Amazon.

Thus the central issue for the future of the economy is not who should be deciding what to do with profits —Wall Street or the founders — and rather what they should be trying to accomplish, and how they should be trying to accomplish it. It is Amazon that is showing the way with a series of market-creating innovations. Instead of living off and improving its existing businesses, it is systematically creating new businesses that are more important than its original business.”


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