America’s corporate giants are becoming more difficult to overthrow
When attending a business conference or reading a management book, you are almost guaranteed to encounter some variation of the same message: the pace of change in business is accelerating, and no one is safe from disruption. Recent advancements in artificial intelligence (AI) have left many large corporations feeling anxious, fearing that they may suffer the same fate as companies like Kodak and Blockbuster, which were brought down by the digital revolution.
In 1997, Clayton Christensen, a management guru, wrote a seminal book called “The Innovator’s Dilemma,” in which he observed that established companies are hesitant to pursue radical innovations that could make their products or services cheaper or more convenient, for fear of damaging the profitability of their existing businesses. This creates an opportunity for new and unencumbered players to enter the market. However, the reality is that America’s corporate landscape has experienced surprisingly little competitive disruption during the internet age. Incumbents seem to have become more secure, rather than less. And there are good reasons to believe that they will continue to dominate.
Take the Fortune 500, which consists of America’s largest companies based on revenue, including Walmart and Wells Fargo. These companies, which account for approximately one-fifth of employment, half of sales, and two-thirds of profits, form the backbone of corporate America. The Economist has analyzed the age of each firm, considering mergers and spin-offs that may artificially make the group appear younger.
2023-08-21 12:45:04
Post from www.economist.com
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