Companies need to focus

There are lots of rumors going around that Google is going to open up retail stores in time for the next holiday season. I don’t think they’ll succeed.

For some reason, there’s a desire these days for companies to expand outside their areas of expertise, whether it’s organically or through acquisitions. In the overwhelming majority of cases these expansion plans don’t work. Companies need to focus on their strengths.

Let’s look at some examples.

Google is a technology company
Google started out as a search engine, ventured into advertising, and then started creating all sorts of other technologies ranging from Gmail to a mobile operating system. In all of these cases, what Google does well is technology. They don’t do so hot on the support and marketing fronts. In fact, Google’s previous forays into retail selling of phones. The Nexus One, which was a great phone, was not promoted or marketed well, and anyone who tried to purchase a Nexus 4 before the holidays is well aware of how poorly they handled the demand for that product. I don’t see how they’ll be able to maintain a retail presence.

Apple is a hardware company
Apple may want to be claim their a vertically integrated hardware and software company, but in my mind they are a hardware company. What they do well is create hardware that is easy to use for the average consumer because of the user interface they place on the hardware. When they’ve tried to venture too far away from hardware into services and software, their efforts have not gone well. Just look at things like their Ping music service, iCloud, and most recently Apple Maps. Apple would be best served to focus their efforts on creating outstanding hardware and leave the software and services that go on top to someone else.

Microsoft is a software company
I find the rumors of Microsoft building their own smartphone entertaining. Quite honestly, I don’t think a Microsoft phone would even be as successful as the Surface tablet, which has gotten of to a very slow start. I understand that there is a certain allure for Microsoft in wanting to be like Apple, but the fact of the matter is that it’s not in Microsoft’s DNA. Similar to Apple, Microsoft would be better served to focus on the software side of things and leave the hardware up to their partners who know better.

BlackBerry is an enterprise company
What precipitated the demise of BlackBerry? Chasing the consumer. BlackBerry does not know how to service the consumer market – never has and never will. Even today, BlackBerry would be best served to focus on their enterprise strengths. They still need to build competitive hardware, but the hardware (and software) needs to be focused on serving the needs of their enterprise clients. By chasing the consumer market, BlackBerry alienated and lost their enterprise base and was never able to become relevant in the consumer space. In other words, they lost on both fronts, which they will be hard pressed to recover from, even with the release of BB10 and their new Z10 and Q10 handsets.

The moral of this story, identify what you’re good at and embrace it. Trying to expand to be all things to all people is a recipe for disaster that doesn’t work well for anyone, and it doesn’t matter if you’re in the technology business or outside of it.

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