Chapter 10 Where is the "strategic transformation point" in marketing point of view?

"As managers, we abhor change, especially when it involves us." The person who said this was the most outstanding professional manager in the United States——Andrew Grove, the former CEO of Intel (INTEL), who is listed alongside Bill Gates as the creator of the digital revolution.In the famous book "Only the Paranoid Survive", he once said another passage with equal candor: "I often feel that there is a dark cloud floating on me, but it may take me a few more years to clear it." I know what it is. Therefore, I always approach everything with trepidation and trepidation.

Andrew Grove Intel is a developer of memory chips.In the 1970s, it was precisely because of Intel's continuous innovation in memory chips that the computer industry underwent a revolutionary evolution. Intel dominated the world in this field, and no one competed for the top, with a market share of nearly 100%.However, in the 1980s, Japanese companies suddenly emerged. Relying on their latecomer advantage, they quickly swallowed up the market share of memory chips with huge investment and amazing efficiency. Grove recalled: "At the time, the Japanese were reporting more quality than we could possibly imagine, and our first instinct was to deny ... as one would normally do in this situation, we attacked the displays violently. data.” The whole world is watching with great interest, how will Grove, who is known for being “paranoid”, be “paranoid” with the Japanese in the memory chip market?

According to Grove's analysis, Intel had at least the following options: 1. Confront Japanese companies head-on, and maintain Intel's status in the arena through technology upgrades and even capital and talent acquisitions; 2. Reach a certain degree of negotiation with Japanese companies in order to seek prosperity in the market; 3. Exit the market and look for new business opportunities. Grove's decision surprised all Intel employees: we could not compete with "high-performance, low-cost, mass-produced" products made in Japan.Therefore, for Intel, the best strategy to contain failure should be - shifting the front.

Such a decision is really unacceptable for a company that is a leader in the computer field. "Companies are stuck in meetings, endless meetings, endless bickering, and meetings and bickering that lead to another round of bickering and meetings. Intel hovers in the trough of death. Some suggest pursuing a 'race to the death' strategy : Let's build a gigantic chip production plant and let the Japanese take in. Others say we should develop research and use cutting-edge technology to gain a competitive advantage, and some still think we should manufacture special-purpose The idea of ​​a memory..." After months of debate, the scales turned to Grove.Intel decided to abandon the memory products that had created the company, and instead entered the new microprocessor market.In fact, Grove was able to persuade the board and peers only because he was willing to take on the responsibility of transformation, while others were not.

Grove started looking for new products.At that time, Intel accepted an order to produce chips for the Nikon Calculator Company of Japan, which would be used in the Nikon One desktop calculator.In this business, an engineer designs a structure that puts all the circuits on a single chip, which can be programmed like a computer and built into any kind of device, and And it's not limited to calculators.However, what is puzzling is that Nikon is not interested in this new gadget.Grove discovered the value of this technology with his genius sensitivity.He claimed in the negotiations that if Nikon gave up the right to use the chip, they could get $60,000 in compensation.Nikon's rep thought about it for just a minute before readily agreeing.

Since the autumn of 1985, Intel has devoted itself to the development and development of microprocessors.After nearly a year of industrial transformation, Intel launched the 386 microprocessor that crossed the century, activating the market in one fell swoop.As the "king of memory", Intel Corporation passed away with the wind, and a new, more powerful microprocessor empire was born. The advent of the 386 allowed Intel to achieve sales of 2.9 billion US dollars that year, and the market value of the company's stock increased by 30%. This is a very extreme case.Perhaps only a paranoid like Grove can make such crazy decisions.But he succeeded.Obviously, Grove gave up memory and turned to microprocessors not just because of competitive factors, but saw a very secret but inevitable "strategic turning point".

Grove later said, "The development of technology and the market is constantly stretching its tentacles forward, and sooner or later there will be some fundamental changes in your business world...In technology, everything that is possible will be possible." We can do it. We can’t stop this inevitable law. We can’t turn a blind eye to it.” However, the first impression of many revolutionary technologies or products when they are born is often disappointing.It is often very rough, very inconspicuous, and often appears in an unobtrusive corner. People cannot judge the importance of the strategic transformation point it represents from the first prototype of a new thing.

So, where is the "strategic transformation point"?How can an entrepreneur realize this "spot" before it is imminent? This seems to be a difficult thing to pinpoint. Grove once described the strategic transformation point as follows: 1. The point of strategic transformation is not an actual "point", but a long and tortuous challenge; 2. Although these "points" are painful, they provide an opportunity for you to break through the shackles of the "high ground" and achieve higher achievements; 3. Indecision makes the threat bigger; 4. What happens at the bottom of the company without guidance from the top is likely to matter.

Grove thinks that last point is especially noteworthy.Because on the eve of some fatal industrial transformation, it is often the grassroots employees in the front line of operation who will feel the pressure of change the first.All kinds of information sent by these employees will help decision-makers judge the emergence of strategic transition points. In Grove's words, it is to extract information from "noise".In this extraction process, Grove recommends first answering the following three questions: (1) Is your main competitor about to change its strategy?If one day, you suddenly find that there are signs that a previously unremarkable company seems to be growing into a new major competitor, then this will be a strategic transformation point;

(2) Are your main "followers" about to change?If a company that was previously very important to you no longer seems to be so important, or if that company no longer seems to regard you as an important competitor, then this will also be a strategic transition point; (3) Do people in your field seem "lost"?Are these highly motivated people—including yourself—suddenly starting to lose interest in something important?Well, this is also likely to be a strategic transition point. The occurrence of bad news or disturbing abnormal situations has a more direct impact on the vital interests of operators. Therefore, it is necessary to be more vigilant and take those early warning signals seriously.

Grove also summed up two laws related to strategic transition points: first, when a certain strategic transition point arrives, the more successful companies are more threatened by changes and less adaptable to changes; It may be very expensive to fight against powerful competitors to get the "ticket" into an industrial field, but when the structure collapses, the price may become very small. What this genius entrepreneur means is that crisis and opportunity exist at the same time.When a strategic transformation point of an industry appears, the cruel game of "shuffling" begins. Leading and trailing, breakthrough and elimination, duel and compromise, you must make the most appropriate judgment and action.