The rise and fall of companies is a fact of business life. But what drives some businesses downhill over the decades, while others wax stronger year by year? Is there some magic ingredient that prolongs life?
In the Financial Times, John Kay compared the top dozen companies of 1913 with the present day, finding that only General Electric, Shell and Exxon had survived the wear and tear of the decades. Yet Fortune's Global 500 shows few new champions in consumer goods. In beverages, electricals, entertainment, food. cars, drugs, film, soap, etc. world leaders can parade many decades of profitable trading in potent brands.
Right down the scale, the strength of the customer franchise is the magic ingredient. Shell, Esso and GE are superb brands on which managers (unlike the lapsed giants) have lavished care and money. In electronics latecomers (Sony, Compaq, Microsoft, Intel, Dell, etc.) have surged forward, not just by technological excellence, but by powerful brand marketing.
Dell's direct selling is retailing in all but name - however specialised in nature and technique. Retailing at large also features conspicuous success for latecomers, some highly specialised: Home Depot and Toys 'R' Us, for example. Other interlopers, like colossi WalMart and Carrefour, have stolen markets by differentiation and strong branding.
Established retailers, by under-investing in marketing, became vulnerable to brand-building midgets like Benetton. Store chains leave too many tempting gaps - witness the success of, well, The Gap. Large retailers have mostly been less skilful than their suppliers at extending existing brands or spinning off new growth businesses.
Authoritarian management traditions discourage brilliant, maverick initiatives. But the mightiest maverick, WalMart, is determined to prove that giants can multiply formats as fluently as any new boy. Already boasting giant discount warehouses (branded as Sam's), discount stores and supercentres (akin to British superstores), it is now going bravely down-scale.
New stores of 3,600 square metres will supposedly woo lost customers by more convenience and service than superstores. Brand-building and extension are necessary skills for tomorrow's would-be retail leaders. The alternative is not cosy: reduced market shares, lower profit margins, and, for the really unlucky, decline and fall.
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