Although written more than fifty years ago, the article by Theodore Levitt can still be appealing and beneficial for business practitioners. It addresses the issue of threats that businesses may face when they fail to recognize and follow the actual needs of customers or the perspectives of their industries overall. The article was analyzed for its central theme, strengths and weaknesses, and main takeaways.
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The central theme of Levitt’s article is the importance for companies to be customer-oriented instead of product-oriented. The author acknowledges that when a business builds its success on the basis of developing and promoting a single or several products that sell well, such a business is inclined to continue operating around its product. It often leads to failures because the demand for a certain product may decrease, which jeopardizes the business. Moreover, it is argued in the article that not only may the demand for a certain product or service decrease, but it will inevitably do so. Levitt states that there is no such thing as a growth industry. As technological progress goes on, whole industries decline. That is why, instead of speculating on growth industries, theorists and practitioners should think about creating businesses that are capable of seizing growth opportunities. The way to be such a company is to recognize the needs of the customers as the main priority.
The article is strongly written and appears rather convincing. It was originally printed in Harvard Business Review, which is a reputable source, and became a hit. Levitt uses simple writing, which is why one does not have to be a business specialist to understand his ideas and arguments. The structure of the article makes it easy to read. Five sources are cited, which certainly adds to the article’s reliability. The examples from different industries are another strong feature of the article. The author demonstrates a good knowledge of history and supports his arguments with appealing evidence. From the perspective of my experience, I find the article very helpful for anyone interested in business or doing it. Levitt’s ideas show what strategies a business should adopt to ensure constant development.
There are several ways for practitioners to apply the knowledge from the article. First of all, Levitt suggests that a critical thing for a company is to define correctly what business the company is in. When the definition is narrow, it is a threat to companies. The author provides several examples. For instance, railroad companies experienced a decline because they thought they were in the railroad business. If they had redefined themselves as players in the transportation business, there would have been more opportunities for them to grow and develop. Similarly, Hollywood could benefit from building its strategies for the entertainment business instead of limiting itself to merely making movies. Thinking more broadly about the needs of the market is the main takeaway from the article. Also, Levitt emphasizes that the traditional connection between products and marketing should be challenged. Many businesses view marketing as a consequence of the product, i.e., once something is developed by a company, it fuels promotion, advertising, and public relations—all aimed at raising sales. The author argues that it should be vice versa, i.e., marketing, as the effort to understand the needs of the public should fuel businesses’ endeavors in developing certain products and services.