Why on Earth

People talk of business models with certain words and meanings in the USA. People may use the same words with different meanings in France, Malaysia, Brazil, and South Africa. We may translate the words but we may not understand each other, with real consequences.

What does your strategy development have in common with the financial crisis? And why did smart, self-interested, experienced people decide to buy and sell complicated financial instruments, risk so much on unsupportable assumptions, and let the inmates run the asylum?

Although this post seems superficially about stock-market investments, it really isn’t. It applies equally to virtually any competitive-strategy decision.

“Decades ago, GM controlled half of the U.S. market… Last month,… GM’s share of the U.S. vehicle market sank to 19.4%, according to Autodata Corp.” (WSJ, 6/24/08) We note in passing the “controlled” language, and wonder: If GM really controlled the market, would it have let its share decline so much?