Peloton announced blowout earnings in September, which helped it join an elite club that includes Apple, Netflix, and Tesla. These companies not only delight their customers and create enormous shareholder value; they’re also rewriting some specific, outdated rules on what drives effective business strategy.
If you want to thrive in today’s market, it’s worth understanding exactly what’s behind these companies’ growth…and how different it is from the way companies used to think.
A quarter-century ago, in their widely acclaimed book Competing for the Future, C.K. Prahalad and Gary Hamel tried to explain why the biggest companies thrive. Their answer: These market leaders identified the part of business they’re best at—be it engineering, product design, manufacturing, supply-chain management, or something else—and they continually reinvest in it. Most everything else is outsourced to third parties.
For example, Walmart exploited its expertise in global sourcing and supply-chain management, but it didn’t bother manufacturing its own products. Toyota, meanwhile, achieved market leadership by excelling in product engineering and manufacturing, but it left its retailing operations to independent car dealers.
This approach gained traction and was echoed by influential business thinkers for decades. It’s why when Apple first announced plans to open company-owned stores and Amazon began designing its own consumer electronics, critical pundits piled on. In 2001, for example, Bloomberg ran a commentary titled “Sorry, Steve [Jobs]: Here’s Why Apple Stores Won’t Work.” And Amazon was often pilloried after launching its first-generation Kindle.
Both the Apple Store and Kindle were huge successes, of course. So what did the critics miss? They were attached to the old “capability-driven strategy”— the idea that companies should focus on what they’re best at. But the idea was flawed and getting old.
Continue reading your story on the app
Continue reading your story in the magazine
The Beauty of Being Rejected
I thought my idea to shake up the book industry was brilliant. Investors didn’t. That ended up being my greatest asset.
Can There Be Two Tinders for Clothes?
She was a first-time founder with a fresh idea. Then a $30 million competitor arrived.
Getting More from Less
Everyone has been forced to cut back in some way—but limitations can lead us to even greater growth. We asked six entrepreneurs: What unexpected benefits have you gotten from change?
Are We Going Digital Forever?
The pandemic swiftly moved our world online. Once you discover the power of engaging your customers digitally, you won’t want to go back.
“How Can I Help You?”
Don’t know exactly what your customers want? Ask them. That’s how Christine Schindler turned a raw technology into a popular tool to make restaurants safer.
Michael J. Fox – “With Gratitude, Optimism Is Sustainable”
After a hard year for everyone, beloved actor Michael J. Fox has some advice: No matter the circumstances, optimism is possible. And he should know.
What Makes Peloton, Apple, Netflix, and Tesla Successful?
They’re not just smart companies. They’re vertically integrated companies—and it’s a strategy even small startups can consider.
How the Future Gets BUILT
Intelligent algae that eat carbon. Underwater drones. An internet for Mars. It’s not easy building the stuff for tomorrow when you also have to run a sustainable business today. But that’s what Hypergiant is trying to figure out.
Zooming into the Future
This year, ZOOM transformed from a business tool into a lifeline. How did the company keep up? Simple, says founder and CEO Eric Yuan: It focused on fundamentals.
15 Ways Franchises Became Stronger This Year
No matter what service or product they provide, franchisees and franchisors were rocked by 2020. But many made adjustments that improved their businesses—not just for now but for long into the future. Here’s what 15 of them learned.
APPLE ANNOUNCES NEW PROJECTS AS PART OF ITS RACIAL EQUITY AND JUSTICE INITIATIVE (REJI)
IT’S ALL PART OF THE COMPANY’S $100 MILLION PLEDGE
WHATSAPP GROWTH SLUMPS AS RIVALS SIGNAL, TELEGRAM RISE
Encrypted messaging apps Signal and Telegram are seeing huge upticks in downloads from Apple and Google’s app stores.
SPOTIFY'S PODCAST POWER PLAY
The company is staking its future on converting music listeners to podcast fans and has become the favorite to own the industry—for better or worse
ATHLEISURE LIST: EQUIPMENT + STREAMING CITYROW
Founded by Helaine Knapp,'s CITY ROW Signature-class format combines rowing intervals with strength training for a total body HIIT-style workout.
STM ChargeTree 3–in–1 wireless charger
Space–conscious wireless charging
YOU: PRO NEW GENERATION POWERS UP YOUR TECH
As iPhone and iPad sales begin to fall, Apple is focusing its attention on professional users, introducing a bunch of new hardware to compete in an increasingly crowded - but lucrative - market. With the launch of Pro Mode for macOS, the company could be onto a winner…
BACK TO SCHOOL: RETURNING TO THE CLASSROOM SAFELY
Five months on from the start of the coronavirus pandemic, and policymakers and public health officials have decided it’s time to return to the classroom. Around the world, schools and colleges are preparing for a new semester, and though environments may be different, one thing is clear: teachers and students will be depending on technology more than ever.
Apple unveils new iPad Pro with trackpad support
APPLE TAKES THE iPAD PRO TO THE NEXT LEVEL
SEARCH: APPLE COULD RIVAL GOOGLE WITH NEW INDEXING SERVICE
As antitrust battles continue to dominate Silicon Valley, Apple is using its initiative, planning for a future where multibillion-dollar tie-ups aren’t acceptable. In a perhaps surprising move, the Cupertino company has reportedly begun ramping up efforts to launch its own search engine tech to rival that of Google’s, a course of action that could change the face of search.
REMOTE WORKING: VIRUS ENCOURAGES BUSINESSES TO THINK DIFFERENTLY
With the COVID-19 coronavirus outbreak forcing governments to close schools, sporting events, communal spaces and more, businesses are taking the situation into their own hands, encouraging their staff to work from home.