"It wasn't that Microsoft was so brilliant or clever in copying the Mac, it's that the Mac was a sitting duck for 10 years. That's Apple's problem: Their differentiation evaporated."
If a competitor can successfully convince consumers that there is no difference between their product and yours, you're about to be in big trouble, just like happened with Apple (AAPL) when they used to be the king of the computers.
You may ask why a company would even want to do that. The answer is because when Microsoft (MSFT) overcame the differentiation factor, it then came down to price. When consumers believe something is a commodity, the company offering the lowest price wins. Microsoft won the computer wars based on that reality.
A company can't successfully price their product higher if a consumer doesn't believe it is justified. It's as simple as that.
It's amazing when you look at the lead Apple had at one time. As Jobs mentions, if you aren't constantly improving or introducing new products, you are a sitting duck just waiting to be taken over in market share.
At a time when Wal-Mart (WMT) only had about 4 percent of the business K-Mart had, K-Mart decided the best thing to do was to hunker down and do what they always did so Wal-Mart couldn't gain any market share. Essentially over a six-year period they did nothing to improve the stores. When Wal-Mart passed them by, they were so completed entrenched in how they had been doing things that they couldn't respond and never recovered.
Sitting still makes you a sitting duck. We can never think a market share lead is a guarantee we'll hold it tomorrow. Again, this all sounds simple, but look at the companies we just talked about. If it can happen to them it can happen to anybody.
Other Steve Jobs Resources:
You've got to find what you love
Steve Jobs, Business Personality
Steve Jobs' Greatest Presentation
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