Luck Leads to Innovation
An example of how serendipity can spur reinvention, if you recognize and seize it. Model railway company Hornby outsourced to China and ended up with an unexpected new market.
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What’s the Latest Development?
This is the story of a business that a decade ago was nearly bankrupt. To cut costs, the model railway company Hornby outsourced to China and was pleasantly surprised to find production there not only cheaper, but of superb quality. Seizing the opportunity, middle managers started spending the savings on adding quality, particularly lots of extra detail like windscreen wipers on a locomotive. Sales increased substantially and they found it was not fathers buying trains for their children, but for themselves. A new market had inadvertently been found.
What’s the Big Idea?
“There is no shame in getting lucky. A great manager (such as Hornby’s Frank Martin) does not necessarily come up with the strategy, but is superb at recognizing the opportunity when it comes knocking on the company’s door, while subsequently carefully adding all the other necessary strategic elements (marketing, investor relations, distribution, etc.) to take advantage of the opportunity.”
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