How to Waste Technical Advantage

Some thoughts prompted by an article in the Daily Telegraph, touching on the Midlands Car Industry.

The article itself, celebrating 50 years of the Ford Cortina, is here.

The Cortina, once they decided not to call it “goat dung”, had a lot going for it. However, it was outsold by the Morris 1100. This was technically much more advanced, with a transverse engine and front wheel drive. It packed a great deal into a small package, and built on the success of the original Mini.

Ford, of course, is still going strong. The Morris brand disappeared in 1984. How did the technological foresight (most cars now follow a similar configuration) not translate to business success?

1. As the article notes, BMC ended up with 6 different badges on the same basic car. The MG version might give a particular sporty image, but Austin and Morris were both volume manufacturers. Duplication of sales effort resulted.

2. Manufacture also became inefficient due to the differences in design, even when minor. Famously, when it came to the Mini, Ford determined that BMC were making a loss on each car (in part leading to the Cortina). Query whether enough design input went into making manufacture profitable.

3. The technological edge was not maintained, nor was the “chic”  image of the original Mini built on. In part, this was due to the organisational culture of BMC. This had been set up in 1952 by a merger of Morris and Austin companies, a merger in name only. As was noted by Parliament “. . . although nearly twenty-five years had elapsed since the BMC merger, not even Austin and Morris, the two volume car manufacturers that formed the core of the original merger, had integrated to a significant degree. Stokes illustrated the immensity of the problem presented by the merger in 1968 by referring to the former Austin and Morris companies having been ‘scarcely on speaking terms’. Sixteen years after the formation of BMC, like the other former Nuffield companies and Jaguar, each possessed different management systems, approaches and methods, and like the other companies in the group they were ‘running on their own’.”

There is no finishing line in business, so the race is never won. Good ideas and product developments have to be successfully exploited commercially. Organisational issues have to be addressed, not ignored.

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