I’ve had a lot of questions about why it seems that many companies seem to lose their leading position due to improvements made by competitors to the functionality of their products. The reason for these questions is because The Alpha Factor states emphatically that functionality will always be trumped by a company that addresses customers’ self-satisfaction and personal significance. In fact, most Alpha’s actually have products that perform poorer than some of their competitors.
The answer is that functionality can only knock out an Alpha, when the Alpha loses sight of the emotional and ego-satisfaction factors that made it the Alpha. Then it becomes a battle of functional comparisons.
Here is a good current example:
Microsoft looks like it may be in a battle for its life against Apple. The battleground seems to be based upon Apple’s fabulous TV campaign to contrast the ease of use of Mac’s vs. PC’s. With the introduction of Apple’s new Leopard operating system, there seems to be more momentum moving toward MAC’s than ever before.
So what happened? Yes, Microsoft has been the dominant player for many years. Despite a much better operating system, greater reliability of the software, less frequent hacking intrusions, and much easier learning curve, Macintosh computers have been relegated to a relatively small set of customers, especially focusing upon the arts.
The problem for Microsoft has been that it is one of the most hated companies on the planet. People admire Bill Gates for his amazing level of personal success, but they hate Microsoft’s customer service. They hate their operating software that degrades over time until it makes even operating your PC all but impossible. They hate the fact that PC’s continually crash – so much so that Microsoft finally added a function to advise their technical teams of every software failure so they could continually attempt to improve functionality. They hate the fact that they have to spend a small fortune every year to protect their Microsoft-based PCs against security risks. They hate the fact that Microsoft introduces new software with bugs, and then spends the next few years providing patches to fix those problems. They hate Microsoft’s corporate arrogance.
In short, customers hate Microsoft, because Microsoft has arrogantly ignored almost all of the emotional and ego-satisfaction factors that create long-term loyalty. They have relied upon their strangle-hold on access to computing and the high cost of converting to a competing operating system. The problem for Microsoft is and has been that they figured that they controlled the availability of the benefits of owning a computer, so they could ignore what their customers really want to buy.
The turning point, however, has been the forced introduction of
Watch as things unfold. Microsoft could most certainly overcome this problem by responding wisely, even though more and more PC owners are starting to realize that they have been living far below their potential for joyful computing. For most people, the investment of changing from one system to another is far greater than just the investment in hardware and software. It will require an entire change in the way they do things. But Apple has even addressed that by having worked hard to create a reliable interface between MAC’s and PC’s so data can be transferred somewhat easily.
So, what will be the outcome? Since Microsoft’s hold has been purely functional for many years, I continually look to Apple to be the eventual winner. Even if they don’t end up as the largest seller of operating systems and hardware, I count on them to become the first true Alpha in the personal computing arena.