Ah.. This dhaga has now gone to YumBeeYea giri from Phunwa and Gizmo giri. So ..
Raja Bose wrote: Because following that strat-e-jee is a sure shot way to die even if you currently have setup high barriers of entry for the competition. One may not be able to enter your fortress directly but one day the world will bypass it and then you will be left high and dry up $hit creek without a paddle.
Trouble with that is the virgin new areas are a wild wild west with intense competition (usually) and success is in no way guaranteed , takes a lot of investment , effort, execution and plain old luck . Also, these games might not have a first mover advantage (if there are no natural entry barriers), but rather the later entrants might have a significant advantage from the learning and experience curve of the first mover!
Also, while your incumbent business with strong franchise and entry barriers and captive customers keeps the cash counter going ka-ching , ka-ching and puts the food on the table (think the Windows and Office franchises in Mickey), the"new initiatives" might not bring a dime and on the contrary might be a bottomless pit (think MSN earlier competing with AOL, Xbox, Zune, Bing , the entire online services part of Mickey and the latest being the Surface.. all cumulatively losing a breathtaking amount of billions over the past two decades). Any other company without the strong franchise that Mickey has (came about solely by default not by design mind you), would have folded up it's dhotis and GUBOed long ago.
Sammy understands that very well, Mickey understands that, Takla understands that, FruitCo used to understand that but under Bawarchi its a question mark and Chacha perhaps understands that but they need to execute, FB is too young to understand that.
Ah, that is only if you want to be immortal! A Mrityunjaya! A Chiranjeevi! If you are "human" and accept that companies like people go through a life cycle phase (infancy, growth (taking in resources in the 1st two) and then middle age (a massive cash cow in this phase) and finally old age and death ), you needn't be bothered too much. So what you really should do in my opinion is to live for the here and now, be bohemian and live well and live king size!
It has been extremely rare for any company in any industry to survive a "generational" shift in it's business , however big and successful they might have been earlier. Bill Gates understands that extremely well and has commented multiple times on that (his comments on IBM.. for eg, there was an IBM before I was born, and there will be one even after I am gone)..
The goal is always to move up the value chain. That is one reason why the most successful HW device onlee companies will not remain HW device onlee companies.
Ah , but no. The "Value Chain" without reference to fund-a-mental competitive advantage is bogus . You can survive, make money, thrive and grow only if you have a sustainable competitive advantage. Whether you are high in the value chain or low doesn't matter. For eg, between a Wal Mart and a Burberry, which has a more sustainable and profitable business model ?
For an egg-sample at the heart of the IT/Vity industry, let me quote a well known one. The greatest and most profitable franchise of all time , Instant Banana Mousse. See, for 60 years (until the early 90s), it was simply the untouchable behemoth, with massive lock and impenetrable franchise in every area of computing, with everything protected with iron clad patents for having invented pretty much everything that needed to be invented (think memory (core , disk, tape), processor, networking, clustering, virtual machines , databases..everything..), but even that behemoth couldn't survive the industry shift , that it itself created (for eg, it was instrumental in getting Chipzilla and Mickey to where they are now.. oh.. this PC business invented by Fruit is a toy , with a market size of at most 30,000 units and the total profits is less than what we would make from selling one mainframe.. so let us not bother with it, but get an el cheapo chip and an OS from some pipsqueaks and have an offering)..or RISC (oh.. what is the point.. we have such a giant franchise.. why do it at all, HP and Sun and SillyCon Graphics said thanks and ran with it) or databases (why relational, we have such brilliant franchises in network and heirarchical.. Larry Ellison said thanks and ran away with Oracle), same story in networking with Netzilla.
And finally where does the storied hardware and software company find it's franchise after all these years ? The high margin areas in processors ? maybe networking ? software ? hardware ?.. It took a great strat-e-gist, Lou Gerstner , a classic YumBeeYea, with ZERO tech background (he came from RJR Nabisco, a biskoot maker and P&G and Muck 'n See) to point them to a great franchise (the then ISSC was basically their network and hardware servicing division fundamentally back then) and bet the farm on that and Instant Banana survived and thrived.. Compare that with Hickory Pork and Sun (set) and see what happened to them!
The Instant Banana case shows that point clearly... your salvation might not necessarily be in the jazzy 60% gross margin Netzilla world, but in a 'umble 11% gross margin code coolie world!
Welcome to the new world.
Ditto for Takla, Mickey, Sammy, YellJee, Sony, Motor Oil, Chacha products. Each company has their target market. Successful companies make what makes sense to majority of their customers - one cannot satisfy everybody.
Another example of Sammy copying blindly without thinking. GB came up with the same phunwa with optical zoom lens setup many years ago (2006 iirc?) and canned it after 1-2 years becoz it sucks from a portability, usability and reliability perspective and led to it doing R&D which has resulted in all the stuff which goes into PureView (oversampling, low light, OIS, HDR etc. etc.). Now Sammy comes along, copies the years old stuff and is claiming this is 'innovation'. 
. The YumBeeYae strategist of strategists. As an aside, Sun was tightly integrated like a Paki's musharraf too. They made their own chips, their own computers, their own OS, even invented their own language. Something M$ is trying to do and FruitCo is doing. So tight integration is no recipe for success either.