Adapt (quickly) or die
In almost all industries there is at some stage a new technology or trend that blows through long-established business models like a hurricane, leaving managers little time to adapt. In some cases, such as that of the Atkins diet, the storm can blow itself out as unpredictably as it arrived.
In other cases, however, the pain can be prolonged and relentless. For instance, the photographic film industry is still in the process of adjusting to the now ubiquitous digital camera. Early this year, Japan’s Fuji Photo Film said it would cut 5,000 jobs, while Eastman Kodak has forecast losses of up to Dollars 1.1bn (Pounds 631m) in 2006 because of restructuring.
In the case of VoIP, which allows users to make telephone calls over the internet, old-style fixed-line connections are unlikely to disappear anytime soon, because of the need to maintain service for those without internet access, such as elderly or poor customers. "We have a large number of customers who will never enter the internet world," says Didier Lombard, chief executive of France Telecom.
However, he does now expect that by the end of 2006, as much as 40 per cent of France Telecom’s fixed-line voice traffic will be VoIP. Last June, the French group was only expecting this figure to be about 25 per cent.
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