[quanticle]

IBM made a similar argument about microcomputers. "Our customers aren't interested in microcomputers. They want mainframes. We'd be better off optimizing our mainframes than investing in microcomputers."

That's the nature of the innovator's dilemma. If you listen to your existing customers, you lose out on the ability to win a nascent, but growing market that ends up being bigger than the market you're in right now.

I wouldn't be surprised if in the next decade or so another pizza chain came along with a better website and ended up with a more dominant marketshare than Pizza Pizza. As more and more people get ubiquitous internet access, the competitive advantage of having a web-based order form will grow.

[comatose_kid]

Does IBM really apply here? They seemed to do alright with the PC.

'web interface' is not the first or second thing I think about when ordering pizza. Here is what I care about:

1) Taste 2) Time to door 3) Price

Everything else has little or no impact. Now if I could say 'Siri, order me my usual' and siri ordered my usual from the closest Pizza Pizza and had it delivered to my determined location? Gold!

[quinndupont]

In the end, the PC market almost killed IBM. Remember, they ditched the PC during their restructuring, and have been doing much better ever since.

I don't think the point is "web interface", it's basic points about access and usability. I agree that the taste of the pizza is paramount, but as companies like Amazon have discovered, even a slow website, or a challenging ecommerce transaction will turn off many potential customers.

[HilbertSpace]

What nearly killed IBM was (1) their devotion to their 'mainframes' and (2) Intel, AMD, Microsoft, Sun, HP, Oracle, Gateway, Dell, Cisco, Juniper, Micron, Seagate, Western Digital, EMC, AOL, etc.

In particular in three years near 1994 they went from just over 400,000 employees down to just over 200,000 and lost $16 billion. Their Research Division went from 4500 full time employees down to 1000 plus about 500 'contract' employees. They thoroughly cleaned out rush hour traffic in NY counties Westchester, Putnam, and Dutchess. There were suicides.

Why? One of their deepest analyses was "God ceased to smile on IBM". The truth was that IBM had their head in the sand, and Andy Grove, Bill Gates, Mike Dell, etc. ate IBM's breakfast, lunch, dinner, and bedtime snack and took their house, car, shoes, suits, ties, and shirts.

In 1984, IBM had everything in computing -- X-ray lithography, microelectronics, circuit design, microcode, computer architecture, virtual machines, mass storage, various operating systems, middleware, programming languages, productivity software, system management software, packet switched networks, marketing, and customer support, in the US and around the world. Nine years later they were nearly bust. One of the biggest extractions of defeat from the jaws of victory in all of business history. Main reason: Head in the sand. Actually, internally from various sources, both internal and external, they were always just awash in accurate and deep analyses of just what was going on. It's just that the top management had their heads in the sand. Dumb.