Boiled Frog Phenomenon

When a frog is placed directly into a pot of boiling water, the frog will jump out of the water. If a frog is placed into room temperature water and the temperature of the water is increased gradually, the frog will become comfortable and will not jump out of the water. This “boiled frog” phenomenon is often used in strategic management to describe a business that is resistant to change and will eventually lead to their downfall. Why didn’t the frog jump out of the water? The frog did not notice the gradual threat of the increase in temperature. There are many organizations that remain in a comfort zone and do not notice the gradual challenges, risks, and threats in their environment (Polynice, 2008). Most companies suffer from the “boiled frog” phenomenon because of technological advances.

A company that was a victim to the “boiled frog” phenomenon is Sony. In 1975 Sony introduced the Betamax video recorder. One year later, JVC came out with their VHS video format. The technology for both formats was similar, but the tapes could not be played in both types of players. The Betamax was a higher quality machine because it had better resolution, a more reliable playback, and better features that the VHS machine, but it also came with a higher price tag. The VHS player was not as feature oriented, but it could record up to 120 minutes while the Betamax could only record for 60 minutes. RCA created longer playing tapes that could record up to 4 hours of recording. For over ten years each company battled for dominance in the video market, but VHS came out the winner. The major reason that the VHS player came out on top was because of the longer playing tape. Another reason that JVC won the “format war”, was because of the alliances that they had formed with other companies such as RCA, which allowed them to meet consumer demands. Sony’s Betamax design was proprietary and did not allow for alliances with other companies. While the Betamax may have been more technologically superior to the VHS the consumer wanted to be able to record a movie or a sporting event without having to switch out a cassette to continue the recording. Sony eventually realized their mistake and started to make VHS recorders. Sony could have done many things differently such as invest more money and time in research and development to see what the consumer really wanted. A company like Sony should have analyzed why the consumer preferred the VHS version over the Betamax. It would have been beneficial for them to come up with some strategies on how to improve the recording time on the cassette (Bhasin, 2010). A company should always look to how they can make a product better or be prepared to rethink their product when their initial strategy does not work. A good organization is concerned with their customers, consumers, as well as their employees. Management needs to motivate employees to make their company a success. Management should also be willing to listen to suggestions provided by the employees. After all many of the employees are often a customer of the company as well.

Ethical and Legal behavior is becoming more of an issue for organizations especially after high profile businesses such as Enron collapsed because of unethical practices by their accountants. Any company that is more concerned about their profits than ethical behavior is destined to fail. It is important for organizations to remain legal and ethical in their business practices. When Sony realized that they became a “boiled frog” they could have participated in some unethical practices such as stealing proprietary information from JVC. Sony could have hired employees in another country to produce their machines so the machines would be produced cheaper. Sony took the high road and eventually like many other companies caught up with technology.

Sony is a perfect example of how a company did not adapt to the consumer demand. As we now know, both the Betamax and VHS have been replaced by more advanced digital technology (Bhasin, 2010). Business owners need to be aware of the constant changes going on around them so their organization does not suffer a slow death like the frog did when placed in the room temperature water. The owners need to be able to make changes to their strategic management process and be able to react to those changes so that they will become product leaders in the market.

References:

Bhasin, H. (2010, January 17). Sony Betamax Brand Failure. In www.marketing91.com. Retrieved June 13, 2012, from http://www.marketing91.com/sony-betamax-brand-failure/

Polynice, D. (2007, January 29). The “Boiled Frog Phenomenon”. In www.ezinearticles.com. Retrieved June 13, 2012