Few strategy texts have aged as well as "Marketing Myopia," the article Theodore Levitt published in Harvard Business Review in 1960. Its central thesis fits in one sentence, but its implications still make leadership committees uncomfortable: no industry dies because the market gets saturated. It dies because the people running it define the business so narrowly that they stop seeing where the customer's real need is actually heading.
The example that made the article famous is the American railroads. The need to move people and cargo actually kept growing — what stopped growing was the railroad business, because it defined itself as "the railroad business" instead of "the transportation business," and so let cars, trucks, and airplanes take its customers without a fight, because it never saw itself competing on that field. Levitt is blunt: others met that need because the railroads, oriented toward the product — the train — instead of the customer — getting from one place to another — stopped meeting it first.
Hollywood came close to making the same mistake with television. For years, the film industry treated TV as a threat to be fought, instead of a natural extension of the entertainment business. Levitt asks the uncomfortable question directly: if Hollywood had seen itself as being in the entertainment business — rather than the movie-making business — would it have gone through the financial crisis it went through? His answer is no. What finally rescued the studios was a new generation of creatives who understood that the vehicle — film or television — mattered less than the need they were meeting.
Levitt contrasts these cases with DuPont and Corning Glass, two companies with a technical and product orientation as strong as any other's, but which — unlike the New England textile mills that were swept away by competition — never stopped asking what new use, in the hands of what customer, their technology could serve. The difference wasn't product quality. It was the discipline of not confusing "what we know how to do" with "the business we're in."
This question — what business are we really in? — isn't a philosophical exercise to run once a year at a leadership retreat. It's often the question that separates a company executing a real strategic priority from one defending, with ever more effort, a product or process the market has already left behind. And it's also almost always the first question worth asking before designing any execution plan: instead of "how do we improve what we already do," ask "what need are we really meeting, and are we sure we're still meeting it better than anyone else."
Based on: Levitt, T., "Marketing Myopia" (Harvard Business Review, 1960, reissued in 1975).