Why Some Big Companies Innovate and Some Don’t?

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Sept. 30 (Bloomberg) –- L2 ThinkTank Founder Scott Galloway discusses innovation vs. disruption and the myth that big companies don’t innovate. He speaks with Deirdre Bolton on Bloomberg Television’s “Money Moves.” (Source: Bloomberg)

Companies and ask if they are innovative.

When you talk about big companies, and i am just thinking of steve balmer from microsoft, this was the big criticism -- more or less people say he got shoved out.

Had he been at ibm people would have said he was a genius and a great execution person but not an innovator.

At the same token we hold up steve jobs and say he was a genius.

How come some seem to be able to innovate?

I would argue steve jobs and steve balmer were innovators, cost of product innovations.

When you raise your prices faster than inflation, which microsoft has done, you make yourself vulnerable to startups who will come in and give you a bad version for free.

Free is an attractive price.

Those disruptors go after the companies.

Microsoft will start nipping at their heels -- they will be nipping at their heels before they note.

Both companies are vulnerable to disruption.

How can you tell if a company or industry is ripe.

If you are a big giant and have a monopoly, you're feeling pretty good, how can you tell that this person or this company is owned that is only going to take a little nibble and it is not going to hurt us at all versus disco scale really quickly and hurt our brand seattle you could develop an immunity index.

You would look at inflation relative to the price increases in our industries.

The cable industry has raised prices faster than inflation.

They have created all this access margin for people like google to come in with chrome cast.

The margins become so juicy that it is too easy for vcs to go in.

Apple took an entire multibillion-dollar product line and made it a button on the iphone.

They protected themselves by disrupting themselves.

As far as what this means when people put money on the line, if you had to give parting words of wisdom, what would you say?

Be honest with yourself.

Our level of innovation and product improvement kept pace with our price increases.

It is because a consumer endorse a price increase does not mean you are not vulnerable.

Do not worship at the altar of high margins.

Are we ripe for somebody to come in and offer 80% of the product for 50% of the price?

This text has been automatically generated. It may not be 100% accurate.

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