We look at the market today many sectors have been disrupted by new technology. Is it possible for older companies to compete with new technologies?
It is certainly more challenging today that it ever has been for older "more established" companies mainly because of their often huge cost base which is expensive to maintain and very difficult to reduce without any short term pain.
Just look at Dell today - more fallout from recent results. Companies said it is happy with forward potential but market smacked the shares by 5%. Very hard for the old dinosaurs to change
The problem is that older companies have more or a physical base as opposed to the "virtual" base many new tech companies have to day. The difference in base and running costs is huge!
I think some older companies start at such a huge disadvantage to their younger more nimble competitors that I dont think they can possibly make up the difference. Or am I being unfair?
Maybe an idea to break up these older companies and sell off the growing parts, keeping the steadier performing businesses as cash cows?
Is there an index which shows how the "older" companies have performed against the "newer" companies over the years?
That type of index would be very very useful! I think older companies which have hidden assets might need to break up. If this is the best way to release asset value, what choice do the directors really have?
In my country I have seen where new technology killed not just old companies but a whole sector. When GSM came, it killed the landline sector and many companies when under ground. That is the power of tech.
Good point and a great example. New technology is great in many ways but can crush historic business sectors and lead to huge job losses.
