A firm defined by what it makes defends the product when the market moves; one defined by the purpose the product served can follow it.

The claim

An organisation that defines itself by what it makes is confined to it. When the technology or market shifts, it defends the product rather than the purpose the product served, and newcomers serve that purpose instead. Defining the business by the purpose widens what it can see and makes moves into new forms easier. The cases offered are railroads that saw themselves in the railroad business rather than in transport, and recorded-music firms that kept selling albums while a computer company built digital distribution. From our own knowledge, not from the corpus: the railroad case is an old business-school example (Levitt, Marketing Myopia, 1960) and its history is contested; regulation and trucking did more to the railroads than the airplane, so the case illustrates and does not test.