Peters' law refers to the efforts made to complete the last 1% of the product, which may lead to the loss of the market. This law was proposed by the American management scientist T. Peters.
The enlightenment of Peters' Law to managers is: Be careful not to be meticulous, and do not be greedy for perfection. As a classic ad slogan says: there is no best, only better. Haier President Zhang Ruimin also said: "This is an era where fast fish eats slow fish." We must coordinate product competition and market competition, quality competition and speed competition.
Companies must be time-conscious when focusing on perfect quality. From the perspective of market economy, time is more urgent and effective for capital and production efficiency. Therefore, the "preemptive strategy" must be introduced. "Preemptive strategy" is an important prerequisite for winning the final victory in market competition. Practice has repeatedly proved that if other factors are the same or basically the same, whoever seizes the business opportunity will win the final victory. The speed of preemption has become the key factor for winning the competition, so we cannot lose the market because of the 1% of the product. Of 100%. The implementation of the "preemptive strategy" means "first" and "grab" because "business opportunities" are short-lived, limited, and sometimes fleeting.
Most excellent companies regard "there is no best, only better" as their business creed. Constantly pursuing progress and perfection can become the driving force of the enterprise. However, there is an old Chinese saying that when the water is full, you will nourish, and if the month is full, you will lose. When a thing is extremely good, it often becomes the beginning of bad.
The same is true for products. No product can be considered perfect. Even the best designer may have defects in some aspects of the products he designs. For its Windows operating system, Microsoft maintains a team of developers composed of more than a thousand people, all of whom are excellent software engineers. Even so, you will often see that when a new Microsoft product is launched, it does not take long for you to find an upgrade package or patch for that product. Doesn't this mean that Microsoft's products have vulnerabilities? Why does Microsoft want to market products with vulnerabilities? Didn't Microsoft realize that many computer viruses attack computers through the vulnerabilities of these Microsoft products? It should be believed that Microsoft operators must know that bringing products that still have certain defects to the market is likely to have a negative impact. However, if Microsoft insists on pursuing product perfection and waits until all product vulnerabilities are corrected before launching this perfect product to the market, then I don’t know how long the next new operating system will appear. , And it is estimated that at that time, the operating system market, eight or nine out of ten, has already "changed the banner of the king."
If we break down consumer needs, we can divide them into basic needs and extended needs. When consumers buy a product, they first consider their basic needs, that is, whether the product can meet some of their most basic needs, just as buying a toothbrush is mainly for brushing their teeth. After the basic needs are met, consumers will consider their expanded needs, such as product quality, appearance, performance, and so on. Every product must first be able to meet the basic needs of certain consumers, and the continuous improvement of products or services by merchants is mostly focused on the extended needs of consumers such as quality, appearance, and performance.
It is true that while satisfying the basic needs of consumers, it is a good thing on the surface to provide consumers with more extended needs. However, excessive pursuit of product perfection may cause adverse effects in two aspects. The first is the cost of the product. To pursue product perfection, companies need to invest a lot in research and development, and this will greatly increase the cost of the product, and the price of the product will also increase. Once the price of a product exceeds the range that consumers can bear, even the perfect product will not be accepted by consumers. The second is the time the product is put on the market. The timing of entering the market is very important, and sometimes market opportunities are fleeting. Blindly pursuing perfection and refusing to enter the market may prevent you from seizing the market opportunities in front of you.
The principles of economics tell us that when determining their production volume, companies should ensure that their marginal revenue equals their marginal cost. In fact, the same is true during product development. Perhaps for the last 1%, we need to pay a very high cost, but it is difficult to obtain additional benefits. If that is the case, what is the point of this approach?
Case 1: The management application of Peters' Law: Apple: The failure of cutting-edge products
Apple is a world-renowned computer manufacturer. At the beginning of its founding, Apple was just a very humble small company. Through its unremitting efforts in the capital accumulation stage, in just five short years, Apple has squeezed into the top 500 companies in the United States.
In the past, computers could only be used in large factories or projects. For most ordinary people, the computer only hears its name and sees nothing. It was Apple who first proposed the concept of personal home computers (PCs), allowing computers to enter the homes of ordinary people. Due to Apple's effective operating strategy, Apple dominated the personal home computer market at that time. For a time, the popular Apple company began to become the new favorite of the market and the object of public opinion touted.
At this time, Apple’s operators began to revel in the joy of success. Pride began to grow in their thoughts, it seems that Apple at that time already had proud capital. They did not realize that a war filled with gunpowder was imminent.
The great success of Apple has made more and more people realize the huge potential of the personal home computer market. Numerous investors and scientific researchers have entered this field one after another. In a place called "Silicon Valley" in California, USA, more than 100 computer and high-tech product companies have quickly become stubborn. The desire for wealth and success has led to mutual research and killing among these companies. At this time, they all have a common goal, that is, Apple is the leader in the industry.
But at this time, Apple did not realize the potential threats around it. Apple’s pride has cost it a heavy price. In the following operations, Apple has tasted the taste of failure. The reason is that Apple’s managers have ignored the characteristics of the computer market, which is fast. In the personal computer industry, time is a decisive factor in competition. If leading products can be produced in a short period of time and put on the market, it will be easier to achieve market success. This also requires companies not to invest in product improvements. Stopped time, and this error happened to Apple.
As a large number of companies such as IBM enter the personal computer market, Apple's situation is getting worse. In order to reverse the unfavorable situation in the market, Apple made a bold decision, that is, to launch a supercomputer that exceeds the performance of all competitors' products. Apple hopes that by launching this new product, it can always be at the forefront of the competition to reverse the current unfavorable situation.
In order to do a good job in the development of this supercomputer called the "Apple Type III", the general manager of Apple personally went into battle and was fully responsible. However, as an engineer, he lacks the necessary business marketing knowledge. He believes that since a computer is a high-tech product, the natural market will compete around technological leadership. Therefore, whoever can launch a more advanced computer can seize the market. Therefore, he put forward extremely high requirements for this new supercomputer in terms of its performance and many other aspects. A series of indicators are required to be high, precise, and sharp, so that Apple's scientific researchers have begun to complain. After one and a half years of development, three-fifths of the technical problems of the entire "Apple III" computer are still in a blank state. The expected launch time of new products has to be delayed again and again.
Although Apple’s management has repeatedly announced that it is precisely because of customer needs that Apple has repeatedly delayed the launch of the Apple Type III. Since the apples are all fine products, they must not be rashly made. However, the patience of the market and consumers is limited. In order to show that Apple attaches great importance to the time commitment, Apple still launched its "Apple Type III" computer to the market without achieving the expected design goals.
As the product was promoted to the expected high level as the point of hype, the actual product was difficult to reach the originally expected level, so soon after the new product was launched, the serious discrepancy between the advertisement and the product caused constant complaints from customers, and the media also took the opportunity Big fuss. At this time, Apple also began to fall into a low period.
From a pioneer in home computers to a second-rate company with a lack of credibility, Apple’s lesson cannot be said to have been severe. In fact, the biggest mistake Apple has made is not to hear the needs of customers, but to demand product perfection and absolute technological leadership instead. Business opportunities are changing rapidly, and companies do not need to produce perfect artworks, but products that meet people's needs. Satisfying customers in a timely manner and quickly occupying the market is the magic weapon for enterprises to defeat the enemy.
Case 2: Classic Case Analysis of Peters' Law
A small and medium-sized IT company, the boss is a perfectionist, and there is a flaw in software or technology that must be reworked. The company once launched a game software that is more advantageous and attractive than the first brand on the market. But the boss thinks this game is too simple, users only need to play 20 times to pass the level, and the complexity must be increased. As a result, the design was restarted, and it was finally delayed for more than 5 months, allowing rival products to seize the opportunity and become the country's first brand.
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