Charles Darwin said, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” In business, the companies that are most responsive to change are the most likely to survive. Many things can change in a business’s environment: the economy, technologies, laws and regulations, supply chains, competition, customer needs, and more. Good companies react to changes in their environment and adjust their business accordingly. Businesses that don’t evolve, typically don’t survive.
A good example is found in the digital entertainment industry. Consider Blockbuster and Netflix. Blockbuster’s business model was originally based on video rentals, and when the industry transitioned from videos to DVDs, Blockbuster transitioned too and survived. But when the industry changed again, with Redbox offering one dollar DVD rentals from conveniently located machines, and other services offering on-demand streaming, Blockbuster’s business model remained the same and they became obsolete. Netflix, on the other hand, transitioned from a DVD rental company to an on-demand streaming service. And now, seeing that they may be more profitable producing their own content, they are transitioning their business model once again to include Netflix Originals. If Netflix continues to adapt to changes as they come, their willingness to evolve should be rewarded with longevity in the industry.