Abstract

Once upon a time there were two sailmakers, one in Rhode Island, the other in California. They both opened for business in the 1800s, and both companies prospered, making canvas sails for ships of all sizes. Even after steamships replaced tall ships, they survived because they were the low cost, high quality producers. In fact, both remained profitable in a much smaller market well into the 20th century. Then nylon was invented. Suddenly, they were both confronted with competitors, upstarts who sold lighter, stronger sails for less. Both sailmakers looked at their own operations and calculated how much it would cost to retool to make nylon sails. The California Company said, ‘‘Retooling would be much too expensive and anyway nylon will never replace all canvas sails. We are still the biggest sailmaker in the country, and we cannot possibly lose all of our customers.’’ However, within a few years of the introduction of nylon sails, that company was out of business. The Rhode Island manufacturer said, ‘‘Retooling would be much too expensive, on the other hand, we can clearly see that all sails will soon be made of nylon. Therefore we will find other stuff to make.’’ Today that company prospers making awnings and canvas bags [1].

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