What do Starbucks, Apple, Google and Amazon Have in Common?
Starbucks, Apple, Google and Amazon can be dubbed the SAGA companies because they are the four companies that truly excite consumers, according to the Washington Post. Although the companies vary widely, each has completely transformed a basic element of contemporary American life. Everyone knows these companies and most people want to be like them. I’d love to have just 1% of their yearly revenue. Then I could retire!
From the article:
The SAGA companies do very different things and are of hugely different sizes: Google‘s market capitalization is about $158 billion; Starbucks is down to about $12 billion. Yet they share some remarkable traits. At the most basic level, each has transformed not only a specific commercial marketplace but also some important aspect of contemporary life — computing and music for Apple, information and advertising for Google, coffee for Starbucks, books for Amazon. In doing so, each has had an appreciable impact on our daily routines, taken on a looming presence in popular culture, and often engendered an intensity of feeling more often associated with tastes in entertainment or political views. Together, they have created a new model of business innovation, culture and values.
But what, really, do the SAGA companies have in common? Here’s a start:
They have a ubiquitous presence. Ubiquity doesn’t necessarily make SAGA companies global market leaders; the worldwide proportion of computer users who own Apples is small and will probably never catch up to the formidable PC. But in many countries, iPod usage is surging, and all the world wants an iPhone. As for the others, Yahoo retains a slight global edge over Google in Web traffic, but that will probably not last much longer, and it is Google whose name is synonymous with finding information on the Web. (We figure that between us, we perform 100 Google searches a day and can easily go for weeks without using another search engine.) Amazon may not dominate e-commerce outside the United States as much as it does inside, but in few of the countries where Amazon operates Web sites is there a competitor that sells more books online. Starbucks manages to be everywhere and also across the street.
They reflect the comparative advantage of today’s America . . . Dial back to the Fortune 500 list of 1958, and there’s no mistaking the difference: a half-century ago, the iconic U.S. companies were about making and moving stuff: General Motors, Ford and Chrysler were all in the top 15. Oil companies and steel manufacturers filled the other top slots, along with General Electric, Eastman Kodak and the company still widely called in those days International Business Machines. Granted, SAGA companies do not rank that high on today’s list, although they are often more profitable than firms that bring in more revenue. Nonetheless, they represent the dramatic shift away from domestic manufacturing and toward an idea-driven, consumer-focused, value-added economy. It is also not coincidental that all four companies are based on the West Coast, reflecting the shift in America’s demographics and centers of innovation.
. . . yet they are genuinely global. Not very long ago, the undisputed symbols of American business abroad were Disney, McDonald’s and Coca-Cola. Those brands remain tremendously powerful, but they have long felt as if they were monoliths imposed on other countries from abroad. (It’s hardly surprising that McDonalds outlets are frequently the targets of anti-globalization protests.) By contrast, SAGA companies blend more easily into their environments by allowing international customers to explore their own tastes and preferences. Amazon could never get away with selling only American books and DVDs; an iPod has no obvious nationality, and despite some carping from European regulators, Google functions fairly seamlessly as an international Internet tool.
They are restless innovators. None of these companies made its business by being the first to add any new physical thing to peoples’ lives: Starbucks did not invent coffee or even the coffee house; with the exception of the Kindle, almost every item available on Amazon is conceived of and produced off the Amazon campus; Apple didn’t invent the computer, the cellphone or the MP3 player; and Google invented neither the search engine nor the paid search model.