Meet the Challengers

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It was by challenging orthodoxies that Nicolas Hayek turned around the entire Swiss watch industry in the early 1980s. Hayek’s iconic Swatch brand, based on an inexpensive quartz movement and a colorful plastic case, repositioned the watch as a trendy fashion statement rather than as a timepiece. Three decades later, Swatch Group controls virtually every watch company in Switzerland, generating revenues that now exceed $10 billion annually, and producing well over a billion new watches every year.

Consider how Michael Dell built what is now one of the largest PC and technology corporations in the world. While a student at the University of Texas, Dell started a business in his dorm room, selling IBM PC-compatible computers he assembled from standard components. His big idea came from questioning the prevailing wisdom in the computer industry of his day. He asked himself, “Why does an assembled computer cost five times as much as the parts that went into it? Why do computer manufacturers need indirect retail channels to sell their products? Why can’t they be sold directly to consumers over the phone at a much better price, by cutting out the dealer’s overheads? Why can’t computers be built to order, so that consumers can have the product configured to their own specifications? And why do computer companies manage their own inventory when their suppliers could ...

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